Series I Bonds Advantages
May 12th, 2010
Series I Bonds advantages are discussed in this section of US Savings Bonds information website. Series i US Savings Bonds have many advantages. Many of the advantages of Series I Bonds are shared by other US Savings Bonds.
Series I Bonds Advantages
- TIPS (Treasury Inflation Protected Securities) offer a form of protection against inflation in the U.S. Consumer Price Index.
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TIPS are guaranteed by the full faith and credit of the U.S. government.
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TIPS are exempt from state and local income taxes.
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No Federal Income taxes are assessed on the accrual and compounding of interest until the investor redeems the bonds.
Series I Bonds Considerations and Drawbacks
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CPI inflation may not match the inflation rate of the investor’s own market basket of purchases.
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The bonds must be held for a minimum of one year and are not freely tradeable.
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A 3-month foregone interest penalty is assessed if the security is redeemed within 5 years.
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The maximum allowable purchase amount is $30,000 per person per year. Advantages Considerations and Drawbacks
| Series I Bonds period of issuance | Fixed real rate (1) |
| 9/98 – 10/98 | 3.40% |
| 11/98 – 4/99 | 3.30% |
| 5/99 – 10/99 | 3.30% |
| 11/99 – 4/00 | 3.40% |
| 5/00 – 10/00 | 3.40% |
| 11/00 – 4/01 | 3.40% |
| 5/01 – 10/01 | 3.00% |
| 11/01 – 4/02 | 2.00% |
| 5/02 – 10/02 | 2.00% |
| 11/02 – 4/03 | 1.60% |
| 5/03 – 10/03 | 1.10% |
| 11/03 – 4/04 | 1.10% |
Note: (1) Plus the CPI-U rate of inflation
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