1. What is the US Savings Bond Calculator?

The Treasury Direct US Savings Bond Calculator calculates the current value of US savings bonds using the semi-annual compounding formula. It helps investors determine the worth of their bonds based on purchase amount, interest rate, and holding period.

2. How Does the Calculator Work?

The calculator uses the savings bond formula:

Where:

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

Explanation: The formula accounts for semi-annual compounding, where interest is applied twice per year, making it more accurate than simple annual compounding for US savings bonds.

3. Importance of Savings Bond Calculation

Details: Accurate bond valuation is essential for financial planning, investment tracking, and understanding the growth of government-backed savings instruments over time.

4. Using the Calculator

Tips: Enter purchase amount in USD, annual interest rate as a decimal (e.g., 0.05 for 5%), and years held. All values must be valid (purchase amount > 0, interest rate ≥ 0, years ≥ 0).

5. Frequently Asked Questions (FAQ)

Q1: What types of US savings bonds use this formula?
A: This formula applies to Series EE and Series I savings bonds, which compound interest semi-annually.

Q2: How often does interest compound on US savings bonds?
A: Interest compounds semi-annually (every 6 months), which is why the formula divides the annual rate by 2.

Q3: What is the minimum investment for US savings bonds?
A: The minimum purchase amount for electronic savings bonds is $25 through TreasuryDirect.gov.

Q4: Are there tax advantages to US savings bonds?
A: Yes, interest earned is exempt from state and local taxes, and federal taxes can be deferred until redemption.

Q5: How long do US savings bonds earn interest?
A: Series EE bonds earn interest for 30 years, while Series I bonds earn interest for 30 years from the issue date.