Savings Bond Values

A savings bond is a type of government bond that accumulates interest, and is issued in denominations ranging from $50-$10,000. Interest earned on a savings bond is completely tax-free, making this type of bond a long-term investment that is taxed deferred. Although the average savings bond takes about 15 to 17 years to reach maturity, the bond will continue to accrue interest for a full 30 years. Savings bonds benefit the government by allowing them to fulfill departmental obligations, and benefit the bond holder by providing a stable and reliable long-term investment opportunity. The following paragraphs discuss the various types of savings bonds, and more importantly, how to calculate savings bond values.

Types of Savings Bonds
There are currently two types of savings bonds issued by the federal government – series EE bonds, and Series I bonds. Both types of savings bonds have their own advantages and disadvantages, so it is important to review each type before selecting one.

Series EE bonds are issued in 30 year terms, and both the interest and principal must be paid as a lump sum upon the bonds redemption. Interest earned on Series EE bonds is exempt from local and state taxes, but is still subject to federal taxes. A Series EE bond can be purchased for half of its face value, and are currently issued in eight different denominations. Series EE bonds are not only risk-free because they are guaranteed by the federal government to reach their face value, they also usually exceed this value after a period of about 15 to 17 years.

Series I bonds are specifically designed to hedge the effects of inflation by earning a combined interest rate. The bond carries a fixed rate in addition to a special inflation premium. Both of these rates are adjusted on a yearly basis by the Treasury Department in the months of November and May. The value of a Series I bond increases monthly, the interest is compounded twice a year, and the return of the bond is paid in its entirety upon maturation. Although Series I bonds are issued in the same denominations as series EE bonds they must be purchased at face value, not half-cost.

How to Calculate the Value of a Savings Bond
Although it may seem complex, calculating savings bond values is simple when you know the steps involved. The first step is finding a reliable savings bond calculator. Fortunately, the United States Treasury offers a free savings bond calculator on their official website for all consumers to use. To use the savings bond calculator you’ll simply need to type in the issue date and serial number of the bond, both of which can be found printed on the bond certificate. Some savings bond calculators will allow the user to compare the savings bond values of multiple bonds by adding several at a time.

It is also possible to calculate the recent or future savings bond value by changing the date within the ‘value as of” field. To calculate the savings bond value of a Series I bonds you’ll simply need to input the price printed on the bond, while calculating the value of Series EE bonds will require you to divide half of the total printed bond price. Determining savings bond values is important because it allows the investor to ensure that they are receiving the full bond return promised to them by the federal government, and it also aids in the process of buying, selling, and trading savings bonds.

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