Buy I Bonds Now the Easy, Pain Free Way

How to Buy I Bonds Now As of July 2022, the initial interest rate on new Series I savings bonds is now 9.62%. You have until October of the year (the same year, 2022) to buy I bonds now at that rate. This is WAY above the usual online savings account rates for today (the national average interest rate for savings accounts is 0.11 percent, although many online banks have savings rates higher than the national average).

What Makes I Bonds SO GREAT an Investment?

Series I bonds are inflation-protected and nearly risk-free. If you are determined, you can lock in a greater-than-9% return with I Bonds right now (as of this publication date). There are, however, some tips and tricks you need to know for it to be a smooth process.

What’s the difference between EE and I Savings Bonds?

EE bonds earn a fixed rate of interest and are guaranteed to double in 20 years. I bonds on the other hand, earn a variable rate of interest that’s tied to the current inflation rate; as inflation goes up, the value of the bond goes up. The value of an I bond is not guaranteed to grow to a certain amount, since it is a variable interest rate.

A QUICK REVIEW: The Basics

How do I buy I bonds now? What is an I Bond? An I Bond is a special savings vehicle that earns interest monthly from Day 1 of the month of the date of issue. Interest is continually added to the bond until that bond reaches 30 years or before if you cash out the bond.

What is the Minimum Investment?

$25 is the minimum investment. You can invest from $25 to $10,000 (for electronic I Bonds). What’s the difference between paper and electronic I-bonds?

NOTE: You sacrifice 3 months’ interest if you withdraw the bond before 5 years.

How long do I need to hold the I bonds?

What’s an I bond? I Bonds are issued by the US government to raise funds, but there is a holding period. You can cash them after one year, but if you cash them before five years, you lose the previous three months of interest. The I stands for Inflation-Indexed, which is what makes them such a good inflation buster.

I bonds earn interest for a total of 30 years–unless you cash them out first.
EXAMPLE: If you cash an I-bond after 18 months, you only get the first 15 months’ interest.

How is the Interest Rate Calculated?

I bond returns have two parts: a fixed rate and a variable rate, changing every six months based on the Consumer Price Index.

For a clear, easy-to-understand FAQ section on the most common Frequently Asked Questions on how to buy I Bonds, see Wealthy Nest’s Don’t Lose to Soaring Inflation with I Bonds here.

One Person’s Success Story with I Bonds

Although there can be issues on the Treasury Direct site, like identity verification issues, it’s not all gloomy and problems and holding periods–I Bonds have proven a great investment for MANY people. Purchases of these bonds have totaled over $14.9 billion since November 2021, or approximately $6 billion more than all previous 20 years combined.

Here is one investor’s Success Story:

“Been purchasing since 2004. I have 168 bonds in total. Some of the older ones are accruing at 11.09% interest… NONE of the I-Bonds are getting below 7.12%! Some have nearly DOUBLED in value over the years. Needless to say, my purchase of the bonds continues. My good decision to invest my emergency savings in I Bonds is paying off handsomely…”

Yes! I Want to Buy I Bonds NOW

Lots of folks are having problems with the government-run website, TreasuryDirect. That is the website where you buy I Bonds online. You can buy Treasury bonds from TreasuryDirect or you also can buy them through a bank or broker. You can also buy them in paper form using your federal income tax refund. Paper bonds are sold in five denominations; $50, $100, $200, $500, $1,000.

ISSUES using Treasury Direct? You are not alone

See below for questions and answers on how to handle some of the issues in using Treasury Direct. So many investors have been buying I Bonds that the agency has had to switch to a call center to handle the increased volume.

PROBLEM #1 Verifying Your Identity

On Treasury Direct, sometimes your identity is not automatically verified. As a result, they sometimes ask for a certificate of identity, but instead of a notary, they only accept a Signature Guaranty stamp from the person confirming my identity.

Problems Getting a Signature Guaranty Stamp

The following are some real-world questions and answers for this issue around identity verification (it is a known issue at Treasury Direct and they are working diligently to solve it).

I tried to buy I-bonds from Treasury Direct and my identity was not automatically verified–what should I do?

I had the same situation because I use a credit union instead of a bank… so go to my credit union and they were able to fill the pdf form provided in the Treasury Direct site and produce the right signatures and stamp.

Can I get a certificate of identity through my bank?

Yes, I did this through Bank of America (and only one location in my area actually did them–so call around). After going through a few hoops, a different person at Treasury told me that a regular notary would be fine (in some cases, Bank of America does it for you at no charge.)

SOME OTHER SOLUTIONS
And another investor writes: US Bank did it for us. One investor writes: My local credit union did the signature guaranty for me. Another said that Charles Schwab performed this service for them, at no cost to them.

PROBLEM #2 Safari Users

If you are using Safari you may receive the message “Safari can’t verify the identity of the website www.treasurydirect.gov&#34“, click “Continue” and you should be able to access your account.

NOTE that clicking “Continue” will not put your computer at risk in any way and the Treasury Direct site is a safe, secure site. Be sure to follow these rules to Stay Safe Online.