That means, you can give paper savings bonds to yourself or to anyone else (as a gift). If you have enough money in your refund, you can buy multiple bonds and, if you wish, you can give them multiple registrations. You may buy up to $5,000 in paper savings bonds with each year's tax refund.
Savings bonds can be transferred to new owners without probate if they were jointly owned or if the owner named a payable-on-death (POD) beneficiary to inherit them. These bonds can be jointly owned, or they can be registered in POD form, but not both; only sole owners can designate a POD beneficiary.
“I bonds can be purchased for just about anyone,” says Michael Ryan, a financial coach. “You can buy them for yourself, for your children or for someone else as a gift.”
How much can one person or entity own in savings bonds? There is no limit on the total amount that any person or entity can own in savings bonds.
You can request up to three different savings bond registrations – for yourself and spouse, if married and filing a joint return, or someone other than yourself. If you order bonds for yourself and spouse, the bonds will be issued in the names shown on the return.
$10,000 limit: Up to $10,000 of I bonds can be purchased, per person (or entity), per year. A married couple can each purchase $10,000 per year ($20,000 per year total).
“The $10,000 limit is per entity, not per person,” says Parker. “You can have as many entities as you want.” That is, if you have a business, that business can also purchase Series I bonds up to the $10,000 annual limit.
I Bond Cons
The initial rate is only guaranteed for the first six months of ownership. After that, the rate can fall, even to zero. One-year lockup. You can't get your money back at all the first year, so you shouldn't invest any funds you'll absolutely need anytime soon.
inflation rate can vary. You can count on a Series I bond to hold its value; that is, the bond's redemption value will not decline.
You can cash in (redeem) your I bond after 12 months. However, if you cash in the bond in less than 5 years, you lose the last 3 months of interest.
Two owners co-own the bond. If one owner dies, the other becomes the single or sole owner. Neither owner can be an entity. The first-named owner is the primary owner.
While each individual can purchase only $10,000 in I bonds for themselves per year, you can buy multiple I bonds as gifts for others. There's a $10,000 maximum per recipient for each purchase, but there's no limit to how many recipients you have and no limit on how often you can buy bonds for the same recipient.
In theory, one could purchase more than $10,000 in I bonds as a gift this month for the same person. Just keep in mind that one cannot deliver more than $10,000 a year in I bonds to the recipient, and that assumes they haven't purchased I bonds on their own.
The limit for purchasing I bonds is per person, so a married couple can each put up to $10,000 in the investment annually, or up to $15,000 each if they both also elect to get tax refunds in paper I bonds. Families with kids can also invest up to the annual limit on behalf of each child.
Enter the TreasuryDirect website. Create a TreasuryDirect account and then log in. Purchase the savings bond you want in the desired denomination ($25 to $10,000). After the mandatory five-business-day holding period ends, deliver the gift to the recipient's TreasuryDirect account.
Can I Bonds lose value? No, I Bonds can't lose value. The interest rate cannot go below zero and the redemption value of your I bonds can't decline.
The biggest red flag for short-term investors: You can't redeem these bonds for a year after you purchase them, and you'll owe a penalty equal to three months' interest if you cash out any time over the first five years of owning the bond.
Call risk is the likelihood that a bond's term will be cut short by the issuer if interest rates fall. Default risk is the chance that the issuer will be unable to meet its financial obligations. Inflation risk is the possibility that inflation will erode the value of a fixed-price bond issue.
I bonds protect you from inflation because when inflation increases, the combined rate increases. Because inflation can go up or down, we can have deflation (the opposite of inflation). Deflation can bring the combined rate down below the fixed rate (as long as the fixed rate itself is not zero).
I bonds have never been popular due to low interest and low inflation rates. However, inflation has increased, making these safe bonds more attractive. The cap at $10,000 and the annual interest of $689 might not be worth the hassle of owning and keeping up with a separate account.
I bonds can be excellent options for retirees to build up the conservative bucket of their retirement income plan. As low-risk investments, they are a way for risk-averse investors to beat inflation without putting more resources into the stock market.
Inflation sucks, but there is one upside: It's still a great time to buy a government-backed I bond. Series I savings bonds are conservative, safe investments that rise and fall with inflation, and they're earning far more than the best high-yield savings account or certificate of deposit.
Note: The three purchase limits above apply separately. That is, in a single calendar year you could buy $10,000 in electronic Series EE bonds, $10,000 in electronic Series I bonds, and $5,000 in paper Series I bonds.
Quick Bites. You can buy inflation-protected Series I bonds in a child's name. The amount you can purchase electronically for anyone, including a child, is capped at $10,000 per person, per calendar year.
Series I savings bonds — commonly known as I-bonds — currently offer an interest rate of 6.89%. While that's lower than the 9.62% they offered during the six months that ended November 1, it's still an attractive rate for savers who would otherwise be putting money into a savings account or CD.