1. What is the IRS Series EE Bond Calculator?

The IRS Series EE Bond Calculator calculates the current value of Series EE savings bonds based on purchase amount, annual interest rate, and years held. Series EE bonds are U.S. government savings bonds that earn interest for up to 30 years.

2. How Does the Calculator Work?

The calculator uses the Series EE bond formula:

Where:

• \( V \) — Current value of the bond (USD)
• \( P \) — Purchase amount (USD)
• \( rate \) — Annual interest rate (decimal)
• \( y \) — Years held (years)

Explanation: The formula accounts for semi-annual compounding of interest, where the annual rate is divided by 2 and compounded twice per year over the holding period.

3. Importance of Series EE Bond Calculation

Details: Accurate bond valuation helps investors track their savings growth, plan for future expenses, and make informed decisions about bond redemption or continued holding.

4. Using the Calculator

Tips: Enter purchase amount in USD, annual interest rate as a decimal (e.g., 0.025 for 2.5%), and years held. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What are Series EE bonds?
A: Series EE bonds are U.S. government savings bonds that earn a fixed rate of interest for up to 30 years. They are guaranteed to double in value after 20 years.

Q2: How is interest compounded on EE bonds?
A: Interest is compounded semiannually, meaning it's calculated and added to the bond's value twice per year.

Q3: What is the minimum holding period for EE bonds?
A: EE bonds must be held for at least one year. If redeemed within the first 5 years, you forfeit the last 3 months of interest.

Q4: Are EE bonds taxable?
A: Interest earned on EE bonds is subject to federal income tax but exempt from state and local taxes. Tax can be deferred until redemption or maturity.

Q5: Where can I find the current interest rate for EE bonds?
A: Current rates are published by the Treasury Department and can be found on TreasuryDirect.gov. Rates are set each May and November.