1. What Are Series I Savings Bonds?

Series I Savings Bonds are U.S. government savings bonds that earn interest based on a combination of a fixed rate and an inflation rate. They are designed to protect investors from inflation while providing a guaranteed return.

2. How Does The Calculator Work?

The calculator uses the Series I Bond formula:

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 combines fixed and inflation components with semiannual compounding to calculate the bond's current value.

3. Importance Of Series I Bond Calculation

Details: Accurate Series I Bond valuation helps investors understand their investment growth, plan for future expenses, and make informed decisions about bond redemption timing.

4. Using The Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What are the current Series I Bond rates?
A: Rates change every six months. Check TreasuryDirect.gov for current fixed and inflation rates.

Q2: How long must I hold Series I Bonds?
A: Minimum 1 year, with 3-month interest penalty if redeemed before 5 years. Maximum 30 years.

Q3: Are Series I Bonds taxable?
A: Federal tax applies, but state and local taxes are exempt. Tax can be deferred until redemption.

Q4: What is the purchase limit for Series I Bonds?
A: $10,000 per person per year electronically, plus $5,000 in paper bonds via tax refund.

Q5: Can I use partial years in the calculation?
A: Yes, the calculator accepts decimal years for precise calculations of partial holding periods.