May 2005 and later — TreasuryDirect (2024)

FAQs

Do Series EE savings bonds continue to earn interest after maturity? ›

The only savings bonds that still earn interest are I bonds and some EE and HH bonds. For those, you must look at the issue date. EE and I bonds earn interest for 30 years from the issue date.

EE Bond and I Bond Differences

The interest rate on EE bonds is fixed for the life of the bond while I bonds offer rates that are adjusted to protect from inflation. EE bonds offer a guaranteed return that doubles your investment if held for 20 years. There is no guaranteed return with I bonds.

Electronic I bonds: We pay automatically when the bond matures (if you haven't cashed it before then). Paper I bonds: You must submit the paper bond to cash it. See Cash in (redeem) an EE or I savings bond.

Series I, inflation-indexed savings bonds purchased from May through October 2005, will earn a 1.20 percent fixed rate of return above inflation. The 1.20 percent fixed rate applies for the 30-year life of I bonds purchased during this six-month period.

Historical I Bond rates

During that period, the highest fixed rate on record — 3.6% — was established on May 1, 2000, and the highest inflation rate of 4.81% was set on May 1, 2022. Here's a look at how bond rates have changed over the years from November 2002 to November 2020.

The May 2023 I Bond Rate

The May 2023 I bond composite rate is 4.30% (US Treasury) which is 2.15% earned over 6 months.

The 3.79% forecast is assuming that the Treasury keeps the fixed rate for new I Bonds at 0.4%, as it is now, Pederson said. He expects the fixed rate to hold at 0.4% or possibly tick a bit higher. The Treasury has been known to occasionally tweak the fixed rate when new rates for the savings bonds are announced.

At 20 years

If you buy an EE bond now, we guarantee that in 20 years it will be worth at least twice what you paid for it.

Zero Coupon Bonds

For example, a $1000 bond might be traded on the open market at a cost of $600, to be paid in full after 10 years.

Cons of Buying I Bonds

I bonds are meant for longer-term investors. If you don't hold on to your I bond for a full year, you will not receive any interest. You must create an account at TreasuryDirect to buy I bonds; they cannot be purchased through your custodian, online investment account, or local bank.

Are I bonds still a good investment in 2023? ›

For retirees, I bonds represent a robust portfolio option in 2023 – and savvy investors know it. Take the March 2023 I bond composite rate, which stands at 6.89%. That's a good and safe return for retirement investors, who know only too well that capital preservation is the name of the game in retirement.

If sold prior to maturity, market price may be higher or lower than what you paid for the bond, leading to a capital gain or loss. If bought and held to maturity investor is not affected by market risk.

When those bonds mature and stop earning interest, it is time to redeem them. Redeeming bonds is easy - just take them to a local bank or send them to the Bureau of the Fiscal Service.

Currently, Series EE bonds are guaranteed to earn a fixed interest rate for 20 years, which is when the bond matures. At 20 years, the government ensures that you will be paid double the face value of the bond.

You owe tax on the interest the bond earned until it was reissued. You are the new owner of a reissued bond. You owe tax on the interest the bond earns after it was reissued.

How much can I buy? Individual purchase limits for I bonds are $15,000 per calendar year — $10,000 worth of electronic I bonds and $5,000 worth of paper I bonds. Paper I bonds can only be purchased using your federal tax refund and are not bought electronically.

Are I bonds a good investment for you? I bonds can make good short-term investments, but you should feel comfortable holding them for at least one year and ideally, five years before cashing them in. They can be a good fit for seniors who want to earn interest on their savings while also keeping their nest egg safe.

The “I” stands for inflation. The interest rate on I Bonds is directly correlated with inflation. If inflation is high, the interest rate is high. If inflation is low, the rate is low.

The United States 30 Years Government Bond reached a maximum yield of 4.386% (24 October 2022) and a minimum yield of 1.031% (9 March 2020). Moving Averages 101: Second Edition: Incredible Signals That Will Make You Money ...

The annual rate may drop below 4%

Of course, the combined annual yield is only an estimate until TreasuryDirect announces new rates in May. In November 2021, the annual I bond yield jumped to 7.12%, and hit a record high of 9.62% in May 2022 before falling to 6.89% in November 2022.

How high will US interest rates go in 2023? ›

The Fed could hint at a pause

When Fed policymakers released their economic estimates in March, they expected to raise interest rates to a range of 5 to 5.25 percent in 2023.

In March 2023, the yield on a 10 year U.S. Treasury note was 3.66 percent, forecasted to increase to reach 3.69 percent by November 2023. Treasury securities are debt instruments used by the government to finance the national debt. Who owns treasury notes?

Current Refinance Rates for April 2023

30-year fixed: 7.08% 15-year fixed: 6.25% 30-year jumbo: 7.21%

May 2023 fixed rate will be 0.90%, total composite rate is 4.30% for next 6 months. For Savings I bonds bought from May 1, 2023 through October 31, 2023, the fixed rate will be 0.90% and the total composite rate will be 4.30%.

The latest iBond Series HK$15,000,000,000 Retail Bonds Due 2024 (Issue No.: 03GB2406R; Stock Code: 4246) (2024 iBond) has a minimum denomination of HK$10,000 and a term of three years. The semi-annual interest payments are linked to average annual inflation in Hong Kong, subject to a minimum interest rate of 2.00%.

One thing you should know about I bonds is that you can't purchase an unlimited quantity. Rather, you're limited to $10,000 worth of I bonds per year. That $10,000, however, is on an individual level. So if you're married, you and your spouse can each purchase $10,000 of I bonds per year for a total of $20,000.

All Series EE Bonds reach final maturity 30 years from issue. All Series EE bonds reach final maturity 30 years from issue. Series EE savings bonds purchased from May 1995 through April 1997 increase in value every six months.

After the one-year mark, you can go ahead and cash in your bond, but you will get hit with a penalty of three months' interest earned on the bond. There is no penalty if you simply hold onto the bond after five years.

When Andy tells the town council how much the town of Mayberry owes Frank Myers, he says the amount is $349,119.27. This is the exact amount to the penny that would be owed on a $100 bond accruing 8.5% interest compounded annually over 100 years.

How much will a $10000 I bond be worth in 6 months? ›

This composite rate of TreasuryDirect Series I Savings Bond, applied to $10,000 in I bonds, would earn a guaranteed $215 in interest over the next six months (not $430, that's because it's an annualized rate) — but you cannot cash in your bond until you've held it for a year. So why even mention the six-month take?

You can skip paying taxes on interest earned with Series EE and Series I savings bonds if you're using the money to pay for qualified higher education costs. That includes expenses you pay for yourself, your spouse or a qualified dependent. Only certain qualified higher education costs are covered, including: Tuition.

The initial rate is only guaranteed for the first six months of ownership. After that, the rate can fall, down to a fixed-rate component which, as of May 1, 2023, stood at 0.9%. One-year lockup. You can't get your money back at all the first year, so you shouldn't invest any funds you'll absolutely need anytime soon.

TIPs offer comparable inflation protection relative to I Bonds at higher yields, a significant advantage. TIPs are also somewhat riskier, more volatile securities, with quite a bit of interest rate risk. Both asset classes are good investments, but TIPs are slightly better, due to their higher yields.

$10,000 limit: Up to $10,000 of I bonds can be purchased, per person (or entity), per year. A married couple can each purchase $10,000 per year ($20,000 per year total).

The variable rate on I bonds will drop in May. Those who want short-term returns might prefer to buy I bonds in April to lock in higher rates. Long-term investors might be better served by waiting.

"It is possible that the I Bond fixed rate could rise in May," he said, "so it does make sense to hedge your bets by buying half of your annual I Bond purchase before May and the other half after April." Buying before the end of April also makes sense to lock in the 6.89% annualized rate for the next six months.

In any one calendar year, you may buy up to $10,000 in Series EE electronic savings bonds AND up to $10,000 in Series I electronic savings bonds for yourself as owner of the bonds. That is in addition to the amount you can spend on buying savings bonds for a child or as gifts.

The implosion is largely a function of the U.S. Federal Reserve aggressively raising interest rates to fight inflation, which peaked in June at its highest rate since the early 1980s and arose from an amalgam of pandemic-era shocks. Inflation is, in short, “kryptonite” for bonds, McQuarrie said.

The short answer is bonds tend to be less volatile than stocks and often perform better during recessions than other financial assets. However, they also come with their own set of risks, including default risk and interest rate risk.

What happens when bonds mature in Treasurydirect? ›

Electronic I bonds: We pay automatically when the bond matures (if you haven't cashed it before then). Paper I bonds: You must submit the paper bond to cash it. See Cash in (redeem) an EE or I savings bond.

Because yields are higher today than at any time since the 2008 global financial crisis, bonds now have better expected returns and can cushion against further price declines. An overweight to cash or very short-term securities worked well in 2022, but adding more duration exposure could prove valuable going forward.

If you have cashed paper savings bonds, you will receive a 1099-INT in the mail.

I bonds can be an excellent addition to a retiree's fixed income allocation. With built-in inflation protection and low-risk levels, they're a beneficial way for retirees to beat inflation without risking short-term losses like investing in the stock market.

A bond's term to maturity is the period during which its owner will receive interest payments on the investment. When the bond reaches maturity, the owner is repaid its par, or face, value. The term to maturity can change if the bond has a put or call option.

The rule of thumb advisors have traditionally urged investors to use, in terms of the percentage of stocks an investor should have in their portfolio; this equation suggests, for example, that a 30-year-old would hold 70% in stocks, 30% in bonds, while a 60-year-old would have 40% in stocks, 60% in bonds.

When the market consensus is that a rate increase is right around the corner, it's time to go to market. Unless you are set on holding your bonds until maturity despite the upcoming availability of more lucrative options, a looming interest rate hike should be a clear sell signal.

Series I, inflation-indexed savings bonds purchased from May through October 2006, will earn a 1.41 percent fixed rate of return above inflation. The 1.41 percent fixed rate applies for the 30-year life of I bonds purchased during this six-month period.

A Historical Glance at I Bonds

The first I bonds were issued in September 1998 with a base rate of 3.40%, which rose to 3.60% in May 2000, the highest ever. Since then, the guarantee has steadily declined, hitting 0% several times, including this latest, longest run from May 2020 until October.

What is the fixed rate for I series bonds? ›

The May 2023 I Bond fixed rate is 0.90%. This rate lasts for the 30 year life of the bond you purchase between now and October 2023.

How to Calculate Series I Bonds. For example, if the fixed rate is 0.30% and the semiannual inflation is -2.30%, the composite rate on the bond will be: = 0.003 + (2 x -0.023) + (0.003 x -0.023) = 0.003 - 0.046 - 0.000069.

A fixed rate bond (or fixed term deposit) is a savings account that you can put money into for a set period of time. It's usually 1, 2 or 3 years, but can also be as long as 5 years.

Only once your bond has registered, can you apply for a fixed interest rate and then there is a strict time limit attached before the offer lapses."

After applying a certain formula and rounding, the Treasury arrived at the 4.30 percent composite rate for I bonds issued from May 2023 through October 2023.

The interest rate on I Bonds is directly correlated with inflation. If inflation is high, the interest rate is high. If inflation is low, the rate is low. Inflation is very high right now.