What is an I Bond?

We have gotten a number of questions regarding Series I Savings Bonds: what are they and how can they be purchased?  While these bonds are not available to us directly through our custodian TD Ameritrade, they are available through US Treasury Direct at www.treasurydirect.gov.  

What is an I Bond?

• It is a bond issued directly from the US Treasury.
• The current initial interest rate is 9.62% per year as of August 2022.  You may buy the bond at that rate through October of 2022, and the term is 6 months.
• The interest compounds every 6 months, and is a function of the fixed rate of return, and the inflation rate at the time.
• You can purchase a maximum of $10,000 per year per person, with a minimum purchase of $25.
• The Treasury resets the rates every May 1, and every November 1.
• The purchase can be made at www.treasurydirect.gov after an account is created.  
• The interest is taxable at the Federal level, but not at the state level.
• The bond may be cashed after holding it one year, but if you cash the bond in before you’ve held it for 5 years, you will pay a penalty equal to 3 months of interest.

It is important to note that I Bonds cannot be used in a Traditional or Roth IRA account, a 401(k), 403(b) or a brokerage account. If we can be of service to you and your family, please don’t hesitate to reach out to us.  

The commentary is informational in nature and not intended to imply a specific strategy or course of action. Investment advice and recommendations are only provided according to each individual’s personal circumstances. Chancellor Wealth Management is an investment advisor firm registered pursuant to the laws of the state of Georgia. The firm is also registered to conduct business in the states of South Carolina and Texas.  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.  Copyright © 2022 Chancellor Wealth Management, All rights reserved.