by Kevin Janiec CFP®, MBA
You have likely heard plenty about the current inflationary environment.
However, you might not have heard much about Series I Savings Bonds (I bonds).
Here’s a timely FYI on what I Bonds are and how they work:
- I bonds are an inflation-protected, interest-bearing savings instrument that can be purchased directly through the US Treasury.
- The yield is calculated and compounded semi-annually in May and November based on a fixed rate and inflation metric (CPI). Current rates on these vehicles are available at gov.
- There is a $10,000 purchase limit per person (children included) in each household on an annual basis. These investments can be purchased through an individual account at gov.
- There is a 1-year mandatory holding period. To redeem these bonds in less than 5 years, you pay a penalty of the previous 3 months’ interest. After 5 years, you can redeem the bonds penalty-free.
- You cannot purchase these investments within an IRA, 401(k), or joint account.
Additional Frequently Asked Questions are available at TreasuryDirect.gov.
As we meet in the coming months, we can discuss Series I Bonds further. In the meantime, if you have any questions, don’t hesitate to reach out.
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