Q: What should I know about I bonds?

A: We get many questions about I Bonds these days. We think they can be a good choice for excess savings. For example, for those who have more cash than they “need,” I Bonds are a low-risk product that can provide some inflation relief. There are a few things to keep in mind:
  • Purchases are limited to $10,000 per taxpayer each calendar year.
  • You must buy them directly from the U.S. Treasury, at TreasuryDirect.
  • To receive the full interest accrued, they must be held for at least 5 years, otherwise you lose the last 3 months of interest. They will pay interest for 30 years from issue.
  • The interest rate they pay is adjusted every 6 months, and sometimes will provide a less favorable return than other investments.