1. What is the United States I Bond Calculator?

The United States I Bond Calculator estimates the current value of Series I savings bonds based on purchase amount, fixed rate, semiannual inflation rate, and years held. I Bonds are inflation-protected savings bonds issued by the U.S. Treasury.

2. How Does the Calculator Work?

The calculator uses the I Bond value formula:

Where:

• \( V \) — Current value (USD)
• \( P \) — Purchase amount (USD)
• \( \text{fixed} \) — Fixed annual rate (decimal)
• \( \text{inflation} \) — Semiannual inflation rate (decimal)
• \( y \) — Years held (years)

Explanation: The formula combines the fixed rate with twice the semiannual inflation rate plus their interaction term, compounded semiannually over the holding period.

3. Importance of I Bond Calculation

Details: Accurate I Bond valuation helps investors track their inflation-protected savings, plan for future expenses, and compare returns 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 positive.

5. Frequently Asked Questions (FAQ)

Q1: What are I Bonds?
A: I Bonds are U.S. savings bonds that earn interest based on both a fixed rate and an inflation rate that adjusts semiannually.

Q2: How often do inflation rates change?
A: Inflation rates for I Bonds are adjusted every six months (May and November) based on the Consumer Price Index.

Q3: What is the minimum holding period for I Bonds?
A: I Bonds must be held for at least one year, and there's a penalty of three months' interest if redeemed before five years.

Q4: Are there purchase limits for I Bonds?
A: Yes, the annual purchase limit is $10,000 per Social Security number for electronic bonds, plus $5,000 in paper bonds via tax refund.

Q5: How are I Bonds taxed?
A: I Bond interest is exempt from state and local taxes but subject to federal income tax. Tax can be deferred until redemption.