Purchasing I Bonds
An individual can purchase $5,000 in paper and $5,000 in electronic I Bonds per calendar year. Unlike EE Bonds, I Bonds are sold at face value. I Bonds can be purchased under sole ownership, primary ownership, or for a beneficiary.
Paper I Bonds - Paper I Bonds are available in denominations of $50, $75, $100, $200, $500, $1,000, $5,000, and $10,000 and are issued as paper bond certificates. Paper I Bonds are available for purchase and redemption at most banks nationwide. Paper bonds can be converted into electronic bonds using the Treasury Direct website.
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 - Many organizations offer direct purchase of I Bonds and other US Savings Bonds directly through payroll deduction plans. With these plans, part of your pretax paycheck is deducted for use in purchasing bonds directly. Because payroll deductions usually occur on a pretax basis, you will save money on taxes by receiving less taxable income. Because I Bonds are state and local tax exempt, using a payroll deduction program may be beneficial for those worried about taxable income. 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.
Replacing an I Bond
An I bond can be replaced if it is lost, stolen, or destroyed. If a new bond is not received within 15 business days of purchase, you should contact the institution from which you purchased the bond. If you purchased the bond through a payroll deduction plan, contact the payroll department of the company. The institution will then track down the problem with the bond.
If your bond is lost, stolen, or destroyed after you received it, the bond can be replaced with a new bond once you submit a Form PD F 1048: Claim for lost, stolen, or destroyed United States Savings Bonds. The original bond officially becomes property of the US Government when a replacement is issued and can not be redeemed.
Reissue an I bond
An I bond can be reissued for a variety of reasons, such as adding or removing a co-owner, an owner has changed his or her name, to correct an error, or to have a bond reissued to a personal trust estate. I Bonds can be reissued with the correct form, which depends on the circumstances for reissuing the bond.
Here are the reasons to use Form PD F 4000 to reissue I Bonds. Full instructions are included on the form.
- A sole owner wants to add another individual as a co-owner or beneficiary.
- An owner wants to change the current beneficiary to a co-owner.
- An owner wants to remove a living beneficiary and have the bond reissued either in the owner's name alone or in the owner's name with another person as a co-owner or beneficiary.
- A surviving owner, co-owner, or beneficiary wants to remove the name of a deceased person and have the bond reissued in the survivor's name alone or in the survivor's name with another person as a co-owner or beneficiary.
- To change the name of an owner, co-owner, or beneficiary because of marriage, divorce, annulment, or court order. See Name Changes for more information.
- To correct a substantive error in the registration, see Incorrect I Bond Registration.
Use Form PD F 1455 to:
- Reflect in the registration the court's appointment of a guardian, conservator, or similar representative for the estate of a living owner or co-owner.
- Reflect in the registration the court's appointment of a legal representative for the estate of the last deceased registrant.
Use Form PD F 1851 when:
- The owner or both co-owners want the bond(s) reissued in the name of a trustee of a personal trust estate.
Next: View Values of Current Bonds >>
Personal Finance
Site Network
IBonds.info
Online Savings Accounts .info
Roth IRA Accounts.info
Allocation of Assets .info
Recommended Book
