1. What Is The Treasurydirect.gov I Bond Calculator?

The Treasurydirect.gov I Bond Calculator 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 Bond value 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 accounts for the combined effect of the fixed rate and inflation rate, compounded semiannually over the holding period.

3. Importance Of I Bond Calculation

Details: Accurate I Bond valuation helps investors understand the growth of their savings bonds, plan for future financial needs, and compare I Bonds with other investment options.

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 valid (positive numbers).

5. Frequently Asked Questions (FAQ)

Q1: What are I Bonds?
A: I Bonds are U.S. government savings bonds that protect against inflation. They earn a combination of a fixed rate and an inflation rate.

Q2: How often are rates updated?
A: The fixed rate remains constant for the life of the bond, while the inflation rate is adjusted every six months based on CPI-U.

Q3: What is the minimum investment?
A: The minimum purchase amount for electronic I Bonds is $25, with additional purchases in penny increments.

Q4: Are there holding period restrictions?
A: I Bonds must be held for at least one year. If redeemed within 5 years, you forfeit the last 3 months of interest.

Q5: Are I Bonds taxable?
A: I Bond interest is subject to federal income tax but exempt from state and local income taxes.