1. What is the US Treasury Direct EE Bond Calculator?

The US Treasury Direct EE Bond Calculator calculates the current value of EE savings bonds based on purchase amount, annual interest rate, and years held. EE bonds are low-risk savings bonds issued by the US Treasury that earn interest for up to 30 years.

2. How Does the Calculator Work?

The calculator uses the EE bond compound interest formula:

Where:

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

Explanation: The formula accounts for semi-annual compounding, where interest is calculated twice per year and added to the principal.

3. Importance of EE Bond Calculation

Details: Accurate EE bond valuation helps investors track their savings growth, plan for future expenses, and make informed decisions about holding or redeeming bonds.

4. Using the Calculator

Tips: Enter purchase amount in USD, annual interest rate as a decimal (e.g., 0.025 for 2.5%), and years held. All values must be valid (purchase amount > 0, rate ≥ 0, years ≥ 0).

5. Frequently Asked Questions (FAQ)

Q1: What are EE bonds?
A: EE bonds are US government savings bonds that earn interest for up to 30 years. They are guaranteed to double in value in 20 years.

Q2: How often does interest compound on EE bonds?
A: Interest compounds semiannually (twice per year), which is reflected in the formula's exponent of 2*y.

Q3: What is the minimum purchase amount for EE bonds?
A: The minimum purchase amount is $25 when buying electronically through TreasuryDirect.

Q4: Can EE bonds lose value?
A: No, EE bonds cannot lose value. They are guaranteed to reach face value at 20 years and continue earning interest for 30 years.

Q5: When is interest taxed on EE bonds?
A: Interest is subject to federal income tax but exempt from state and local taxes. Tax can be deferred until redemption or maturity.