US Savings Bonds

Posts Tagged ‘Series I Bonds’

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

What are Series I Bonds?

Series I Bonds, also called Series I Savings Bonds or Series I government bonds are also popular US Savings Bonds along with Series E and EE Savings Bonds. In the past, you can only purchase and invest in Series I Bonds in paper form. Nowadays, you can invest in the US government ’s Series I Bonds electronically.

How are Series I Bonds sold?

The US government ’s Series I Bonds are sold at face value. The maximum amount of Series I Bonds you can purchase in a year is currently $30,000

How to buy Series I Bonds?

Series I Bonds can be purchased in denominations of:

• $50,
• $75,
• $100,
• $200,
• $500,
• $1,000,
• $5,000, and
• $10,000.

Interest rates on I Bonds and redemption

The interest rates on I bonds are forfeited on the most recent 3 months’ interest if you buy the US Series I Bonds and then redeem them within 5 years. If you hold onto US Series I Savings Bonds for more than 5 years, there is no penalty on the interest on I bonds.

Series I Bonds are also popular investments even though they are not quite as popular as Series EE Bonds. In the past, only paper series I Bonds were sold but nowadays there are electronic series I Bonds, as there are electronic Series EE Savings Bonds. Below are some facts about series I Bonds. You can even convert your paper US Savings Bonds into electronic Savings Bonds quite easily if you qualify.

How much are series I Bonds?

Unlike Series EE Bonds that can be purchased at discount, series I Bonds are sold at face value even when sold in electronic form. Electronic series I Bonds, can be purchased for as little as $25 and as large as $5,000.

The maximum amount that you can purchase of series I Bonds is $5,000 in any calendar year.

How to buy series I Bonds?

You can buy series I Bonds in the same way you can buy Series EE Bonds.

How much are the interests of series I bonds?

What is most attractive about series i bonds is the fixed rate of return as well as the variable semiannual inflation rate that are combined. The variable rate of series i bonds is based on CPI-U for March and September.

Interest on series i bonds compound semiannually for 30 years, much like the Series EE Savings Bonds.