I Bonds: Insured Investments For Savvy Investors

I-bonds are a type of savings bond that protects your investment from inflation. They are government-backed investments that will protect your principal while earning interest. The interest rate is adjusted periodically to account for inflation, and it is based on a combination of a fixed rate and an inflation rate. I-bonds are not marketable securities and cannot be resold on the secondary market before maturity.

Explore related products

Money. Wealth. Life Insurance.: How the Wealthy Use Life Insurance as a Tax-Free Personal Bank to Supercharge Their Savings

$7.29 $8.95

Kulzer KU-66061411 Ibond Universal Bonding, Bottle Refill, 4Ml

$117.04

IBOND Universal Bottle Value Pack 3x4ml

$244.18

iBOND Total Etch Bottle Value Pack

$279

Kulzer KU-66061412 Ibond Universal Bonding, Bottle Valu Pack (Pack of 3)

$244.18

IBOND Universal Bottle Refill 1x4ml

$116.27

I bonds are insured against inflation

I bonds are a type of savings bond designed to protect your investment from inflation. They are issued by the US Treasury and are one of two types of savings bonds offered, the other being EE bonds. I bonds are government-backed investments that will protect your principal while earning interest.

The interest rate on I bonds is a combination of a fixed rate and an inflation rate. The fixed interest rate remains the same throughout the bond's life, while the inflation rate adjusts every six months to protect purchasing power from inflation. The Bureau of the Fiscal Service announces the inflation rate twice a year in May and November, based on changes in the Consumer Price Index for All Urban Consumers (CPI-U). The combined rate, known as the composite rate, changes every six months from the issue date of the bond.

The minimum purchase for an I bond is $25, and the maximum annual limit is $10,000. I bonds can be sold 12 months after purchase and mature after 20 years. However, if sold before the five-year mark, they lose three months' worth of interest.

Overall, I bonds offer a way for investors to protect their savings from the negative effects of inflation, as the inflation rate component of the bond's interest rate adjusts to offset changes in inflation and maintain the purchasing power of the investment.

Explore related products

iBOND Total Etch Bottle Refill

$114.13

Kulzer KU-66040094 Ibond Total-Etch Bonding, Bottle Refill, 4Ml

$114.13

66039867 Ibond Total Etch Bottle Value Pack, 3 x 4Ml Bottles, Ifu and Pictorial Card

$271.06

66040094 Ibond Total Etch Bottle Refill, 1 x 4Ml Bottle, 50 Application Tips, Ifu and Pictorial Card

$104.96

I bonds are US government-backed

The interest rate on I bonds is designed to keep pace with inflation and protect the purchasing power of the bondholder. The rate is adjusted every six months in May and November, based on changes in the Consumer Price Index for All Urban Consumers (CPI-U). This ensures that the purchasing power of the bondholder is not eroded by rising inflation.

The interest rate on I bonds consists of two components: a fixed interest rate that remains constant throughout the bond's life and an inflation rate that adjusts every six months. The combination of these two rates is known as the composite rate, which determines the total return on the I bond. As of May 2025, the composite rate for I bonds is 3.98% until October 31, 2025.

I bonds can be purchased electronically at any time online through TreasuryDirect. The minimum investment is $25, and the maximum annual limit is $10,000. I bonds must be held for at least one year before they can be cashed in, and there are interest rate penalties for cashing in before five years. They earn interest monthly, which is compounded semi-annually, and they can be sold after 12 months of purchase, maturing after 20 years.

I bonds have a fixed interest rate

I bonds, or Series I bonds, are interest-bearing US government savings bonds. They are designed to offer low-risk investments. They earn a combined fixed interest and variable inflation rate. The fixed rate is set each May and November and applies to all bonds issued in the six months following the date when the rate is set. This fixed rate then applies for the life of the bond. The inflation rate is also adjusted every six months, in May and November, based on changes in the non-seasonally adjusted Consumer Price Index for all Urban Consumers (CPI-U). This means that the composite rate for I bonds is not fixed and can change every six months based on the variable inflation rate.

The fixed rate of interest that you will get for your bond is known at the time of purchase and remains the same for the life of the bond. This fixed rate never changes. The variable inflation rate, however, can change every six months, and if the composite rate fluctuates, the actual interest earned may be higher or lower than expected.

The two types of interest that a Series I bond earns are an interest rate that is fixed for the life of the bond and an inflation rate that is adjusted every May and November. These bonds are issued at a fixed interest rate for up to 30 years, with a 20-year initial maturity and a 10-year extended period. They are non-marketable bonds, meaning they cannot be bought or sold in the secondary markets.

It is important to note that I bonds are different from EE bonds, which earn a fixed interest rate for the life of the bond. This rate is generally lower than the composite rate offered by I bonds. However, EE bonds come with a unique guarantee: if held for 20 years, they will double in value, providing a 3.5% annual return.

I bonds have a variable inflation rate

The interest rate for I Bonds is calculated from a fixed rate and an inflation rate, which combine to form a composite rate. This composite rate changes every six months and can go up or down. The fixed rate is set each May and November and applies to all bonds issued in the following six months. On the other hand, the inflation rate is adjusted every six months, depending on the inflation rate over the previous six months. For example, the inflation rate for I Bonds issued from May to October 2025 is based on the inflation rate from October 2024 to March 2025.

The variable inflation rate for I Bonds can be negative, as it was in the six-month period beginning September 2014, when it was -1.60%. However, the composite rate can never drop below 0%, so investors will not lose money even if the inflation rate is negative.

The variable rate is designed to track inflation and protect investors from its effects. When inflation increases, the composite rate for I Bonds also increases. However, if there is deflation (negative inflation), the composite rate can fall below the fixed rate, as long as the fixed rate itself is not zero.

The variable rate for I Bonds has been criticised for only adjusting every six months, as this can lead to semiannual rates under-delivering compared to a year-long average. However, adjusting the rate yearly could also cause investors to miss out on the highest semiannual periods.

I bonds have a minimum purchase of $25

I bonds are a type of savings bond offered by the US government through its TreasuryDirect application. They are one of two types of savings bonds currently sold by the US government, the other being Series EE bonds. I bonds are inflation-indexed bonds, meaning that their interest rate changes every six months based on inflation. The interest rate is calculated using a fixed rate and an inflation rate, with the latter being reset every six months.

I bonds have a minimum purchase amount of $25. In other words, you can buy an I bond for any amount between $25 and $10,000 in value. For example, you could buy an I bond for $75.38. In any one calendar year, you can buy up to $10,000 worth of I bonds for yourself, in addition to any bonds you buy as gifts or for a child. If you are buying an I bond for a child, the child will need a TreasuryDirect account linked to the account of a parent or another adult custodian. It is important to note that the money from savings bonds intended for a child's college education should not be put in the child's name but should instead be kept in the name of an adult.

The option to buy I bonds will be discontinued on January 31, 2025. I bonds issued between May 1, 2025, and October 31, 2025, are currently available for purchase through the TreasuryDirect application.

Frequently asked questions