Last November, The Bureau of the Fiscal Service announced an astounding 7.12% rate of return for Series I Bonds sold between November 2021 – April 2022. While the rate is subject to change again in May, the interest rate can’t go below zero and the redemption value of your Series I Bonds can’t decline. Therefore, your investment is secure and a nice alternative to a high yield savings account (only paying about 0.50% on average) for buy-and-hold investors.

What is a Series I Bond?

Series I Bonds are a low-risk savings product. During their lifetime they earn interest and are protected from inflation. Series I Bonds earn a rate derived from a fixed rate of return known when you buy the bond as well as an inflation rate that is calculated each May and November; the two rates together are called the composite rate. Interest revenue is earned monthly and compounded every six months (semiannually) for up to 30 years until you cash them out.

Who Sells Series I Bonds?

The Government! You can purchase bonds online at

How Little or Much Can I Purchase?

You can purchase as little as $25, or as much as $10,000 each year per person. Therefore, a married couple could purchase a total of $20,000 Series I Bonds in 2022.

Will I Pay Taxes on the Interest Revenue?

Of course! But if you live in a state with income taxes, you will enjoy a reprieve from those! That’s because Series I Bond interest revenue is only subject to Federal taxes; not state or local taxes.

When Can I Withdraw the Funds?

You can cash your bonds after 12 months, but it is best to plan on holding them for a minimum of five years. That’s because if you cash your bonds before five years, you will forfeit the interest revenue earned in the previous three months.

Is It For You?

Diversification is the key to a strong investment strategy. Bonds offer a secure alternative to the stock market, and today’s rates on Series I Bonds make them a great choice for the conservative funds in your portfolio.