I Bond Info

July 27, 2022
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Questions about US Government I bonds have been coming up recently during our client meetings about whether these investments are right for you.  The answer to that question is they may NOT be right for everyone so let’s first discuss what a US Government I bond is and how it works.    An I bond is a variable rate bond which means it earns interest based on two factors combining both a fixed rate (which has historically been under 1%) and an inflation rate.  As a lot of us have seen in the news and media the current rate is north of 9% but it is important to remember you will not get this rate every year because this rate will vary; it is not guaranteed. 

Every six months from the bond's issue date, interest the bond earned in the six previous months is added to the bond's principal value, creating a new principal value. Interest is then earned on the new principal.  In addition to the fixed rate that you get at the time you buy the bond, the Inflation rate can fluctuate.

The inflation rate is set every six months (on the first business day of May and on the first business day of November), based on changes in the non-seasonally adjusted Consumer Price Index for all Urban Consumers (CPI-U) for all items, including food and energy.

However, the change is applied to your bond every six months from the bond's issue date.

Some other important facts are you cannot cash your I bond in the first 12 months; they are intended to be longer term investments.  If you redeem the bond within the first 5 years you will lose your last 3 month’s interest.  

If you have any questions on your individual situation or with the article I have enclosed, please feel free to reach out to our Advisory Team for a further discussion.


With inflation hovering near 40-year highs, some investors are looking for alternative ways to weather the storm. For many, a Series I Savings Bond is just the ticket. I Bonds give investors a rate of return plus inflation protection and are backed by the U.S. government.

I Bonds are pretty simple to set up. You can go to TreasuryDirect.gov and open a free account to purchase these federally-backed securities directly from the U.S. Treasury.1

Here’s how to get started.

1. Gather your info. Make sure you have the following close at hand: your taxpayer identification number, current address, checking or savings account information, and email address.

2. Go to Treasurydirect.gov's account creation page. Navigate to the bottom of the page and select “Apply Now” on the left. This will begin your account creation journey. Next, you will choose between an Individual or Entity account. Select Individual account type (it’s the default option) and click “Submit.”

3. Enter your info. Using the information gathered in step 1, fill in the fields requested and check the box at the bottom to certify your Taxpayer Identification Number. Click “Submit.”

4. Select a personalized image. Take some time here to select an image and caption you will remember. Think of this as a visual password for your account. Click “Submit.”

5. Secure your account. Select your password and security questions on this screen. Make sure the answers to your security questions are impossible to guess but easy to remember. Click “Submit” to move to the final step.

6. Check your email. Finally, look for your TreasuryDirect account number in your email. You’ll need this to log into your account later.2

You can begin purchasing I Bonds now that you’ve created your account. Here are a few things to keep in mind. I Bonds earn interest for 30 years unless you cash them in. You can do this after a year has passed from the time of purchase, but you'll lose the previous three months of interest. However, there is no penalty if you let them mature for five years or more. The maximum amount you can invest is $10,000 total per calendar year.3

1. Treasurydirect.gov, 2022

2. Treasurydirect.gov, 2022

3. Treasurydirect.gov, 2022

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.