Series EE Savings Bond Calculator
Calculation Results:
"; resultsHtml += "Initial Purchase Amount: " + formatter.format(initialPurchaseAmount) + ""; resultsHtml += "Bond Issue Date: " + issueDate.toLocaleDateString() + ""; resultsHtml += "Annual Interest Rate: " + annualInterestRate.toFixed(2) + "%"; resultsHtml += ""; resultsHtml += "Current Estimated Value: " + formatter.format(currentValue) + ""; resultsHtml += "Value After 5 Years: " + formatter.format(valueAt5Years) + " (Redemption before 5 years forfeits last 3 months of interest)"; resultsHtml += "Value After 20 Years: " + formatter.format(valueAt20Years) + " (Guaranteed to be at least double the purchase amount)"; resultsHtml += "Value at 30-Year Maturity: " + formatter.format(valueAt30Years) + ""; resultsHtml += "Total Interest Earned (at 30 years): " + formatter.format(totalInterestEarnedAtMaturity) + ""; resultDiv.innerHTML = resultsHtml; } // Set default date to a reasonable past date for example document.addEventListener('DOMContentLoaded', function() { var today = new Date(); var defaultDate = new Date(today.getFullYear() – 4, today.getMonth(), today.getDate()); // 4 years ago document.getElementById('issueDate').valueAsDate = defaultDate; });
Understanding Series EE Savings Bonds
Series EE savings bonds are a low-risk, long-term savings product offered by the U.S. Treasury. They are designed to help individuals save money for future goals, such as education or retirement, with the added benefit of tax advantages.
How Series EE Bonds Work
- Purchase Price: Series EE bonds are purchased at half their face value. For example, a $100 bond costs $50. The calculator uses the "Initial Purchase Amount" which is the actual money you spend.
- Fixed Interest Rate: Bonds issued since May 2005 earn a fixed interest rate for their entire life (up to 30 years). This rate is set at the time of purchase and does not change.
- Semi-Annual Compounding: Interest is compounded semi-annually, meaning it's added to the bond's principal value twice a year, allowing your money to grow faster over time.
- 20-Year Doubling Guarantee: A key feature of EE bonds is that they are guaranteed to double in value if held for 20 years. If the fixed interest rate doesn't achieve this doubling on its own, the Treasury makes a one-time adjustment at the 20-year mark to ensure it reaches double the purchase price.
- 30-Year Maturity: Series EE bonds continue to earn interest for 30 years from their issue date. After 30 years, they stop earning interest.
Tax Advantages
Interest earned on Series EE bonds is exempt from state and local income taxes. Federal income tax on the interest can be deferred until you redeem the bond or it reaches maturity, whichever comes first. Furthermore, if you use the bond proceeds to pay for qualified higher education expenses, the federal tax on the interest may also be excluded.
Redemption Rules
- Minimum Holding Period: You must hold a Series EE bond for at least one year before you can redeem it.
- Interest Forfeiture: If you redeem a bond before holding it for five years, you will forfeit the last three months of interest. This calculator shows the value at 5 years to highlight this threshold.
Using the Series EE Savings Bond Calculator
Our calculator helps you estimate the future value of your Series EE savings bonds based on your initial purchase amount, the bond's issue date, and its annual interest rate. This can be particularly useful for financial planning, understanding your bond's growth trajectory, and deciding the optimal time for redemption.
Example Calculation:
Let's say you purchased a Series EE bond for $50 on January 1, 2020, with an annual interest rate of 0.10%.
- Initial Purchase Amount: $50.00
- Bond Issue Date: 1/1/2020
- Annual Interest Rate: 0.10%
Based on these inputs, the calculator would provide estimates similar to these (values are illustrative and depend on the exact current date):
- Current Estimated Value (e.g., as of late 2023): Approximately $50.XX
- Value After 5 Years (1/1/2025): Approximately $50.XX (still close to purchase price due to low rate, but past penalty period)
- Value After 20 Years (1/1/2040): $100.00 (guaranteed doubling)
- Value at 30-Year Maturity (1/1/2050): $100.XX (slight growth beyond doubling due to continued interest on the doubled amount)
- Total Interest Earned (at 30 years): Approximately $50.XX
This example demonstrates how the 20-year doubling guarantee significantly impacts the bond's value, especially with very low fixed rates.