Series I Savings Bonds
Current Int. Rate for I Bonds purchased May 1, 2015 to Oct 31, 2015: 0.00% [Rate Breakdown | Fixed: 0.00% | Variable: 0.00% ]
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%.
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! Savingsbonds.com 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.Source: www.savingsbonds.com