How to Buy Series I Bonds

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Inflation surged to 6.8% for the 12-month period ending November 2021—the largest annual increase in 39 years, according to the Bureau of Labor Statistics. This rise in the price of goods and services erodes your buying power, and can complicate your long-term financial goals. For savers, one way to maintain the value of your money is to find a safe, reliable investment strategy.

Series I bonds, also called inflation-linked savings bonds, can prevent inflation from decreasing your money's buying power by earning interest that outpaces it. With a guaranteed return of 7.12% until April 2022, these low-risk bonds are a great way to diversify your portfolio or house savings without worrying about its value eroding if inflation continues to soar. You can buy Series I bonds directly from the U.S. Department of Treasury's website.

Read on to learn why Series I savings bonds might be right for your portfolio and for a step-by-step guide to buying them.

Series I Savings Bonds Quick Facts
Initial interest rate7.12% through April 2022
Minimum I bond purchase$25 through TreasuryDirect
$50 through federal income tax return
Maximum I bond purchase per calendar year$10,000 through TreasuryDirect
$5,000 through federal income tax refund
Where to
IRS Form 8888

How to Purchase Treasury I Bonds

You can buy I bonds directly from the U.S. Government's TreasuryDirect website or by using your income tax refund.

How to Purchase Treasury I Bonds via TreasuryDirect

  1. Go to and click "Open an Account." Follow the instructions to complete your registration.
  2. After you apply for an account, look out for an email from TreasuryDirect that contains your new account number. Once you receive it, navigate back to and select the "TreasuryDirect" login link under the "Account Login" label. Log in using your account number.
  3. You'll receive a one-time passcode in your email that you need to enter on the TreasuryDirect screen in the box labeled "OTP." Click "Submit" to log in to your account.
  4. Once logged in, select the "BuyDirect" option in the account banner. Select "Series I" and enter your registration information.
  5. Indicate your desired I bond purchase (any dollar amount between $25 to $10,000), your bank account information and the date on which you'd like to purchase the bonds. (Recurring purchases can be scheduled for a specific frequency, such as weekly, or by selecting your own dates.) Click "Submit."
  6. You'll have one last chance to review your purchase before submitting it and completing the order. You can track and manage your bonds at any time from your TreasuryDirect account.

How to Purchase Treasury I Bonds With Your Federal Income Tax Return

  1. To use all or part of your federal income tax refund to buy I bonds, fill out Form 8888, Allocation of Refund (Including Savings Bond Purchases). Follow instructions on the form when you file your return.
  2. You'll receive your savings bond in the mail after the IRS processes your return.

How Much Do Series I Bonds Cost?

Series I bonds are issued and sold at face value, meaning you pay what the bond's worth. For example, $100 will buy a $100 I bond.

You can purchase Series I electronic bonds in any amount (down to the penny) between $25 and $10,000. Paper bonds are sold in $50, $100, $200, $500 and $1,000 increments.

Are Series I Bonds a Good Investment?

Series I bonds can be a good investment if you want a low-risk savings vehicle that outpaces inflation. This makes them an option for supplementing your retirement income.

But keep in mind that Series I bonds are also a conservative investment that won't appeal to every investor. Consider their pros and cons before investing in them.

Pros of Investing in Series I Bonds

  • Protect against inflation: Inflation-linked savings bonds protect your money from the eroding effects of inflation by matching the inflation with interest yield.
  • Less risk: Series I bonds may be more suitable for those who are close to retirement, risk-averse or need to balance their more volatile assets for a diverse investment portfolio. They're issued and backed by the U.S. Department of the Treasury, and are virtually risk-free. While the semiannual interest rate could fluctuate in either direction based on the inflation rate, it's impossible to lose money on a Series I bond.
  • Tax benefits: The interest you earn on your Series I bonds is exempt from state and local taxes. It's still subject to federal taxes, but you won't need to pay any tax until you redeem the bonds. Additionally, if you use the income from your bond's interest to pay for qualified college tuition and fees, you can claim an exemption and pay no taxes on the earnings at all.

Cons of Investing in Series I Bonds

  • Lack of flexibility: Treasury I bonds are a long-term investment vehicle which require you to leave your money deposited for at least five years to reap the full rewards. Since you generally can't withdraw your funds within the first year, avoid tying up money you may need soon, such as an emergency fund, in Series I bonds. If you're looking for less commitment, look into short-term investment options.
  • Modest return: Series I bonds are a conservative investment. Their current rate of return, 7.12%, is impressive given their low-risk, but it's also a historical high. Once inflation dies down, that earnings rate is bound to take a hit. And even with record-high earnings, I bonds are still not likely to outperform more volatile investments, such as stocks, which have an average annual return of 10.3%, according to data from Vanguard. They may, however, outperform other savings vehicles of comparable risk, such as savings accounts and certificates of deposit.
  • Maximum purchase: While I bonds may be the ideal vehicle for shielding your savings from inflation, you can only buy a maximum of $15,000 in electronic and paper bonds per calendar year. And you'll need a diverse array of investing strategies to maximize your investment returns.

The Bottom Line

Series I savings bonds are a low-risk savings vehicle designed to preserve your savings' value against inflation. They may be right for you if you're risk-averse or nearing retirement, and they're also a great option for diversifying your portfolio with a low-risk investment vehicle. That said, they aren't right for all investors. For help managing your savings or investing your money, reach out to a financial advisor.