I Bond Worth Calculator

I Bond Value Formula:

\[ V = P \times \left(1 + \frac{\text{fixed} + 2 \times \text{inflation} + \text{fixed} \times \text{inflation}}{2}\right)^{2 \times y} \]

Purchase Amount (P):

USD

Fixed Annual Rate (fixed):

decimal

Semiannual Inflation Rate (inflation):

decimal

Years Held (y):

years

Current Value (V):

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1. What is the I Bond Worth Calculator?

The I Bond Worth Calculator estimates the current value of Series I Savings Bonds based on the purchase amount, fixed rate, semiannual inflation rate, and holding period. I Bonds are U.S. government savings bonds that earn interest based on both a fixed rate and an inflation rate.

2. How Does the Calculator Work?

The calculator uses the I Bond value formula:

\[ V = P \times \left(1 + \frac{\text{fixed} + 2 \times \text{inflation} + \text{fixed} \times \text{inflation}}{2}\right)^{2 \times y} \]

Where:

$ V $ — Current value of the I Bond (USD)
$ P $ — Purchase amount (USD)
$ \text{fixed} $ — Fixed annual rate (decimal)
$ \text{inflation} $ — Semiannual inflation rate (decimal)
$ y $ — Years held (years)

Explanation: The formula accounts for the combined effect of the fixed rate and inflation rate, compounded semiannually over the holding period.

3. Importance of I Bond Valuation

Details: Accurate I Bond valuation helps investors understand the real return on their investment, track bond performance, and make informed decisions about holding or redeeming bonds.

4. Using the Calculator

Tips: Enter the purchase amount in USD, fixed rate and inflation rate as decimals (e.g., 0.05 for 5%), and years held. All values must be valid (positive numbers).

5. Frequently Asked Questions (FAQ)

Q1: What are I Bonds?
A: I Bonds are U.S. government savings bonds that protect against inflation. They earn a combination of a fixed rate and an inflation rate that adjusts every six months.

Q2: How often do I Bond rates change?
A: The fixed rate remains the same for the life of the bond, while the inflation rate adjusts every six months (May and November).

Q3: What is the minimum holding period for I Bonds?
A: I Bonds must be held for at least one year. If redeemed within the first five years, you lose the last three months of interest.

Q4: Are there purchase limits for I Bonds?
A: Yes, the annual purchase limit is $10,000 per person per calendar year for electronic bonds, plus up to $5,000 in paper bonds via tax refund.

Q5: How are I Bond earnings taxed?
A: I Bond interest is exempt from state and local taxes, but subject to federal income tax. Tax can be deferred until redemption or maturity.