US Savings Bonds

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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 are guaranteed by the full faith and credit of the U.S. government.

• TIPS are exempt from state and local income taxes.

• As long as the Series I Bonds are held for a minimum of one year, the investor can redeem Series I Bonds at any time up to 30-years from the date of purchase.

• 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

• CPI inflation may not match the inflation rate of the investor’s own market basket of purchases.

• The bonds must be held for a minimum of one year and are not freely tradeable.

• A 3-month foregone interest penalty is assessed if the security is redeemed within 5 years.

• The maximum allowable purchase amount is $30,000 per person per year. Advantages Considerations and Drawbacks

Note: (1) Plus the CPI-U rate of inflation

I bonds or Series I Bonds are U.S. Treasury Inflation Indexed US Savings Bonds. Series I Savings Bonds or I bonds for short are designed to protect investors from the effects of inflation. This section of Us Savings Bonds Information website covers i bonds or series i US Savings Bonds.

U.S. Treasury Inflation Indexed Savings Bonds (Series I Savings Bonds or I Bonds for short)

What are i bonds, i savings bond, or Series i US Savings Bonds?

A Series i US savings bond, or i bonds or i savings bond for short, is a U.S. Treasury Inflation Indexed Savings Bonds. Series I Savings Bonds or i bonds for short are U.S. Treasury securities issued by the U.S. Government and are designed to protect investors from the effects of inflation.

Series i US Savings Bonds (i bonds) were the Us Savings Bonds introduced in 1998, and are intended for investors seeking to protect the purchasing power of their capital while earning a guaranteed real interest rate of return.

Interest on Series I Bonds

Interest on Series I Bonds accrues monthly and is paid when the Series I savings bond is redeemed, in which year the total interest earned on the savings bond is included in the investor’s taxable income.

The interest rate on Series I Bonds includes:

(i) a fixed rate of return, which is announced by the Treasury Department each May and November and remains the same throughout the life of any Series I Savings Bond purchased during that six month period; and

(ii) a variable semiannual inflation rate, which is also announced each May and November and which is based on changes in the non-seasonally adjusted Consumer Price Index for all Urban Consumers(CPI-U).

The semiannual inflation rate is combined with the fixed rate of the Series I Savings Bond to determine the bond’ s total interest payment for each six month period; interest is compounded semiannually.

In physical form Series I Savings Bonds are sold at face value in denominations of $50, $75, $100, $200, $500, $1,000, $5,000, and $10,000. In electronic form, the Series I Bonds are available in the same denominations.

Series I Savings Bonds can earn interest for up to 30 years (depending on the investor’s decision as to when to redeem the Series I Bonds), and investors are limited to purchasing up to $30,000 principal amount of Series I Bonds per calendar year per person.

Series I Savings Bonds must be held for a minimum of one year; bonds redeemed within the first five years from the date of purchase incur a three month interest penalty.

The interest on Series I Savings Bonds is exempt from state and local income taxes.