Savings Bond Calculator I Bonds

I Bonds Value Formula:

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

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 Bonds Value Formula?

The I Bonds value formula calculates the current value of Series I savings bonds based on the purchase amount, fixed annual rate, semiannual inflation rate, and years held. 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 Bonds value formula:

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

Where:

$ V $ — Current value (USD)
$ P $ — Purchase amount (USD)
$ fixed $ — Fixed annual rate (decimal)
$ inflation $ — Semiannual inflation rate (decimal)
$ y $ — Years held (years)

Explanation: The formula compounds interest semiannually, combining both the fixed rate and inflation-adjusted components to determine the bond's current value.

3. Importance of I Bonds Calculation

Details: Accurate I Bonds valuation helps investors track their investment growth, understand inflation protection benefits, and make informed decisions about bond redemption timing.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

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

Q2: How often are inflation rates updated?
A: Inflation rates for I Bonds are updated every six months (May and November) based on the Consumer Price Index.

Q3: What are the current I Bonds rates?
A: Current rates are published by the Treasury Department. Check TreasuryDirect.gov for the most up-to-date rates.

Q4: Are there penalties for early redemption?
A: I Bonds must be held for at least one year. If redeemed within the first five years, you forfeit the last three months of interest.

Q5: What is the maximum purchase amount?
A: The annual purchase limit for I Bonds is $15,000 per person ($10,000 electronic + $5,000 paper via tax refund).