Savings bonds are very much a part of this country's history and culture, and will remain a part of America's future -- but in electronic form

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Buying I Bonds

As of 2012, I Bonds can be purchased directly from TreasuryDirect or as part of your annual tax refund. Be aware of annual purchase limits and when rates go into effect before you buy.

I Bond Annual Purchase Limits

As of January 2012, an individual can purchase up to $10,000 in electronic bonds directly from TreasuryDirect and up to $5,000 in paper I Bonds as a result of a tax refund per calendar year. Paper I Bonds are no longer sold, but they are still issued as a tax refund or to replace or reissue an existing paper bond. The annual maximum limit is based on your Social Security number, so purchases as a co-owner count towards the limit. Unlike paper EE Bonds, both electronic and paper I Bonds are issued at face value. I Bonds can be purchased under sole ownership, primary ownership, or for a beneficiary.

Types of I Bonds

Paper I Bonds - Paper I Bonds were issued from 1998 through 2011 and were available from local banking institutions. In 2012, the U.S. Treasury shifted to electronic bonds, but paper I Bonds can still be issued as payment for a tax refund or to replace or reissue an existing paper bond. Paper I Bonds were available in denominations of $50, $75, $100, $200, $500, $1,000, and $5,000 and were issued as paper bond certificates. Paper I Bonds can still be redeemed at most banks nationwide. Paper bonds can be converted into electronic bonds using the Treasury Direct website. While the paper I Bond is no longer issued directly, paper I Bonds continue to earn interest and do not need to be converted to electronic bonds to be redeemed.

You can request that your refund (or part of it) be used to buy up to $5,000 in paper series I savings bonds. You do not need a TreasuryDirect® account to do this.

- IRS Form 8888

Since new paper I Bonds are only available as a payment for a tax refund, some people have chosen to over-pay their taxes in order to take advantage of the program. In this case, it is important to know that there is a $5,000 maximum refund amount in the form of an I Bond and that the limit is per tax return, so those married and filing jointly cannot receive $5,000 each.

 Image of a Paper I Bond

Electronic I Bonds - Electronic I Bonds are available directly from the US Treasury through the Treasury Direct website. A $25 minimum purchase of I Bonds must be made, but unlike paper I Bonds, the electronic versions are not held in denominations. This means that any amount of the total purchase may be redeemed after the one year minimum while the rest continues earning at the current rate.

Payroll Deduction Purchases - Some organizations offer direct purchase of I Bonds and other US Savings Bonds directly through payroll deduction plans. With these plans, part of your paycheck is deducted for use in purchasing bonds directly. The Treasury Direct website also allows you to schedule direct deposit deductions for purchase of Zero-Percent Certificate of Indebtedness, which can then be used to purchase I Bonds through the Treasury Direct website.

When to Buy

I Bonds earn interest from the first day of the month of which the bond is purchased. Because I Bond issue dates are based only on the month and year of issuance and not the day, purchasing bonds on the last day of the month will result in the entire month's interest applying. It is therefore advisable to purchase I Bonds late in the month and to redeem them early in the month. You will not receive interest for the month in which you redeem the bond, so redeeming it early allows you to earn interest in another way. I Bond rates are adjusted the first of November and May. While it is nearly impossible to know what the fixed rate of the new bonds will be, the CPI-U measurement can be estimated by looking at the value of the inflation over the past several months. If you are considering purchasing I Bonds close to an adjustment date, evaluating the current fixed rate and the potential value of the variable component may determine when to buy.

Paper I Bond Portraits

What did paper I Bonds looks like? Click on an image to view a portrait and brief description of the historical person displayed on a paper I Bond.

Helen Keller (1880-1968) lost her sight and hearing as a young child due to illness, but overcame these challenges and went on to become the twentieth century's best known advocate for people with disabilities. Through her writing, lectures, and work with various organizations, Keller focused public attention on issues affecting the handicapped. She was also successful in making Braille the standard for printed communication with the blind. She had a lifelong relationship with the American Foundation for the Blind, and was instrumental in the Lions Club International's devotion to the blind and blindness prevention.


Page last modified 1/16/2012