US Savings Bond Series I Value Calculator

Series I Bond Value 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):

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1. What is the US Series I Savings Bond?

US Series I Savings Bonds are inflation-protected government bonds that earn interest based on both a fixed rate and an inflation rate. They are designed to protect investors from inflation while providing a guaranteed return.

2. How Does the Calculator Work?

The calculator uses the Series I Bond value 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 (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 product, divided by 2, then compounds this rate semiannually over the holding period.

3. Importance of Series I Bond Calculation

Details: Accurate calculation helps investors understand the real return on their investment, accounting for both guaranteed returns and inflation protection, which is crucial for long-term financial planning.

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 numbers.

5. Frequently Asked Questions (FAQ)

Q1: What are the current Series I Bond rates?
A: Rates are announced every May and November. Check TreasuryDirect.gov for current fixed and inflation rates.

Q2: What is the minimum holding period for Series I Bonds?
A: Minimum holding period is 1 year. If redeemed before 5 years, you lose the last 3 months of interest.

Q3: Are there purchase limits for Series 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.

Q4: How is the inflation rate determined?
A: The inflation rate is based on the Consumer Price Index for All Urban Consumers (CPI-U) and is adjusted semiannually.

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