Savings Bond Calculator

A savings bond is a low-risk debt security issued by a government, most commonly the U.S. Treasury's Series EE and Series I bonds, purchased at face value or a discount and held to earn interest over time. Unlike a CD, savings bonds are backed directly by the issuing government and are not FDIC insured in the same way, though they are considered extremely safe since they carry the government's full backing.

Use FV = P(1 + r/n)^(nt), where P is the purchase price, r is the composite annual rate as a decimal, n is the compounding frequency per year, and t is the number of years held. For a $1,000 bond at a 3.5% composite rate compounded semiannually for 10 years, FV = 1,000 x (1 + 0.035/2)^20 = $1,414.78, earning $414.78 in interest.

U.S. Series EE and Series I savings bonds compound semiannually. Interest is calculated and added to the bond's redemption value every six months, and that accrued interest then earns interest itself going forward. This calculator's semiannual compounding option models that structure directly.

The composite rate is the actual annualized rate a bond earns, and for Series I bonds it combines a fixed rate set for the bond's life with an inflation rate that adjusts every six months based on the Consumer Price Index. Because it changes twice a year, this calculator asks you to enter your bond's current composite rate directly rather than assuming a fixed figure that would go out of date.

A Series EE bond earns a fixed rate for its life, set when purchased, and the U.S. Treasury guarantees it will double in value over 20 years regardless of the stated rate. A Series I bond earns a combination of a fixed rate and an inflation-adjusted rate that resets every six months, so its return tracks inflation more closely but is less predictable in advance.

U.S. savings bonds must be held at least 12 months before they can be redeemed at all. If redeemed before 5 years, you forfeit the most recent 3 months of interest as an early redemption penalty. Bonds continue earning interest for up to 30 years from issue, after which they stop earning interest entirely and should be redeemed.

Yes, interest is generally subject to federal income tax, though it is exempt from state and local income tax. You can choose to report interest annually or defer reporting it until the bond is redeemed or reaches final maturity. Some savings bond interest used for qualified higher education expenses may also be excluded from federal tax under specific income limits.

The value depends on the bond's series, issue date, denomination, and the interest it has accrued since. For an existing paper or electronic bond, look up its exact current redemption value on TreasuryDirect, then project future growth from that value by applying the bond's stated or composite rate with the same compound-interest formula used here.

It depends on the rates offered at the time. A CD locks in a fixed nominal rate for its term with penalties for early withdrawal, while a savings bond's rate can be fixed (EE) or partly inflation-linked (I), and can only be redeemed after a minimum holding period with its own early-redemption penalty. Compare the actual composite rate of each using their respective calculators rather than assuming one structurally beats the other.

Semiannual compounding calculates and credits interest twice a year rather than once, so accrued interest starts earning its own interest sooner. On a $200 bond at a 4.2% composite rate over 30 years, semiannual compounding grows it to $695.94, slightly more than the $693.24 that annual compounding at the same nominal rate would produce over the same period.