I Bond Value Calculator
Use this calculator to estimate the future value of your Series I Savings Bonds. I Bonds earn a composite interest rate that combines a fixed rate (which stays the same for the life of the bond) and an inflation rate (which changes every six months).
Understanding Series I Savings Bonds
Series I Savings Bonds, commonly known as I Bonds, are a popular investment option offered by the U.S. Treasury. They are designed to protect your investment from inflation, making them an attractive choice for long-term savings.
How I Bond Interest Works
The interest rate on an I Bond is a composite rate, meaning it's made up of two parts:
- Fixed Rate: This rate is set when you purchase the bond and remains the same for the entire life of the bond (up to 30 years). It can be 0% or a positive value.
- Inflation Rate: This rate is announced twice a year (in May and November) and is based on changes in the Consumer Price Index for all Urban Consumers (CPI-U). It adjusts every six months from your bond's issue date.
The composite rate is calculated using the formula: [Fixed Rate + (2 * Semiannual Inflation Rate) + (Fixed Rate * Semiannual Inflation Rate)]. This rate is then applied to your bond's value.
Compounding and Value Updates
I Bonds accrue interest monthly, but this interest is compounded (added to the principal) semi-annually. This means that for the first six months, interest is calculated on your initial purchase amount. After six months, the accrued interest is added to your principal, and the new principal earns interest for the next six-month period, and so on. The value displayed on TreasuryDirect.gov reflects the bond's value as of the first day of the current month.
Redemption Rules and Penalties
- Minimum Holding Period: You cannot redeem an I Bond for at least one year after its purchase date.
- Early Redemption Penalty: If you redeem an I Bond before five years, you will forfeit the last three months of interest. For example, if you redeem after 2 years and 3 months, you will only receive interest for 2 years. This calculator does not automatically apply this penalty but it's crucial to be aware of it.
- Tax Benefits: Interest earned on I Bonds is exempt from state and local income taxes. Federal income tax can be deferred until you redeem the bond or it matures.
Using the Calculator
This calculator estimates your I Bond's value by simulating its growth over a specified number of months. It assumes the "First 6-Month Inflation Rate" applies to the first six months after purchase, and the "Second 6-Month Inflation Rate" applies to the next six months, alternating thereafter. This provides a realistic estimate for periods where you know the applicable inflation rates.
Disclaimer: This calculator provides an estimate based on the inputs provided and simplified assumptions about future inflation rates. It is not financial advice. Always consult official TreasuryDirect resources or a financial advisor for precise information and personalized guidance.
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function calculateIBondValue() {
var purchaseAmount = parseFloat(document.getElementById("purchaseAmount").value);
var fixedRate = parseFloat(document.getElementById("fixedRate").value);
var firstInflationRate = parseFloat(document.getElementById("firstInflationRate").value);
var secondInflationRate = parseFloat(document.getElementById("secondInflationRate").value);
var calculationMonths = parseInt(document.getElementById("calculationMonths").value);
if (isNaN(purchaseAmount) || isNaN(fixedRate) || isNaN(firstInflationRate) || isNaN(secondInflationRate) || isNaN(calculationMonths)) {
document.getElementById("result").innerHTML = "Please enter valid numbers for all fields.";
return;
}
if (purchaseAmount <= 0 || calculationMonths <= 0) {
document.getElementById("result").innerHTML = "Purchase amount and calculation months must be positive.";
return;
}
// Convert annual rates to decimal form
var fixedRateDec = fixedRate / 100;
var firstInflationRateDec = firstInflationRate / 100;
var secondInflationRateDec = secondInflationRate / 100;
// Calculate semiannual components
var semiannualFixedRate = fixedRateDec / 2;
var semiannualInflation1 = firstInflationRateDec / 2;
var semiannualInflation2 = secondInflationRateDec / 2;
// Calculate composite rates for each 6-month period
// Composite Rate = Fixed Rate + (2 * Semiannual Inflation Rate) + (Fixed Rate * Semiannual Inflation Rate)
var compositeRate1 = semiannualFixedRate + semiannualInflation1 + (semiannualFixedRate * semiannualInflation1);
var compositeRate2 = semiannualFixedRate + semiannualInflation2 + (semiannualFixedRate * semiannualInflation2);
var currentValue = purchaseAmount;
var currentPeriodStartValue = purchaseAmount; // Value at the start of the current 6-month compounding period.
var totalInterestEarned = 0;
for (var m = 1; m <= calculationMonths; m++) {
var effectiveCompositeRate;
// Determine which composite rate applies for the current 6-month period
// (m-1)/6 gives the 0-indexed 6-month period number.
// % 2 alternates between 0 and 1.
if (Math.floor((m – 1) / 6) % 2 == 0) {
effectiveCompositeRate = compositeRate1;
} else {
effectiveCompositeRate = compositeRate2;
}
// If it's the start of a new 6-month period, update the principal for this period
if ((m – 1) % 6 == 0) {
currentPeriodStartValue = currentValue;
}
// Calculate the monthly growth factor for this 6-month period
var monthlyGrowthFactor = Math.pow(1 + effectiveCompositeRate, 1/6);
// Calculate the value for the current month based on the currentPeriodStartValue
// and how many months into the current 6-month period we are.
var monthsIntoPeriod = (m – 1) % 6 + 1;
currentValue = currentPeriodStartValue * Math.pow(monthlyGrowthFactor, monthsIntoPeriod);
}
totalInterestEarned = currentValue – purchaseAmount;
var resultHTML = "
Calculation Results:
";
resultHTML += "Initial Purchase Amount:
$" + purchaseAmount.toFixed(2) + "";
resultHTML += "Estimated Value After " + calculationMonths + " Months:
$" + currentValue.toFixed(2) + "";
resultHTML += "Total Estimated Interest Earned:
$" + totalInterestEarned.toFixed(2) + "";
if (calculationMonths < 12) {
resultHTML += "Note: I Bonds cannot be redeemed for the first 12 months after purchase.";
} else if (calculationMonths < 60) {
resultHTML += "Note: If redeemed before 5 years, you will forfeit the last three months of interest.";
}
document.getElementById("result").innerHTML = resultHTML;
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