EE Bond Value Calculator
Understanding EE Bonds and Their Value
Series EE savings bonds are a popular, low-risk savings product offered by the U.S. Treasury. They are designed to help individuals save money and are known for their safety and guaranteed growth. Unlike many investments, EE bonds are purchased at half their face value (e.g., a $100 bond costs $50) and earn a fixed interest rate for 30 years.
How EE Bonds Work
- Purchase Price: You buy an EE bond for half its face value. For example, to get a $100 bond, you pay $50. Our calculator uses the actual purchase price as the input.
- Fixed Interest Rate: Bonds issued since May 2005 earn a fixed interest rate for their entire 30-year life. Bonds issued before that date had variable rates for certain periods. This calculator assumes you know the fixed annual interest rate for your specific bond.
- Semi-Annual Compounding: Interest on EE bonds is compounded semi-annually (twice a year). This means that the interest earned in one six-month period is added to the principal, and then the next period's interest is calculated on the new, larger principal.
- 20-Year Doubling Guarantee: A key feature of EE bonds is that they are guaranteed to double in value after 20 years. If the fixed interest rate doesn't achieve this doubling on its own, the Treasury will make a one-time adjustment at the 20-year mark to ensure the bond's value is at least double its purchase price.
- 30-Year Maturity: EE bonds stop earning interest after 30 years from their issue date. After this point, their value remains constant.
Why Calculate Your EE Bond's Value?
Knowing the current value of your EE bonds is essential for several reasons:
- Financial Planning: Incorporate the bond's value into your overall net worth and retirement planning.
- Estate Planning: Understand the value of assets for beneficiaries.
- Tax Planning: Interest earned on EE bonds is exempt from state and local income taxes, and federal taxes can be deferred until the bond is cashed or matures.
- Decision Making: Determine if it's the right time to cash in your bonds or continue holding them.
How This Calculator Works
This calculator uses the purchase price, annual interest rate, and the issue and current dates to estimate the bond's current value. It applies the semi-annual compounding formula and incorporates the crucial 20-year doubling guarantee. It also accounts for the 30-year interest-earning limit.
Important Note: The actual interest rate for your specific EE bond depends on its issue date. For bonds issued after May 2005, the rate is fixed. For older bonds, rates may have varied. Always refer to TreasuryDirect.gov or your bond's documentation for the precise interest rate applicable to your bond.
Example Calculation:
Let's say you purchased an EE bond for $25 (face value $50) in January 2000, with an annual interest rate of 1% (0.01). You want to know its value in January 2020 (exactly 20 years later).
- Purchase Price: $25
- Annual Interest Rate: 0.01
- Issue Date: January 2000
- Current Date: January 2020
Without the doubling guarantee, the bond would be worth approximately $30.50 after 20 years. However, because EE bonds are guaranteed to double after 20 years, and $30.50 is less than $50 (double the $25 purchase price), the bond's value would be adjusted to $50 at that 20-year mark.
If the annual interest rate was 4% (0.04) instead, the bond would be worth approximately $55.20 after 20 years. Since $55.20 is already greater than $50, the doubling guarantee would not apply, and the bond would be worth $55.20.