I Savings Bonds In Depth
As of January 1, 2012, paper savings bonds are no longer sold at financial institutions. This action supports Treasury’s goal to increase the number of electronic transactions with citizens and businesses. See the press release.
I Bonds are a low-risk, liquid savings product. While you own them they earn interest and protect you from inflation. Once sold and redeemed solely as a paper security, they’re now also available in electronic form and in paper form through your IRS tax refund. As a TreasuryDirect account holder, you can buy, manage, and redeem I Bonds online.
A new program called SmartExchangeSM allows TreasuryDirect account owners to convert their Series E, EE, and I paper savings bonds to electronic securities in a special Conversion Linked Account within their online account.
Buying I Bonds through TreasuryDirect:
- Sold at face value; you pay $50 for a $50 bond.
- Purchased in amounts of $25 or more, to the penny.
- $10,000 maximum purchase in one calendar year.
- Issued electronically to your designated account.
Buying Paper I Bonds:
- Available only through your IRS tax refund
- Sold at face value; i.e., you pay $50 for a $50 bond.
- Purchased in denominations of $50, $75, $100, $200, $500, $1,000, and $5,000.
- $5,000 maximum purchase in one calendar year.
- Issued as paper bond certificates.
If you redeem I Bonds within the first 5 years, you'll forfeit the 3 most recent months' interest; after 5 years, you won't be penalized.
