1. What is a US Treasury Savings Bond?

US Treasury Savings Bonds are government-backed debt securities that pay interest over time. They are a low-risk investment option for individuals. The value of a bond changes over time based on interest rates and redemption terms.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• \( Face \) — The original face value of the bond (USD)
• \( Redemption\ Factor \) — Current redemption factor from Treasury tables (decimal)

Explanation: The redemption factor accounts for accrued interest and current value adjustments based on the bond's issue date and current date.

3. Importance of Bond Valuation

Details: Accurate bond valuation is crucial for financial planning, tax reporting, and understanding the current worth of your investments.

4. Using the Calculator

Tips: Enter the face value in USD and the current redemption factor (available from Treasury Department tables). Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Where do I find redemption factors?
A: Redemption factors are published by the US Treasury Department and can be found on their official website or through financial institutions.

Q2: How often do redemption factors change?
A: For most savings bonds, redemption factors are updated monthly based on current interest rates.

Q3: What's the difference between face value and current value?
A: Face value is the original denomination, while current value includes all accrued interest up to the present date.

Q4: Are savings bonds taxable?
A: Interest earned on savings bonds is subject to federal income tax, but generally exempt from state and local taxes.

Q5: When is the best time to redeem savings bonds?
A: This depends on your financial needs and the bond's maturity. Most bonds stop earning interest after 30 years.