I bonds — TreasuryDirect (2024)

Electronic or paper? You can buy electronic I bonds in your TreasuryDirect account. You can buy paper I bonds with your IRS tax refund. How does an I bond earn interest?

I savings bonds earn interest monthly. Interest is compounded semiannually, meaning that every 6 months we apply the bond’s interest rate to a new principal value. The new principal is the sum of the prior principal and the interest earned in the previous 6 months.

Thus, your bond's value grows both because it earns interest and because the principal value gets bigger.

We list interest rates for all I bonds ever issued in 2 ways:

How long does an I bond earn interest? 30 years (unless you cash it before then) When do I get the interest on my I bond?

With a Series I savings bond, you wait to get all the money until you cash in the bond.

Electronic I bonds: We pay automatically when the bond matures (if you haven’t cashed it before then).

Paper I bonds: You must submit the paper bond to cash it.

See Cash in (redeem) an EE or I savings bond.

Can I cash it in before 30 years?

You can cash in (redeem) your I bond after 12 months.

However, if you cash in the bond in less than 5 years, you lose the last 3 months of interest. For example, if you cash in the bond after 18 months, you get the first 15 months of interest. See Cash in (redeem) an EE or I savings bond.

How do I find the value of my Series I savings bond?

If you have a Series I electronic bond, you can see what it is worth in your TreasuryDirect account.

To see what your paper Series I bond is worth, use our Savings Bond Calculator.

Must I pay tax on what the bond earns?

Federal income tax: Yes

State and local income tax: No

Federal estate, gift, and excise taxes; state estate or inheritance taxes: Yes

You choose whether to report each year's earnings or wait to report all the earnings when you get the money for the bond.

If you use the money for qualified higher education expenses, you may not have to pay tax on the earnings.

See more in

Tax information for EE and I savings bonds

Using savings bonds for higher education

How much does an I bond cost? Electronic I bonds: $25 minimum or any amount above that to the penny. For example, you could buy an I bond for $36.73.

Paper I bonds: $50, $100, $200, $500, or $1,000

Is there a maximum amount I can buy? 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)

For individual accounts, the limits apply to the Social Security Number of the first-named in the registration.

I bonds — TreasuryDirect (2024)


Is there a downside to I bond? ›

The cons of investing in I-bonds

There's actually a limit on how much you can invest in I-bonds per year. The annual maximum in purchases is $10,000 worth of electronic I-bonds, although in some cases, you may be able to purchase an additional $5,000 worth of paper I-bonds using your tax refund.

Can I buy $10,000 I bond every year? ›

That said, there is a $10,000 limit each year for purchasing them. There are several 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.

What is the current rate for TreasuryDirect I bonds? ›

The composite rate for I bonds issued from November 2023 through April 2024 is 5.27%.

How long do you have to hold I bonds? ›

You can cash in (redeem) your I bond after 12 months. However, if you cash in the bond in less than 5 years, you lose the last 3 months of interest. For example, if you cash in the bond after 18 months, you get the first 15 months of interest.

What happens to I bonds if inflation goes down? ›

If inflation runs hotter, the rate can go up. If inflation cools off, the rate can go down. The fixed rate portion of an I Bond remains with the life of the bond. The fixed rate is 1.3% for I Bonds issued from November 2023 through April.

What is a better investment than I bonds? ›

Bottom line. If inflation and investment safety are your chief concerns — TIPS and I-bonds deliver both. TIPS offer greater liquidity and the higher yearly limit allows you to stash far more cash in TIPS than I-bonds.

What is the loophole for series I bonds? ›

Normally, you're limited to purchasing $10,000 per person on electronic Series I bonds per year. However, the government allows those with a federal tax refund to invest up to $5,000 of that refund into paper I bonds. So most investors think their annual investment tops out at $15,000 – one of the key I bond myths.

Do you pay taxes on I bonds? ›

More about savings bonds

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.

How much is a $100 savings bond worth after 20 years? ›

How to get the most value from your savings bonds
Face ValuePurchase Amount20-Year Value (Purchased May 2000)
$50 Bond$100$109.52
$100 Bond$200$219.04
$500 Bond$400$547.60
$1,000 Bond$800$1,095.20

What will the next I bond rate be in 2024? ›

The April 2024 I Bond Inflation Rate is 3.94%

The current April 2024 I Bond inflation rate is 3.94%. Any I Bonds that renew during November 2023 – April 2024 will get that inflation rate added to the fixed rate. The next I Bond inflation rate will be 2.96%.

What day of the month do I bonds pay interest? ›

§ 359.16 When does interest accrue on Series I savings bonds? (a) Interest, if any, accrues on the first day of each month; that is, we add the interest earned on a bond during any given month to its value at the beginning of the following month.

Can you buy I bonds at a bank? ›

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.

Can you cash out an I bond at any time? ›

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.

How often is interest paid on I bonds? ›

Your I Bonds will never be worth less than you invested. The bond will increase in value every six months when interest earned is added to your account value.

How do I cash in my I bonds? ›

You can sell back your electronic I bonds through the TreasuryDirect site. Selling I bonds before five years will result in losing the last three months of earned interest. You can try cashing in your bonds through your local bank, but not all institutions offer the service.

What are the disadvantages of TreasuryDirect? ›

Securities purchased through TreasuryDirect cannot be sold in the secondary market before they mature. This lack of liquidity could be a disadvantage for investors who may need to access their investment capital before the securities' maturity.

Is an I bond a good idea right now? ›

I bonds' rates have since dipped from their headline-grabbing heights—they were as high as 9.62% in May of 2022—to 5.27% for the current crop. That rate may still look attractive, but I bonds' variable rates—combined with their five-year lockup period—may give you pause.

Are I bonds a good investment in 2024? ›

Some experts predict the new rate could drop to around 4.27% based on inflation and other factors. But there's still a chance to lock in six months of the 5.27% yearly rate for new I bonds before May 1, assuming you haven't exceeded the purchase limit for 2024.

Should I take my money out of I bonds? ›

You'll likely want to time your cash-out for three months after your I-Bond's reset date so that the three months' interest you lose are of the new lower rate, not the higher rate you were happier with. To accomplish that, you should hold your I-Bond for at least 15 months.

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