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TreasuryDirect Savings Bond Formula:
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The TreasuryDirect Savings Bond Calculator determines the current value of savings bonds using the compound interest formula with semi-annual compounding. It calculates how much a bond purchased at a specific amount is worth after a certain number of years at a given interest rate.
The calculator uses the TreasuryDirect savings bond formula:
Where:
Explanation: The formula accounts for semi-annual compounding, where interest is calculated twice per year and added to the principal, resulting in exponential growth over time.
Details: Accurate bond valuation helps investors track investment growth, plan financial goals, and make informed decisions about holding or redeeming bonds. It's essential for retirement planning and educational savings.
Tips: Enter the original purchase amount in USD, annual interest rate as a decimal (e.g., 0.05 for 5%), and the number of years the bond has been held. All values must be positive numbers.
Q1: What types of savings bonds does this calculator work for?
A: This calculator works for Series EE and Series I savings bonds that use semi-annual compounding interest.
Q2: How often is interest compounded on savings bonds?
A: Interest on Treasury savings bonds is compounded semi-annually, meaning twice per year.
Q3: What is the minimum investment for savings bonds?
A: The minimum purchase amount for electronic savings bonds is $25, with additional purchases in penny increments.
Q4: Are savings bonds taxable?
A: Interest earned on savings bonds is subject to federal income tax but exempt from state and local taxes.
Q5: How long do 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.