I bonds — TreasuryDirect (2024)

FAQs

Can I buy $10,000 worth of I bonds every year? ›

Yes, you can purchase up to $10,000 in electronic I bonds each calendar year. You can also buy an additional $5,000 in paper I bonds using your federal tax return.

The cons of investing in I-bonds

Another disadvantage to I-bonds is the fact that you have to purchase them directly from the Treasury via the website, TreasuryDirect.gov, which means you can't buy them through your brokerage with your other investments.

The current composite I bond rate is 4.28%. This includes a 1.30% fixed rate and a 1.48% inflation rate. The current rate applies for six months to bonds purchased between May 1, 2024, and Oct. 31, 2024.

You can get your cash for an EE or I savings bond any time after you have owned it for 1 year. However, the longer you hold the bond, the more it earns for you (for up to 30 years for an EE or I bond). Also, if you cash in the bond in less than 5 years, you lose the last 3 months of interest.

The interest earned by purchasing and holding savings bonds is subject to federal tax at the time the bonds are redeemed. However, interest earned on savings bonds is not taxable at the state or local level.

You can count on a Series I bond to hold its value; that is, the bond's redemption value will not decline.

TIPS offer greater liquidity and the higher yearly limit allows you to stash far more cash in TIPS than I-bonds. If you're saving for education, I-bonds may be the way to go.

The 4.28% composite rate for I bonds issued from May 2024 through October 2024 applies for the first six months after the issue date. The composite rate combines a 1.30% fixed rate of return with the 2.96% annualized rate of inflation as measured by the Consumer Price Index for all Urban Consumers (CPI-U).

Electronic Series EE and I savings bonds are redeemable online at the U.S. Treasury Department's TreasuryDirect website. Using your TreasuryDirect account, you can redeem all or a portion of your savings bond as long as it's been at least a year since you purchased it.

Should I sell my I bonds now? ›

If you want to keep all your good interest and get the most out of your I Bonds you should cash out: after earning 3 months of lower interest and. just after the 1^st of the month.

How long do I get the current I Bond interest rate for? This fixed rate stays with those I Bonds throughout the 30 years that they earn interest. The current semiannual inflation rate of 2.96% will reset every 6 months following the purchase, or renewal, of your I bond.

When you cash your bonds online, the cash generally transfers to your checking or savings account within two business days of the request.

Since January 1, 2012, paper savings bonds are no longer available at banks or other financial institutions. Paper Series I bonds can still be bought with IRS tax refunds, but Series EE bonds are available only in electronic form.

Cons of Buying I Bonds

Potential disadvantages include: Maximum investment each year is $10,000. Yield is taxed as ordinary income. Must open a TreasuryDirect account to buy and sell.

In a calendar year, one Social Security Number or one Employer Identification Number may buy: up to $10,000 in electronic I bonds, and. up to $5,000 in paper I bonds (with your tax refund)

That said, there is a $10,000 limit each year for purchasing them. There are a number of ways around this limit, though, including using your tax refund, having your spouse purchase bonds as well and using a separate legal entity like a trust.

You may purchase up to $10,000 of each savings bond type - EE or I bonds - per person each calendar year. The minimum purchase amount for a Treasury Marketable Security is $100 with multiples sold in the same increment.

Remember, when you cash out your I Bonds you don't earn the interest until you complete the month and that you lose the prior 3 months' interest. If you want to keep all your good interest and get the most out of your I Bonds you should cash out: after earning 3 months of lower interest and.