1. What is the US Savings Bonds Calculator?

The US Savings Bonds Calculator estimates the current value of savings bonds purchased through Treasury Direct. It calculates the compounded value based on the purchase amount, annual interest rate, and holding period using semi-annual compounding.

2. How Does the Calculator Work?

The calculator uses the savings bonds formula:

Where:

• \( V \) — Current value (USD)
• \( P \) — Purchase amount (USD)
• \( rate \) — Annual interest rate (decimal)
• \( y \) — Years held (years)

Explanation: The formula uses semi-annual compounding, meaning interest is calculated twice per year and added to the principal, resulting in compound growth.

3. Importance of Savings Bonds Calculation

Details: Accurate calculation helps investors understand the growth of their savings bonds, plan for future financial goals, and make informed decisions about bond redemption timing.

4. Using the Calculator

Tips: Enter purchase amount in USD, annual interest rate as a decimal (e.g., 0.05 for 5%), and years held. All values must be valid (purchase amount > 0, rate ≥ 0, years ≥ 0).

5. Frequently Asked Questions (FAQ)

Q1: What types of savings bonds does this calculator work for?
A: This calculator works for Series EE and Series I savings bonds that use semi-annual compounding through Treasury Direct.

Q2: How often is interest compounded on US savings bonds?
A: Interest on US savings bonds compounds semi-annually (twice per year), which is reflected in the formula.

Q3: What is the minimum holding period for savings bonds?
A: Savings bonds must be held for at least 1 year before redemption, and redeeming within 5 years results in a 3-month interest penalty.

Q4: Are savings bonds taxable?
A: Interest earned on savings bonds is subject to federal income tax but exempt from state and local taxes.

Q5: Where can I check current savings bond rates?
A: Current rates for Series EE and Series I bonds are published on the Treasury Direct website (treasurydirect.gov).