How to Invest in I Bonds

To invest in I Bonds, you need to purchase them directly from the U.S. Treasury through the TreasuryDirect website. The minimum purchase amount is $25, and individuals can buy up to $10,000 worth of electronic I Bonds per calendar year. Additionally, you can use your federal tax refund to buy up to $5,000 in paper I Bonds. I Bonds are an attractive option for those seeking a safe investment that preserves purchasing power over time. For help deciding if this investment vehicle is right for your portfolio, consider talking to a financial advisor.

How I Bonds Work

I Bonds, or Series I Savings Bonds, are a type of U.S. savings bond designed to protect against inflation. Introduced by the U.S. Department of the Treasury, these bonds are an appealing option for conservative investors seeking a safe place to park their money. Unlike other bonds, I Bonds offer a unique combination of a fixed interest rate and a variable inflation rate, ensuring that the value of your investment keeps pace with the cost of living.

I Bonds earn interest through a combination of the fixed rate, which is set at the time of purchase and does not change, and the inflation rate, which is adjusted semiannually. The U.S. Treasury announces new rates every May and November. This structure ensures that the bond’s value increases with inflation, making it a low-risk investment option for long-term savings goals, such as education or retirement.

Step-by-Step Process of Buying I Bonds

A couple buying I Bonds through the TreasuryDirect website.

Investing in I Bonds is a straightforward process that can provide a secure and inflation-protected addition to your investment portfolio. I Bonds are a type of U.S. savings bond that offers a combination of a fixed interest rate and a variable rate tied to inflation. Here’s a step-by-step guide to help you purchase I Bonds with ease:

Set up a TreasuryDirect account: The first step is to visit the TreasuryDirect website and create an account. This online platform is the only place where you can buy electronic I Bonds. The registration process involves providing your personal information, including your Social Security number and bank account details.
Log in and navigate to purchase page: Once your account is set up, log in and go to the “BuyDirect” tab. From there, select “Series I Savings Bonds” as your purchase option. This page will allow you to choose the amount and other purchase details.
Select the amount to purchase: Decide how much you want to invest in I Bonds. The minimum purchase amount is $25, and you can buy up to $10,000 worth of electronic I Bonds each calendar year. If you want to purchase paper I Bonds, you can use your federal tax refund to buy up to $5,000.
Complete the purchase: After selecting the amount, follow the on-screen instructions to complete your purchase. This will involve confirming your bank account information and authorizing the transaction. Once completed, your I Bonds will be issued to your TreasuryDirect account.
Manage and track your bonds: After purchasing, you can manage and track your I Bonds directly through your TreasuryDirect account. The platform allows you to view your bond’s current value, interest earnings, and other important details.

How to Buy I Bonds as a Gift

Buying I Bonds as a gift is a thoughtful way to help someone secure their financial future with a safe and inflation-protected investment. The process is similar to purchasing I Bonds for yourself, but there are some key differences to ensure the bonds are properly issued to the recipient. To buy I Bonds as a gift, you must first have a TreasuryDirect account. This online platform managed by the U.S. Department of the Treasury allows you to buy, manage, and transfer I Bonds.

Once logged in, navigate to the “BuyDirect” tab and select “Series I Savings Bonds.” Choose the option to buy as a gift. Here, you’ll need to specify the recipient’s full name and Social Security number. The recipient must also have or create a TreasuryDirect account to receive the bonds.

Decide on the amount you wish to purchase. The minimum amount for a gift I Bond is $25, and you can buy up to $10,000 per year in electronic I Bonds. Unlike personal purchases, you cannot use your tax refund to buy paper I Bonds as a gift.

When you’re ready to deliver the gift, log back into your TreasuryDirect account, go to your “Gift Box,” and transfer the bond to the recipient’s TreasuryDirect account. The recipient will then receive an email notification and can view the bond in their account.

Bottom Line

A senior couple reviewing their I Bond investments.

Investing in I Bonds offers a secure and inflation-protected option for growing your savings. By purchasing I Bonds through the TreasuryDirect website, you can take advantage of their unique interest structure, which combines a fixed rate with an inflation-adjusted variable rate. This dual approach ensures your investment keeps pace with rising costs, safeguarding your purchasing power.

Tips for Investing

It’s important to make sure your investment choices align with your long-term financial goals. This is something a financial advisor can help you with. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Using an investment calculator can help you think through what investments you want in your portfolio and estimate how they might evolve over time.