US Savings Bond Calculator
Bond Valuation Summary
Understanding US Savings Bonds: Series I vs. Series EE
Calculating the value of US Savings Bonds can be complex due to how interest is accrued, compounded, and the specific rules regarding early redemption. This calculator helps you estimate the current worth of your investment based on Treasury Department logic.
Series I Savings Bonds
Series I bonds are designed to protect your purchasing power. Their earnings are based on two components:
- Fixed Rate: A permanent rate set when you buy the bond.
- Inflation Rate: A variable rate that changes every six months based on the Consumer Price Index (CPI-U).
The "Composite Rate" is calculated using the formula: [Fixed Rate + (2 x Semiannual Inflation Rate) + (Fixed Rate x Semiannual Inflation Rate)].
Series EE Savings Bonds
Series EE bonds issued since May 2005 earn a fixed rate of interest. A unique feature of EE bonds is the 20-year guarantee: if the bond has not doubled in value via regular interest after 20 years, the Treasury makes a one-time adjustment to double it.
Early Redemption Penalties
Both Series I and EE bonds are long-term investments. While you can cash them in after 12 months, if you redeem them before 5 years, you lose the last 3 months of interest as a penalty. After 5 years, there is no penalty.
Calculation Example
Suppose you purchased a $1,000 Series I bond with a 0.50% fixed rate and the current semiannual inflation rate is 1.97%. The composite rate would be approximately 4.46% annually. If you have held the bond for 3 years, the calculator will apply semiannual compounding and subtract 3 months of interest from the final total to account for the early withdrawal penalty.