I Bonds Calculator

If you are interested in I Bonds, these are a good investment because they are protected, so they won't lose value due to inflation. I bonds are similar to T-Bills; they are backed by the United States government. There is virtually no risk involved with I Bonds. You can spend as little as $50 for paper I Bonds, and $25.00 or electronic I Bonds through Treasury Direct. You can buy as much as $30,000 in I Bonds per year. You pay face value for the I Bonds, and the bonds earn interest for 30 years. All I Bonds have to be a year old before they can be redeemed. To find out how much an I Bond is worth before cashing it in, you would use an I Bonds calculator.

You can go online to an I Bonds Calculator and click on the link to "get started." The next thing you do is go to the drop down box and choose the denomination and series of your bond. You will need to enter the issue date, the serial number into the appropriate places on the I Bonds calculator. If you don't quite understand what they I Bonds calculator is giving you, you can click on the help button. There you will find descriptions for the fields you are looking at. If you purchased a $50 I Bond 29 years ago it will have made a little over $157 in interest. That doesn't sound like much for 29 years of holding a bond, but the more money you have invested in I Bonds the more interest you will accrue. For instance, if you bought a $1000 I Bond, in 29 years you would have accrued $3,141.20 in interest. The interest rate is fixed throughout the life of the bond. If you bought an I Bond in 1980 with a fixed rate of 6.31 percent, the interest rate will remain at the same interest rate throughout the life of the bond. If you were to buy an I Bond now, the fixed rate would be about half of it was back in 1980.

The I Bonds calculate is very useful if you report your yearly interest accrued on your bonds to the IRS. You enter in the bonds that you want to list for the IRS, and then enter the end of the year tax year into the "value as of" box. For instance, if you do your taxes for 2009, you would enter 12/2009 into the "value as of" box. You will find the value to put on your taxes in the "YTD interest box."