Is it possible to determine the "final" value of a U.S. Savings Bond on its maturity date? The interest rate is fixed, the compounding periods are known (semi-annually for EE bonds), and the term is known as well (usually 30 years).
It seems like it should be a simple compounding interest problem, yet I can't find any resources for making the calculation.
This calculator will give you the current value, but doesn't allow you to look ahead more than one period.
The problem is that there have been many changes to how savings bonds are purchased and interest is set. With no ability to predict the rate for the entire life of the bond the value at 30 years will be impossible to calculate.
For recent bonds:
What interest will I get if I buy an EE Bond now?
0.20% annual interest rate for EE Bonds issued between May 1, 2013 and October 31, 2013.
EE Bonds issued after May 2005 earn interest for up to 30 years. They earn a fixed rate of interest. For the first 20 years, EE bonds earn the same fixed rate that was set when the bond was issued. We may change the rate or the way an EE Bond earns interest for the last 10 years of the bond's 30-year life. If we make a change, we have to do it before that 10-year period starts. (This is different from the type of interest that I Bonds earn. Comparing I Bonds to EE Bonds.)
When will my paper bond be worth its full value?
EE Bonds continue to earn interest for up to 30 years.
Electronic bonds are sold at face value (not half of face value). They start to earn interest right away on the full face value. Treasury guarantees that for an electronic EE Bond with a June 2003 or later issue date, after 20 years, the redemption (cash-in) value will be at least twice the purchase price of the bond. If the redemption (cash-in) value is not at least twice the purchase price of the electronic bond as a result of applying the fixed rate of interest for those 20 years, Treasury will make a one-time adjustment at the 20 year anniversary of the bond's issue date to make up the difference.
EE Bonds issued May 1997 – April 2005: Interest rate
For the six-month rate periods that start in the months from May 1, 2013 through October 31, 2013, the annual interest rate that applies to EE Bonds with issue dates from May 1997 through April 2005 is 0.68%.
EE Bonds issued from May 1997 through April 2005 earn a variable rate of interest. Treasury determines the rate each May 1 and November 1 and applies that rate for six-month rate periods that start in the next six months.
Again, with no ability to predict the rate for the entire life of the bond the value at 30 years will be impossible to calculate.
