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US EE Savings Bond Formula:
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The US EE Savings Bond formula calculates the current value of Series EE savings bonds based on the purchase amount, annual interest rate, and years held. EE bonds are low-risk government savings bonds that earn interest for up to 30 years.
The calculator uses the US EE Savings Bond formula:
Where:
Explanation: The formula compounds interest semi-annually, which is why the rate is divided by 2 and the exponent is multiplied by 2. This reflects the actual compounding method used for EE savings bonds.
Details: Calculating the current value of EE savings bonds helps investors track their investment growth, plan for future financial needs, and make informed decisions about holding or redeeming bonds.
Tips: Enter the original purchase amount in USD, the annual interest rate as a decimal (e.g., 0.025 for 2.5%), and the number of years the bond has been held. All values must be positive numbers.
Q1: What are the current interest rates for EE savings bonds?
A: Interest rates for EE bonds are set by the Treasury Department and may change every six months. Check TreasuryDirect.gov for current rates.
Q2: How long do EE bonds earn interest?
A: EE bonds earn interest for 30 years. Bonds issued after May 2005 earn a fixed rate, while older bonds may have variable rates.
Q3: When can I cash in my EE savings bonds?
A: You must hold EE bonds for at least one year. If cashed within the first 5 years, you'll lose the last 3 months of interest.
Q4: Are EE savings bonds taxable?
A: Interest earned is subject to federal income tax but exempt from state and local taxes. Tax can be deferred until redemption or maturity.
Q5: What is the minimum and maximum investment?
A: Electronic EE bonds have a $25 minimum purchase, with a $10,000 annual limit per Social Security number.