savings bonds

Series I Savings Bonds

Current Int. Rate for I Bonds purchased Nov 1, 2018 to Apr 30, 2019: 2.83% [Rate Breakdown | Fixed: 0.50% | Variable: 2.33%]

Series I Savings Bond Earning Interest Again

Effective May 1st, 2012, Series I Bonds earn interest at the annual rate of 2.20% (see breakout). Also, older I Bonds earn interest at a "Blended Rate".

Why does this rate apply to ALL I Bond holders? The greatest fixed rate of any I Bond ever issued is 3.6%, others have less (see the I Bond fixed rate chart below). Let's say the current variable rate is -5.56%. Adding the fixed and the variable rate of the best fixed rate earning I bond you would normally get -1.96%. Due to the special rules of I Bonds that state no bond will ever lose value, the lowest rate an I Savings Bond can ever have is 0%.

Read our explaination of what happens when inflation reaches 0%, or it become deflation!

See the official Government press release [Click here]

History of the I Savings Bond

The I Savings Bond program was started on September 1st, 1998. The main purpose behind these new 'I' bonds was to protect the bond owner/investor from inflation. I Savings Bond rates are announced every May 1st and November 1st. If that day falls on a non-working day, rates are announced on the next working day. The following information topics are the major features associated with the Series I Savings Bonds.

Buying Paper Series I Savings Bonds

EFFECTIVE: 1/1/2012  You can no longer purchase paper I Savings Bonds at a local bank, financial institution or credit union. As of 1/1/2012, the Treasury Department started issuing electronic savings bonds only. Note: The Treasury Dept. will issue electronic savings bonds if you are Replacing Lost Bonds or Changing a Beneficiary/Co-Owner Name. See the current savings bond rates for bonds available for purchase.

Once the Treasury Department stopped selling savings bonds through over-the-counter channels, it effectively ended the paper savings bond program, but with one exception. In 2010, a new Tax Time Bond Program was announced allowing tax filers to purchase paper Series I savings bonds with their tax refunds. That option will still be available. For more information, click here.

The following paper Series I Savings Bond denominations are available for purchase (using tax refunds): $50, $75, $100, $200, $500, $1,000 and $5,000. Paper Series I Savings Bonds are purchased at face value. For example: A face-value $100 paper I bond is purchased for $100.

The minimum purchase of a paper I Savings Bond is $50; The maximum purchase of paper I Savings Bonds annually, per calendar year, is $5,000.

Buying Electronic Series I Savings Bonds

Purchased in amounts of $25 or more (examples: $50, $75, $100, $200, $500, $1,000 and $5,000). Electronic Series I Savings Bonds are purchased at face value. For example: A face-value $100 electronic I bond is purchased for $100.

The minimum purchase of an electronic I Savings Bond is $25; The maximum purchase of electronic I Savings Bonds annually, per calendar year, is $10,000.

Maturity Rules for Series I Savings Bonds

All Series I Savings Bonds have a final maturity (stop earning interest) of 30 years from the issue date on the bond. All I Savings Bonds post their final maturity interest on the first day of the final maturity month.

Cashing in a Series I Savings Bond

I Savings Bonds must be at least 1 year old before they are eligible for cash-in.

There is a 3 month penalty for cashing in an I Bond before it is five years old. For example, if you buy a bond and redeem it 24 months later, you'll get back your original investment and 21 months of interest. The value of the bonds would be based on the announced rates applied over the initial 21-month period.

To cash-in an I Savings Bond, simply bring it down to your local bank. Be sure to call first, some banks do not handle the cashing in of US Savings Bonds.

Only in times of a Federal Disaster being declared, can a Savings Bond be cashed-in before 1 year - however, the three-month penalty for cash-in prior to 5 years still applies.

MAKE SURE YOU KNOW WHAT YOUR BONDS ARE WORTH BEFORE CASHING IN! has saved Savings Bond investors like yourself hundreds of dollars at cash-in because the bank calculated the wrong value for their bonds. Use our Savings Bond Calculator to find out exactly what your bonds are worth before you cash them in!

Interest Rate Rules

I bonds earn interest from the first day of their issue month. You can redeem them at any time after a 12-month holding period. They are an accrual-type security.

They increase in value monthly and the interest is paid when you redeem the bond. I bonds are sold at face value; i.e., you pay $100 for a $100 I bond. I bonds grow in value with inflation-indexed earnings for up to 30 years.

Interest is posted on the 1st of the month.

Interest Rate Calculations

The Series I Savings Bond earnings rate is a combination of two separate rates; a fixed rate and an inflation rate.

The I Bond Fixed Rate:The I Bond Inflation (variable) Rate:
Announced each May 1st and November 1stAnnounced each May 1st and November 1st
Applies to all bonds issued during the six months period beginning with the announcement date.Based on changes in the Consumer Price Indes for all Urban Consumers (CPI-U).
Remains the same for the life of the bond.Changes every 6 month anniversary to the new variable rate set in the most recent month of May or November. The variable rate is then combined with the fixed rate to determine the earning rate of the bond for the next six months.
How the I Savings Bond Rate is Calculated:

Fixed rates and semiannual inflation rates are combined to determine composite earnings rates. An I bond's composite earnings rate changes every six months after its issue date. For example, the earnings rate for an I bond issued in March 2000 changes every March and September.

Here's how the composite rate for I Savings Bonds issued Nov 1, 2018 thru Apr 30, 2019 is set:

Fixed Rate: 0.50%
Semiannual inflation rate = 1.16%

Composite rate = [Fixed rate + (2 x Semiannual inflation rate) + (Fixed rate x Semiannual inflation rate)]
Composite rate = [0.0050 + (2 x 0.0116) + (0.0050 x 0.0116)]
Composite rate = 2.83%

I Bond Calculator - Current Values of I Bonds Online savings bonds

Looking for values of US Savings Bonds? Use our Savings Bond Calculator to value your savings bonds online right now. Its free and helpful!

What If the Variable Rate Drops to Zero (or Deflation occurs)

If the variable rate of I Savings Bonds drops to zero or below, the fixed rate off-sets the negative until it hits zero.

An I Savings Bond is guaranteed to never drop below zero and will never lose interest or value.

An Example of a Zero Variable Rate: Let us suppose the I Savings Bond you own has a fixed rate of 1.5%, and the current variable rate is 0%. In this senario, your I Bond will earn 1.5%.

An Example of a Negative (deflation) Variable Rate: Let us suppose the I Savings Bond you own has a fixed rate of 1.5%, and the current variable rate is -2%, or that there has been deflation over the last 6-month period. In this senario, your I Bond will earn 0%, (not -0.5%! I Bonds never drop below 0%!).

Second Example of a Negative (deflation) Variable Rate: Let us suppose the I Savings Bond you own has a fixed rate of 1.5%, and the current variable rate is -0.5%, deflation over the last 6-month period. In this senario, your I Bond will earn 1%.

Past I Bond Fixed Rates

The following is a list of fixed rates for I bonds and their issue periods.

Issue PeriodFixed Rate
5/1998 - 10/19983.4%
11/1998 - 04/19993.3%
5/1999 - 10/19993.3%
11/1999 - 04/20003.4%
5/2000 - 10/20003.6%
11/2000 - 04/20013.4%
5/2001 - 10/20013.0%
11/2001 - 04/20022.0%
5/2002 - 10/20022.0%
11/2002 - 04/20031.6%
5/2003 - 10/20031.1%
11/2003 - 04/20041.1%
5/2004 - 10/20041.0%
11/2004 - 04/20051.0%
5/2005 - 10/20051.2%
11/2005 - 04/20061.0%
5/2006 - 10/20061.4%
11/2006 - 04/20071.4%
5/2007 - 10/20071.3%
11/2007 - 04/20081.2%
5/2008 - 10/20080.0%
11/2008 - 04/20090.7%
5/2009 - 10/20090.1%
11/2009 - 04/20100.3%
5/2010 - 10/20100.2%
11/2010 - 04/20110.0%
5/2011 - 10/20110.0%
11/2011 - 04/20120.0%
5/2012 - 10/20120.0%
11/2012 - 04/20130.0%
5/2013 - 10/20130.0%
11/2013 - 04/20140.2%
5/2014 - 10/20140.1%
11/2014 - 04/20150.0%
5/2015 - 10/20150.0%
11/2015 - 04/20160.1%
5/2016 - 10/20160.1%
11/2016 - 04/20170.0%
5/2017 - 10/20170.0%
11/2017 - 04/20180.1%
5/2018 - 10/20180.3%
11/2018 - 04/20190.5%

Who can Own I Savings Bonds?

Individuals, corporations, associations, public or private organizations, and fiduciaries can own paper Series I Savings Bonds.

You can own U.S. Savings Bonds if you have a Social Security Number and you're a:

  • Resident of the United States.
  • Citizen of the United States living abroad (must have U.S. address of record).
  • Civilian employee of the United States regardless of residence.
  • Minor. Unlike other securities, minors may own U.S. Savings Bonds.

Tax Rules and Advantages

The interest earned on your savings bonds is subject to federal income tax, which can be deferred until redemption, final maturity, or other taxable disposition, whichever occurs first. Savings bonds are subject to estate, inheritance, gift or other excise taxes, whether federal or state. I bonds are subject to all federal taxes imposed under the IRS code of 1986, as amended.

You have the choice of reporting interest earned on savings bonds in several ways. Whenever you report savings bonds interest, it should be included with other interest income on your federal income tax return.

Cash basis reporting - Federal tax is deferred until the year of final maturity, redemption, or other taxable disposition, whichever occurs first.

Accural basis reporting - You report interest annually each year as it accrues. Once you start, you must continue to report interest earned annually for all savings bonds and notes you own and any you may acquire. This may be advantageous for I bonds in a child's name.

Using Savings Bonds Tax-Free for Education

Special tax benefits are available to qualified owners of I Savings Bonds under the Education Savings Bond Program. For more information on this program visit our page on the Tax-Free Savings Bonds for Education Program.

What does an I Bond look like?

Other persons found on the I bond include:

  • Marian Anderson
  • Albert Einstein
  • Helen Keller
  • General George C. Marshall
  • Dr. Hector P. Garcia
  • Dr. Martin Luther King, Jr.
  • Spark M. Matsunaga
  • Chief Joseph


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