Charlie MarlowAre you looking for a savings tool or investment that will outpace inflation regardless of what the stock market and economy do? Are you looking to avoid the ups and downs of the market? Is the safety of your principal important to you? If you answered yes to any of these questions, Series I Savings Bonds may be right for you.
Series I Bonds are U. S. government savings bonds that pay a guaranteed interest rate equal to the rate of inflation and are updated every six months. I bonds currently pay the inflation-adjusted rate of interest (resets every 6 months) PLUS a fixed rate for a total that is a nice percent of growth. Here’s the good news, that fixed rate will continue to be added to the inflation rate for as long as you own your bonds for up to 30 years, guaranteeing your savings will stay ahead of inflation. You must purchase your bonds before the current 6 month timing as the fixed rate on new bonds may change after that current 6 month period!
Bond Facts:
- Your bond’s interest rate will adjust every six months after purchase and will earn the prevailing rate plus the fixed rate in effect when you buy your bond.
- Federal taxes on savings bond interest may be deferred until redemption and are not subject to state or local income taxes.
- I bonds may be electronically purchased for any amount between $25.00 and $10,000. There is a $10,000 annual limit per taxpayer. Interest can be tax-free if used for qualified educational expenses.
- I bonds may not be redeemed during the first 12 months, and there is a three-month interest penalty if redeemed during the first five years.
- As of January 1, 2025, I bonds are ONLY available electronically and they can be purchased in your TreasuryDirect account.
If you are considering Series I Savings Bonds, make sure to read up on all of the requirements, limits, and rates. They may be a good fit for your financial goals, so check it out!
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