Series I Bonds: Revisited
Back in November 2021, we wrote about how Series I bonds worked. Back then, these bonds paid an “eye-popping 7.12%” which would have helped keep up with already high inflation at that time. A cap of $10,000 per person, per calendar year, limited how much could be bought.
Now, these bonds are paying 9.62%, as inflation is slightly higher today than it was in November. Remember, these bonds will go up and down with inflation. So, if inflation stays high forever, then these bonds will adjust and continue to pay these healthy yields. The stated rate mentioned above will be good for the next six months and will reset based on current inflation numbers at that time.
How to Buy These Bonds:
These bonds can only be bought directly from TreasuryDirect.
Another possibility would be to gift these bonds to your children or grandchildren. We pulled the below description directly from treasurydirect.gov.
Electronic Gift Bonds:
To buy an electronic savings bond as a gift:
You must have a TreasuryDirect account
The recipient must have a TreasuryDirect account
You must know the recipient’s:
Full name
Social Security Number or Taxpayer Identification Number
TreasuryDirect account number
You can give gift bonds to adults or children. A child under 18 can have a TreasuryDirect account only if a parent or other adult custodian creates a minor linked account.
For instructions on how to buy and deliver a gift bond in TreasuryDirect see:
Two points:
Keep the bonds in your account until you're ready to deliver them.
You must hold the bonds in your TreasuryDirect account for at least five business days before you deliver them to the gift recipient. The five-day hold protects Treasury against loss, by ensuring the ACH debit has been successfully completed before the funds are moved.
When you deliver the bond to the recipient's TreasuryDirect account, the Treasury will send them an e-mail announcing the gift.
Paper Gift Bonds:
When you file your IRS tax return, you can buy paper Series I bonds for yourself or others if you are owed a refund. To buy for someone else, ask for the bond to be issued in the name of the other person.
See our post from November 2021 for additional rules and terms regarding these bonds.
Disclosures
The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.
The views expressed in this commentary are subject to change based on market and other conditions. These documents may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.
