Estimate the future value of your Series I Savings Bond based on your initial investment, purchase date, desired redemption date, and an estimated average annual composite rate. This calculator also accounts for the 3-month interest penalty if redeemed before 5 years.
Understanding US Government Savings Bonds (Series I)
US Government Savings Bonds, particularly Series I bonds, are a popular investment choice known for their safety and inflation protection. Issued by the U.S. Treasury, these bonds earn interest based on a combination of a fixed rate and an inflation rate, adjusted every six months (May and November).
Key Features of Series I Bonds:
Inflation Protection: The interest rate adjusts with inflation, helping to protect your purchasing power.
Fixed Rate Component: A fixed rate is set at the time of purchase and remains for the life of the bond.
Semiannual Compounding: Interest is added to the bond's value monthly and compounded semiannually.
Tax Advantages: Interest earned on savings bonds is exempt from state and local income taxes, and federal taxes can be deferred until the bond is redeemed or matures.
Maturity: Series I bonds earn interest for 30 years.
Important Redemption Rules:
Minimum Holding Period: You cannot redeem a Series I bond for at least one year after its purchase date.
Early Redemption Penalty: If you redeem a Series I bond before five years, you will forfeit the last three months of interest. For example, if you redeem a bond after 4 years and 6 months, you will only receive interest for 4 years and 3 months.
How to Use This Calculator:
This calculator provides a projection of your Series I bond's value based on an estimated average annual composite rate. Since actual Series I bond rates change every six months based on inflation, and the fixed rate varies by purchase period, this calculator uses a simplified approach. For precise, real-time values of your specific bonds, always refer to the official TreasuryDirect website.
Initial Bond Purchase Amount: Enter the amount you paid for your bond.
Bond Purchase Month/Year: Input the month and year you purchased the bond.
Desired Redemption Month/Year: Enter the month and year you plan to redeem the bond.
Estimated Average Annual Composite Rate: Provide an average annual rate (e.g., 5.0% for a bond that might average 0.4% fixed + 4.6% inflation annually). This is a crucial estimate for the projection.
The calculator will then estimate the bond's value, the total interest earned, and indicate if an early redemption penalty applies.
Example Calculation:
Let's say you purchased a Series I bond for $1,000 in January 2020. You estimate an average annual composite rate of 5.0% and plan to redeem it in January 2025.
Initial Investment: $1,000
Purchase Date: January 2020
Redemption Date: January 2025
Estimated Average Annual Composite Rate: 5.0%
The calculator would determine that you held the bond for exactly 5 years (60 months). Since this is not less than 5 years, no penalty would apply. The value would be calculated based on the 5.0% annual growth over 5 years.
If you instead redeemed it in October 2024 (4 years and 9 months, or 57 months), the calculator would apply the 3-month interest penalty, reducing your total interest earned.
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function calculateBondValue() {
var initialInvestment = parseFloat(document.getElementById("initialInvestment").value);
var purchaseMonth = parseInt(document.getElementById("purchaseMonth").value);
var purchaseYear = parseInt(document.getElementById("purchaseYear").value);
var redemptionMonth = parseInt(document.getElementById("redemptionMonth").value);
var redemptionYear = parseInt(document.getElementById("redemptionYear").value);
var avgAnnualRate = parseFloat(document.getElementById("avgAnnualRate").value);
var resultDiv = document.getElementById("bondResult");
resultDiv.innerHTML = ""; // Clear previous results
// Input validation
if (isNaN(initialInvestment) || initialInvestment <= 0) {
resultDiv.innerHTML = "Please enter a valid initial investment amount.";
return;
}
if (isNaN(purchaseMonth) || purchaseMonth 12 ||
isNaN(purchaseYear) || purchaseYear 2100) {
resultDiv.innerHTML = "Please enter a valid bond purchase date.";
return;
}
if (isNaN(redemptionMonth) || redemptionMonth 12 ||
isNaN(redemptionYear) || redemptionYear 2100) {
resultDiv.innerHTML = "Please enter a valid desired redemption date.";
return;
}
if (isNaN(avgAnnualRate) || avgAnnualRate < 0) {
resultDiv.innerHTML = "Please enter a valid average annual composite rate (0 or greater).";
return;
}
// Calculate total months held
var purchaseDate = new Date(purchaseYear, purchaseMonth – 1, 1); // Month is 0-indexed
var redemptionDate = new Date(redemptionYear, redemptionMonth – 1, 1);
if (redemptionDate < purchaseDate) {
resultDiv.innerHTML = "Redemption date cannot be before the purchase date.";
return;
}
var totalMonthsHeld = (redemptionYear – purchaseYear) * 12 + (redemptionMonth – purchaseMonth);
if (totalMonthsHeld < 12) {
resultDiv.innerHTML = "Series I bonds cannot be redeemed before 12 months.";
return;
}
// Convert annual rate to decimal
var annualRateDecimal = avgAnnualRate / 100;
// Calculate gross projected value (before penalty)
// Using simple annual compounding for the estimated average annual rate
var grossProjectedValue = initialInvestment * Math.pow(1 + annualRateDecimal, totalMonthsHeld / 12);
var penaltyAmount = 0;
var penaltyAppliedText = "No";
// Apply 3-month interest penalty if held for less than 5 years (60 months)
if (totalMonthsHeld = 9 if totalMonthsHeld >= 12
if (monthsForPenaltyCalculation < 0) {
monthsForPenaltyCalculation = 0;
}
var valueMinus3Months = initialInvestment * Math.pow(1 + annualRateDecimal, monthsForPenaltyCalculation / 12);
penaltyAmount = grossProjectedValue – valueMinus3Months;
penaltyAppliedText = "Yes";
}
var netProjectedValue = grossProjectedValue – penaltyAmount;
var totalInterestEarned = netProjectedValue – initialInvestment;
// Format results
var formattedInitialInvestment = initialInvestment.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
var formattedGrossProjectedValue = grossProjectedValue.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
var formattedPenaltyAmount = penaltyAmount.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
var formattedNetProjectedValue = netProjectedValue.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
var formattedTotalInterestEarned = totalInterestEarned.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
resultDiv.innerHTML += "Initial Bond Purchase Amount: " + formattedInitialInvestment + "";
resultDiv.innerHTML += "Total Months Held: " + totalMonthsHeld + " months";
resultDiv.innerHTML += "Gross Projected Value (before penalty): " + formattedGrossProjectedValue + "";
resultDiv.innerHTML += "3-Month Interest Penalty Applied: " + penaltyAppliedText + "";
if (penaltyAmount > 0) {
resultDiv.innerHTML += "Penalty Amount: " + formattedPenaltyAmount + "";
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resultDiv.innerHTML += "Net Projected Bond Value: " + formattedNetProjectedValue + "";
resultDiv.innerHTML += "Total Interest Earned (Net): " + formattedTotalInterestEarned + "";
}