Us Treasury Direct I Bonds Calculator

I Bonds Value Formula:

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

Purchase Amount (P):

USD

Fixed Annual Rate (fixed):

decimal

Semiannual Inflation Rate (inflation):

decimal

Years Held (y):

years

Current Value (V):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is the US Treasury Direct I Bonds Calculator?

The US Treasury Direct I Bonds Calculator calculates the current value of Series I savings bonds using the official formula from the US Treasury Department. I Bonds are inflation-protected savings bonds that earn interest based on both a fixed rate and an inflation rate.

2. How Does the Calculator Work?

The calculator uses the I Bonds value formula:

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

Where:

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

Explanation: The formula combines both the fixed rate and inflation rate components, with compounding occurring semiannually (twice per year).

3. Importance of I Bonds Calculation

Details: Accurate I Bonds valuation helps investors understand the real return on their inflation-protected investments and make informed decisions about holding or redeeming bonds.

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 positive.

5. Frequently Asked Questions (FAQ)

Q1: What are I Bonds?
A: I Bonds are US government savings bonds that protect against inflation. They earn a composite rate based on a fixed rate plus an inflation rate.

Q2: How often do inflation rates change?
A: Inflation rates for I Bonds are adjusted every six months (May and November) based on the Consumer Price Index.

Q3: What is the minimum holding period for I Bonds?
A: I Bonds must be held for at least one year. If redeemed within 5 years, you lose the last 3 months of interest.

Q4: Are there purchase limits for 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.

Q5: How are I Bonds taxed?
A: I Bonds are exempt from state and local taxes, but federal income tax applies. You can defer federal taxes until redemption or maturity.