Where to purchase series i savings bonds

Please enter some keywords to search. Savings Bonds. Key advantages of savings bonds include: Popularity as gifts. Savings bonds are a popular birthday and graduation gift and also can be used toward financing education, supplemental retirement income, and other special events. Unlike other securities, minors may hold U. Tax advantages. You pay no state or local taxes on the interest on the bonds, and you can defer paying federal taxes on the interest until you cash in the bond or until it matures.

In addition, tax benefits are available for eligible taxpayers when Series EE and Series I savings bonds are used for qualified education expenses. For details on the education tax exclusion and the requirements to qualify, click here. Featured Content. But with this safety comes a low return, comparable to that of a high-interest savings account or certificate of deposit CD.

Corporate and municipal bonds, however, can lose value; with this risk comes a higher return. Series I bonds can be issued in any amount between the minimum and maximum purchase thresholds. I-bonds can be held for as little as one year or as long as 30 years, but if they are sold after fewer than five years, the holder sacrifices the last three months' worth of interest. If an I-bond is sold and the proceeds are used to pay for higher education, the interest is exempt from federal income tax.

Interest income for Series I bonds is taxable at the federal level, but not at the state and local levels. The series I bond is a zero-coupon bond , meaning that no interest is paid during the life of the bond. The interest is, instead, added back to the value of the bond and earns interest on interest. The bondholder has the option of selecting one of two methods of taxation—the cash method or the accrual method.

Under the cash method, tax is only applied when the bonds are redeemed. Therefore, a taxpayer that holds a bond for seven years before selling it will only be taxed at the time the bond is sold. Using the accrual method, on the other hand, taxes on the imputed interest earned are applied every year.

Sometimes, the Series I-bond income is tax-free at the federal level if it is used to pay for higher education. When you sell an I-bond and use the proceeds to pay for qualified higher education expenses at an eligible institution in the same calendar year, the interest is exempt from federal income tax. Treasury, using the TreasuryDirect website.

You can also use your federal tax refund to purchase Series I bonds. If you use your income tax refund to purchase U. The IRS will arrange for your U. The composite rate for I bonds issued from May through October is 3. This rate applies for the first six months you own the bond.

Each issue of Series I bonds has a fixed and variable interest rate component known as the composite rate that takes into account inflation at the time. A table showing the historical fixed and variable components can be found here. These bonds are issued at face value with a year final maturity: a year original maturity period immediately followed by a year extended maturity period. Internal Revenue Service. Savings Bonds. Fixed Income Essentials. Certificate of Deposits CDs. Actively scan device characteristics for identification.

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Other Treasury Securities. Replace or Reissue. Tax Consider- ations. Death of a Savings Bond Owner. On this page: What's an I bond? What's the interest rate on an I bond you sell today? Who may own an I bond? How can I buy I bonds? What determines who owns an I bond and who can cash it? What do I bonds cost? How much in I bonds can I buy for myself? Can I buy I bonds as gifts for others? How much in I bonds can I buy as gifts?

What's an I bond?