One way how the US government finances operation is by issuing saving bonds. Managed by the U.S department of the treasury, it is generally considered one of the safest investments in the globe. This is primarily due to the reason that it is backed by the US government. There are some useful guidelines for the reader to calculate the value of saving bonds.

As of now, two series, EE and I, are available for purchase as saving bonds. It is important to know of them in order to understand the value of savings bonds.

Saving bonds of the Series EE are a continuation of the E series of the 70's and have an advantage of longer maturity dates of 30-40 years. They have a fixed rate which is payable upon redemption.

As compared to the EE series, I series was issued by the US Gov in 1998. The value of saving bonds, in this series, is based upon a double yield. It has a variable inflation-adjustment rate, in addition to a fixed interest rate. The inflation adjustment is calculated every six months.

The value of savings bonds is enhanced by the fact that it has a higher interest rate than the banks.

The value of savings bonds is done by the addition of the face value of the bond to the accrued interest. Accrued interest is the interest that has accumulated since the principal investment or since the previous interest payment if there has been one already.

The primary formula for calculating the interest accrued in a given period is:

, where I_A is the accrued interest, T is the fraction of the year, P is the principal, and R is the annualized interest rate.

The US government has an online calculator on which you can easily calculate the value of saving bonds by entering the required series. The value of saving bonds whose maturity date has passed and those which a variable rate of interest is a tad difficult. It is essential to note that the older series of bonds are of little value of saving bonds.

The purchase of the saving bonds can be done via the US department of treasury or Banks. The US government has a withstanding limit of 5000$ purchase of the saving bonds in any series. For the redemption process, the aforementioned sources are available. The limit for redemption is that you can redeem a bond that is at least a year old and you can redeem 1,000$ at a time.

 I_A = T*P*R