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E
BONDS | EE BONDS | I
BONDS | HH BONDS | OLDER BONDS
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Denominations Available: $50 , $75 , $100 ,
$200 , $500 , $1,000 , $5,000 and $10,000.
(NOTE
- May 1999 the $200 and $10,000 bonds were issued).
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Issued: September 1998 to Present.
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Purchased for Face Value but accumulate interest
calculated monthly, compounded semi-annually for 30 years. For the current rates on I
Bonds please see our rates page here.
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Series I bonds are issued only in registered form
and are not transferable. The bonds may be either in book-entry or definitive form.
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You can purchase up to $5,000 worth of I Bonds annually (each calendar year). NOTE: You can purchase up to $5,000 in EE Bonds as well, totaling $10,000 max annually in paper bonds as of January 1, 2008. An individual may also purchase $5,000 in ELECTRONIC EE Bonds as well as an additional $5,000 in ELECTRONIC I bonds; for a grand total of $20,000 in savings bonds per calendar year. This number is down from the limit of $60,000, prior to January 1, 2008.
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I Bonds are an accural type security interest
is added to the bond monthly, and paid when a bond is redeemed (cashed).
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Can be purchased at most local financial
institutions, or payroll savings plans. (ie: banks, credit unions and the internet
- you can even purchase bonds online here!)
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You cannot exchange I Bonds for HH Bonds.
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You cannot exchange EE Bonds for I Bonds.
(You CAN cash in your EE bonds and use the money to purchase I Bonds, however, the
interest earned on the EE Bonds must be reported on your Federal Income Tax return in the
year you cash the bonds.)
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There
is a 3 month penalty for cashing in an I Bond before it is five years old.
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What does an I Bond look like?
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SavingsBonds.com Inc. HELPFUL FACT:
On September 1, 1998, the US Treasury Department began issuing Series I Savings Bonds. The
main purpose behind these new "I" bonds is to protect the bond owner (investor)
from inflation. Since high rates of inflation are not a problem today, the need for
inflation protection is not fully appreciated by most potential savings bond purchasers.
The following are the major features associated with the new I Series bonds. Where
appropriate, comparisons have been made to the Series EE bonds, (which have been issued since January, 1980), and
will still be available for purchase under the same rules as before.
 Interest rate:
The government establishes fixed interest rates for Series I bonds
every May and November a 6-month period beginning on May 1 or November 1. The government
has reserved the right to establish and announce a fixed rate at other times for periods
other than six months. Also, once fixed for a specific bond, the interest rate applies for
the life of the bond.
Visit our rates page for the current interest
rates.
History:
The government began selling Series I bonds on September 1, 1998. The
bonds broaden the types of securities that are available to investors and offer new ways
to acquire income and secure the purchase value of the investment.
Composite rate:
Series I bonds accrue earnings based on a combination of the fixed
interest rate and the semiannual inflation rate. This composite rate reflects the combined
effects of the fixed interest rate and the semiannual inflation rate. The government
announces the composite rate each May and November. Negative as well as positive changes
in the CPI-U are used to calculate composite rates. In the event of deflation, the
negative change in the CPI-U would reduce the composite rate. If deflation were such that
it more than fully offset the fixed rate of return and produced a negative composite rate,
the government would not reduce the composite rate below zero. In this event, the
redemption value of a Series I bond would remain constant through the period and become
the base for calculating earnings that might accrue during the subsequent period.
Earnings on a Series I bond, if any, accrue on the first day of each
month. The redemption value of a bond does not change between accrual dates. A Series I
bond may be redeemed beginning 12 months after issuance**. ** The minimum holding period for Series EE and Series I bonds has been extended from 6 months to 12 months, effective Feb 2003.
Redemption value calculations
will provide for monthly increases in bond values and will take into account a 3-month
loss of earnings for bonds redeemed less than five years from the issue date.
Inflation rate:
The government announces a variable semiannual inflation rate for
Series I bonds every May and November, or at any other date they determine. The government
uses the monthly non-seasonally adjusted U.S. City Average All Items Consumer Price
Index for All Urban Consumers (CPI-U) published by the Bureau of Labor Statistics of
the U.S. Department of Labor to determine the inflation rate. For example, the semiannual
inflation rate to be effective with a Treasury announcement in May of each year reflects
the rate of change in the CPI-U for the 6-month period ending with the immediately
preceding February, which is available from the BLS in March.
The CPI-U represents prices of all goods and services purchased
for consumption by urban households. User fees (such as water and sewer service) and sales
and excise taxes paid by the consumer are also included. Income taxes and investment items
(stocks, bonds, and life insurance) are not included. The CPI-U includes expenditures by
urban wage earners and clerical workers, professional, managerial, and technical workers,
the self-employed, short-term workers, the unemployed, retirees and others not in the
labor force.
Maturity:
Series I bonds have a maturity period of 30 years, consisting of an
original maturity period of 20 years and an automatic extension period of 10 years. The
bonds have an interest-paying life of 30 years after the date of issue and cease to
increase in value on that date.
Federal income taxation:
Earnings produced by the composite rate (i.e., the difference
between the face amount of a Series I bond and the redemption value) are treated as
interest for Federal income tax purposes. Owners may defer reporting the earnings for
Federal income tax purposes until: (1) they redeem the bonds; (2) the bonds cease to earn
interest after 30 years; or (3) the bonds are otherwise disposed of, whichever is earlier.
The deferral of reporting earnings (increase in value) will occur automatically, unless an
investor affirmatively elects to include the increase in value in income annually. An
investor who elects to report the earnings on a Series I bond annually must also report
earnings on other accrual-type obligations annually.
A bond owner or co-owner may be able to exclude from income
for Federal income tax purposes all or part of the earnings received on the redemption of
qualified savings bonds (including Series I and EE bonds) during
the year, if that owner or co-owner paid qualified higher education expenses during the
same year and certain other conditions are satisfied. This exclusion is known as the
Education Savings Bond Program. You may want to consult a tax advisor to determine your
eligibility for the Education Savings Bond Program.
Looking
for more specific information about I Bonds?
Please choose from our list of other topics:
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