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What are Series I Savings Bonds?

By Kevin Janiec, CFP®, MBA

You have likely heard plenty about the current inflation environment.

However, you might not have heard much about Series I Savings Bonds (I bonds). 

Here’s a timely FYI on what I Bonds are and how they work:

  1. I bonds are inflation-protected, interest-bearing savings instruments that are purchased directly through the US Treasury.
  2. The yield is calculated and compounded semi-annually in May and November based on a fixed rate and inflation metric (CPI).  Current rates on these vehicles are available at TreasuryDirect.gov.
  3. There is a $10,000 purchase limit per person (children included) in each household on an annual basis. These investments can be purchased through an individual account at Treasurydirect.gov.
  4. They have a 1-year mandatory holding period. To redeem these bonds in less than 5 years, you pay a penalty of the previous 3 months’ interest. After 5 years, you can redeem the bonds penalty-free.
  5. You cannot purchase these investments within an IRA, 401(k), or joint account. 

Additional Frequently Asked Questions are available at TreasuryDirect.gov.

If you’re a client, we can discuss Series I Bonds further as we meet in the near future.  Otherwise, if you have any questions, don’t hesitate to give us a call.


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