1. What is the Savings Bonds Calculator?

The Savings Bonds Calculator calculates the current value of savings bonds purchased through TreasuryDirect. It uses compound interest with semi-annual compounding to determine the bond's worth after a specified holding period.

2. How Does the Calculator Work?

The calculator uses the savings bonds formula:

Where:

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

Explanation: The formula calculates compound interest with semi-annual compounding, where interest is applied twice per year and accumulates over the holding period.

3. Importance of Savings Bonds Calculation

Details: Accurate savings bonds valuation helps investors track investment growth, plan financial goals, 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., 0.05 for 5%), and years held. All values must be valid (purchase amount > 0, rate ≥ 0, years ≥ 0).

5. Frequently Asked Questions (FAQ)

Q1: What types of savings bonds does this calculator work for?
A: This calculator works for Series EE and Series I savings bonds purchased through TreasuryDirect with semi-annual compounding.

Q2: How often is interest compounded on savings bonds?
A: Interest on TreasuryDirect savings bonds compounds semi-annually (twice per year).

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

Q4: Are there penalties for early redemption?
A: Savings bonds must be held for at least one year. If redeemed within 5 years, you forfeit the last 3 months of interest.

Q5: How does this differ from regular compound interest?
A: This uses semi-annual compounding specific to Treasury bonds, whereas regular compound interest might use annual, monthly, or daily compounding.