I Bonds: How To Buy

I Bonds: A Low-Risk Investment Opportunity for Savvy Investors

In the realm of government-issued securities, I Bonds have emerged as a coveted investment option among risk-conscious individuals seeking steady returns with minimal volatility. For those unfamiliar with this unique product, we will delve into the intricacies of buying and profiting from these low-risk treasures.

What Are I Bonds?

Introduced by the U.S. Department of Treasury in 1998, I Savings Bonds (I-Bonds) are a type of Series EE bond specifically designed to protect investors against inflationary pressures. These bonds earn interest at a rate that is tied to market conditions and consumer prices, offering a low-risk investment opportunity for individuals looking to supplement their income.

How Do I Bonds Work?

When purchasing an I Bond, the principal amount (face value) grows in tandem with inflation-based rates of return. The bond’s yield consists of two components: a fixed rate that remains constant over the life of the bond and a variable component tied to consumer prices as measured by CPI-U (Consumer Price Index for All Urban Consumers). This dual-pronged approach ensures that investors earn interest at an attractive rate, adjusted quarterly, without exposing their principal.

How to Buy I Bonds:

Investors can acquire I Bonds through the following methods:

  1. Online via TreasuryDirect: Visit treasurydirect.gov and create a digital account using your Social Security number, birth date, name as it appears on official documents (e.g., driver’s license), and valid identification information.
  2. Mobile App: Utilize the mobile app available for both iOS and Android devices to purchase I Bonds directly through TreasuryDirect.

Minimum Purchase Requirements:

For current investors or those looking to diversify their portfolio, a minimum initial investment of $25 is required to purchase an I Bond online or via the mobile app.

Maximum Investment Limitations:

In 2012, Congress raised the annual investment limit for Series EE bonds from $30,000 to $10 million per year. However, with inflationary pressures factoring in your yield calculations, you should be mindful of this cap and plan accordingly when constructing your I Bond portfolio.

Additional Features and Considerations:

  1. Tax-Free Maturity: When the bond reaches its maturity (up to 30 years), it can be redeemed for principal plus interest earned without being subject to federal income taxes.
  2. Penalty-Free Redemption: Although there’s no tax penalty, if you redeem an I Bond within the first five years after purchase or within three months of issuance, you will forfeit a portion of the accreud interest.
  3. Protection from Inflation: Due to their CPI-U-based inflation-indexed returns, I Bonds are well-suited for investors seeking low-risk investments with potential long-term value.


As a smart and savvy investor looking to supplement your income through low-risk investments, consider adding I Bonds to your portfolio. By leveraging Treasury’s innovative bond offerings, you can protect yourself from inflationary pressures while potentially generating attractive returns without the inherent volatility associated with other investment vehicles. With proper planning and an understanding of how these bonds work, I Bonds offer a compelling opportunity for long-term investors seeking steady income streams.

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