The good news is that there is a very liquid market when it comes to I bonds. This means you can sell them quickly and easily. If you have electronic I bonds, simply go to your TreasuryDirect account, go to ManageDirect, and use the link for cashing a bond.
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.
You cannot cash them. You can only cash bonds that you own or co-own unless you have legal evidence or other documentation that we accept to show you are entitled to cash the bond.
Cashing in a savings bond (Series EE or Series I) is relatively easy. But you can't cash one in until you've had it for at least one year. And if you cash it in before it's 5 years old, there's a penalty.
However, if a bond is cashed within the first five years after its issue date, interest earned during the three months prior to cashing will be forfeited. Once a Series I bond is five years old, there is no interest penalty for redemption.
Key Points. Pros: I bonds come with a high interest rate during inflationary periods, they're low-risk, and they help protect against inflation. Cons: Rates are variable, there's a lockup period and early withdrawal penalty, and there's a limit to how much you can invest.
The May 2023 I Bond inflation rate is announced at 3.38%* based on the March 2023 CPI-U data.
Banks and credit unions can redeem savings bonds over the counter.
May 1, 2023. Series EE savings bonds issued May 2023 through October 2023 will earn an annual fixed rate of 2.50% and Series I savings bonds will earn a composite rate of 4.30%, a portion of which is indexed to inflation every six months. The EE bond fixed rate applies to a bond's 20-year original maturity.
I bonds: A low-risk investing strategy
Because I bonds are backed by the U.S. government they carry very little risk. Plus, you'll have the added bonus of protecting your cash's purchasing power.
In any one calendar year, you may buy up to $10,000 in Series EE electronic savings bonds AND up to $10,000 in Series I electronic savings bonds for yourself as owner of the bonds. That is in addition to the amount you can spend on buying savings bonds for a child or as gifts.
A given Social Security Number or Employer Identification Number can buy up to these amounts in savings bonds each calendar year: $10,000 in electronic EE bonds. $10,000 in electronic I bonds.
Series I bonds are sold at face value and mature after 30 years. Interest is added monthly to the bond's value.
Interest on I bonds is exempt from state and local income taxes and, if you qualify, from federal income tax when used to pay for higher education. You can buy up to $10,000 in electronic I bonds per person in a calendar year, with an online account at TreasuryDirect.gov.
In addition to the interest for the year you are now reporting, you must also report all interest those bonds earned in the years before you changed.
SERIES I BONDS ISSUED SEPTEMBER 1998 AND THEREAFTER All Series I bonds reach final maturity 30 years from issue. Series I savings bonds earn interest through application of a composite rate.
You can sell back your electronic I bonds through the TreasuryDirect site. Selling I bonds before five years will result in losing the last three months of earned interest. You can try cashing in your bonds through your local bank, but not all institutions offer the service.
With rising federal funds rates comes an increase in savings interest rates. Federal Reserve Board members and Federal Reserve Bank presidents predict the federal funds rate will reach between 3.9% and 4.9% in 2023.
TreasuryDirect.gov is the one and only place to electronically buy and redeem U.S. Savings Bonds.
How to cash in Series I savings bonds. Paper Series I savings bonds: You may be able to cash these bonds in at your bank if it provides that service. You can also cash them in by mail through TreasuryDirect.gov. Complete FS Form 1522 and mail your bonds with the form to the address provided.
Get a certified copy of the death certificate for everyone who has died who is named on any of the bonds. Have each person who is entitled to a distributed bond also fill out and sign the appropriate forms: If they want cash for their bond: FS Form 1522.
EE Bond and I Bond Differences
The interest rate on EE bonds is fixed for at least the first 20 years, while I bonds offer rates that are adjusted twice a year to protect from inflation. EE bonds offer a guaranteed return that doubles your investment if held for 20 years. There is no guaranteed return with I bonds.
Key Points. The variable rate on I bonds will drop in May. Those who want short-term returns might prefer to buy I bonds in April to lock in higher rates. Long-term investors might be better served by waiting.