1. What is the I Bonds Value Formula?

The I Bonds value formula calculates the current value of Series I savings bonds based on their face value and the current composite rate factor. This helps bondholders understand their investment's worth at any given time.

2. How Does the Calculator Work?

The calculator uses the I Bonds value formula:

Where:

• \( Face \) — Original denomination of the bond (USD)
• \( Composite\ Rate\ Factor \) — Current multiplier based on inflation and fixed rates (unitless)

Explanation: The composite rate factor accounts for all interest accrued since the bond was issued, combining both the fixed rate and inflation adjustments.

3. Importance of I Bonds Valuation

Details: Accurate valuation is crucial for financial planning, tax reporting, and understanding the real return on your savings bond investment, especially since I Bonds are inflation-protected.

4. Using the Calculator

Tips: Enter the face value in USD and the current composite rate factor (available from TreasuryDirect). Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Where do I find the composite rate factor?
A: The current composite rate factors are published monthly on TreasuryDirect.gov or can be calculated using the published rates.

Q2: How often does the composite rate change?
A: The inflation component changes every 6 months based on CPI-U, while the fixed rate is set at purchase.

Q3: What's the minimum investment for I Bonds?
A: The minimum electronic purchase is $25, while paper bonds (when available) start at $50.

Q4: Are there tax advantages to I Bonds?
A: Yes, I Bonds offer tax-deferred federal interest and may be exempt from state/local taxes when used for education.

Q5: What's the maximum annual purchase amount?
A: $10,000 per Social Security Number per year for electronic bonds, plus $5,000 in paper bonds via tax refund.