dcsimg

I Savings Bonds

Use I Bonds to

What is an I Bond?

A security that earns interest based on combining a fixed rate and an inflation rate.

Comparing I Bonds to EE Bonds

Comparing I Bonds to TIPS

What interest does an I Bond earn?

A combination of a fixed rate and an inflation rate that can and usually does change twice-a-year.

How do I Bonds earn interest?

Is it taxable?

Federal income tax: Yes

State and local income tax: No

Tax Considerations for EE/E or I Bonds

Using the money for higher education may keep you from paying federal income tax on your savings bond interest. Using EE or I Bonds for Education

Paper or electronic?

Electronic

Minimum purchase

Electronic: $25 for a $25 I Bond

Maximum purchase

$10,000 each calendar year for each Social Security Number. You may buy up to $10,000 in electronic I Bonds, and up to $5,000 in paper I Bonds bought with your IRS tax refund.

Available bonds

Electronic:  Any amount from $25 to $10,000 to the penny. For example, with electronic bonds, you could buy an I Bond for $50.23.

How long must I keep an I Bond?

I Bonds are meant to be long-term investments. They continue to earn interest for up to 30 years.

You can cash them in after one year. But if you cash them in before five years, you lose the last three months of interest. (If you cash in an I Bond after 18 months, you get the first 15 months of interest.)

How do I buy an I Bond?

Electronic: Through your TreasuryDirect account

You can arrange to buy electronic bonds in your TreasuryDirect account through payroll direct deposit.

How do I Bonds earn interest?

Interest on an I Bond rates is a combination of two rates:

  1. A fixed rate of return which remains the same throughout the life of the I Bond

    and
  2. A variable inflation rate which we calculate twice a year, based on changes in the nonseasonally adjusted Consumer Price Index for all Urban Consumers (CPI-U) for all items, including food and energy (CPI-U for March compared with the CPI-U for September of the same year, and then CPI-U for September compared with the CPI-U for March of the following year).

Interest is earned on the bond every month. (However, values displayed by the Savings Bond Calculator for bonds that are less than 5 years old do not include the latest 3 months of interest. These values reflect the interest penalty.)

The interest is compounded semiannually:  Every six months, on the 6th and 12th month anniversaries of the issue date,  all interest the bond has earned in previous months is in the bond's new principal value on which interest is earned for the next 6 months.

For more details:  Calculating Interest Rates on I Bonds

To see specifics for your I Bond:  Savings Bond Calculator

More about I Savings Bonds

FAQs about I Bonds

Buying I Bonds

Calculating Interest Rates on I Bonds

Comparing EE Bonds and I Bonds

Comparing I Bonds and TIPS

Converting Paper Savings Bonds to Electronic Bonds (SmartExchangeSM)

Death of a Savings Bond Owner

Giving Savings Bonds as Gifts

Pictures of Paper I Bonds

Redeeming (Cashing in) I Bonds

Registering an I Bond

Replacing or Reissuing a Lost or Destroyed Paper I Bond

Correcting a Social Security Number (SSN) on a Bond

Tax Considerations for I Bonds

Using I Bonds for Education