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Savings Bond Formula:
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The U.S. Treasury's Savings Bond Calculator estimates the current value of savings bonds based on the purchase amount, annual interest rate, and years held. It uses the standard compound interest formula with semi-annual compounding as used by the U.S. Treasury.
The calculator uses the savings bond formula:
Where:
Explanation: The formula calculates compound interest with semi-annual compounding (interest applied twice per year), which is standard for U.S. savings bonds.
Details: Accurate savings bond valuation helps investors track their investment growth, plan for future financial goals, and make informed decisions about bond redemption or continued holding.
Tips: Enter the original purchase amount in USD, the annual interest rate as a decimal (e.g., 0.05 for 5%), and the number of years the bond has been held. All values must be positive.
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, which is the standard for U.S. Treasury savings bonds.
Q2: How often is interest compounded on savings bonds?
A: U.S. savings bonds typically compound interest semi-annually (every 6 months), which is reflected in the formula's exponent of 2×y.
Q3: What is the minimum investment for savings bonds?
A: The minimum purchase amount for electronic savings bonds is $25, while paper bonds have a minimum of $50.
Q4: Are there penalties for early redemption?
A: Savings bonds must be held for at least 1 year, and if redeemed within 5 years, you forfeit the last 3 months of interest.
Q5: How do I find the current interest rate for savings bonds?
A: Current rates are published on the TreasuryDirect website and are typically updated every six months in May and November.