EE Savings Bond Calculator
Understanding EE Savings Bonds
Series EE savings bonds are a low‑risk, government‑backed investment offered by the U.S. Treasury. They are purchased at face value and earn a fixed interest rate that is compounded semi‑annually. The Treasury guarantees that each bond will at least double in value after 20 years, even if the stated rate would produce a lower amount.
How the Calculator Works
The calculator requires four inputs:
- Purchase Amount ($): The amount you pay for the bond.
- Issue Date: The date the bond was originally purchased.
- Redemption Date: The date you plan to cash the bond.
- Annual Yield (%): The current fixed annual rate for EE bonds (expressed as a percent).
Using these values, the calculator performs the following steps:
- Convert the annual yield to a decimal (e.g., 0.10% becomes 0.001).
- Determine the total number of years between the issue and redemption dates.
- Because interest compounds twice a year, calculate the number of compounding periods as
years × 2. - Apply the semi‑annual compounding formula:
Future Value = Purchase Amount × (1 + (annualYield/2))^(periods) - If the bond is held for 20 years or more, ensure the result is at least double the purchase amount, per the Treasury guarantee.
When to Use This Calculator
Investors use this tool to estimate the growth of their EE bonds under different scenarios, such as:
- Planning for retirement or education expenses.
- Comparing the guaranteed return of EE bonds with other low‑risk investments.
- Determining the optimal redemption date to maximize earnings while meeting financial goals.
Important Considerations
- The Treasury may change the annual yield for newly issued bonds, but existing bonds keep the rate they were issued with.
- Early redemption (before 5 years) may result in a penalty of the last three months' interest.
- All calculations assume the bond is held for the full period without any penalties.
Use the calculator above to see how your EE savings bonds will grow over time and make informed decisions about your financial future.