US Savings Bond Calculator For I Bonds

US Series I Savings Bond Formula:

\[ V = P \times \left(1 + \frac{\text{fixed} + 2 \times \text{inflation} + \text{fixed} \times \text{inflation}}{2}\right)^{2 \times y} \]

Purchase Amount (P):

USD

Fixed Annual Rate:

decimal

Semiannual Inflation Rate:

decimal

Years Held (y):

years

Current Value (V):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What Are US Series I Savings Bonds?

US Series I Savings Bonds are inflation-protected savings bonds issued by the U.S. Treasury. They offer a combination of a fixed interest rate and an inflation-adjusted rate, providing protection against inflation while guaranteeing a minimum return.

2. How Does the Calculator Work?

The calculator uses the US Series I Savings Bond formula:

\[ V = P \times \left(1 + \frac{\text{fixed} + 2 \times \text{inflation} + \text{fixed} \times \text{inflation}}{2}\right)^{2 \times y} \]

Where:

$ V $ — Current value of the bond (USD)
$ P $ — Purchase amount (USD)
$ \text{fixed} $ — Fixed annual interest rate (decimal)
$ \text{inflation} $ — Semiannual inflation rate (decimal)
$ y $ — Number of years held

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 Valuation

Details: Accurate valuation helps investors understand the real return on their investment, accounting for both the guaranteed fixed return and inflation protection components.

4. Using the Calculator

Tips: Enter the purchase amount in USD, fixed annual rate as a decimal (e.g., 0.025 for 2.5%), semiannual inflation rate as a decimal, and years held. All values must be non-negative.

5. Frequently Asked Questions (FAQ)

Q1: What is the minimum investment for I Bonds?
A: The minimum purchase amount is $25 for electronic bonds and $50 for paper bonds.

Q2: How often are inflation rates adjusted?
A: Inflation rates are adjusted every six months, in May and November, based on the Consumer Price Index.

Q3: What are the holding period requirements?
A: I Bonds must be held for at least one year, and if redeemed within five years, you forfeit the last three months of interest.

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

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