How to Buy I Bonds Direct from the Treasury

Inflation is taking center stage among financial market concerns these days, and for good reason. One effect is new interest in the US Treasury Series I Savings Bond, also known as the I Bond. The semi-annual interest paid to investors in I Bonds is indexed to the Consumer Price Index (CPI). I Bonds give investors a rate of return plus inflation protection and are backed by the U.S. government.

No one can say when today's inflation will abate. It could be quite soon, or inflation may be with us for years. Regardless of your forecast, I Bonds are designed with long maturities. If you choose to sell early, there is a 3-month interest penalty on those bonds turned in before they are held five years. I don't believe this should discourage you from considering I Bonds. 

Financial advisors do not have much incentive to encourage your investment in I Bonds because the savings bonds are sold directly to investors. Advisors cannot buy them for you (or earn commissions or fees on them!). However, an I Bond account is pretty simple to set up. You can go to TreasuryDirect.gov and open a free account to purchase these federally-backed securities directly from the U.S. Treasury.¹

Here’s how to get started.

1. Gather your info. Make sure you have the following close at hand: your taxpayer identification number, current address, checking or savings account information, and email address.

2. Go to Treasurydirect.gov's account creation page. Navigate to the bottom of the page and select “Apply Now” on the left. This will begin your account creation journey. Next, you will choose between an Individual or Entity account. Select Individual account type (it’s the default option) and click “Submit.”

3. Enter your info. Using the information gathered in step 1, fill in the fields requested and check the box at the bottom to certify your Taxpayer Identification Number. Click “Submit.”

4. Select a personalized image. Take some time here to select an image and caption you will remember. Think of this as a visual password for your account. Click “Submit.”

5. Secure your account. Select your password and security questions on this screen. Make sure the answers to your security questions are impossible to guess but easy to remember. Click “Submit” to move to the final step.

6. Check your email. Finally, look for your TreasuryDirect account number in your email. You’ll need this to log into your account later.²

You can begin purchasing I Bonds now that you’ve created your account. Here are a few things to keep in mind. I Bonds earn interest for 30 years unless you cash them in. You can do this after a year has passed from the time of purchase, but you'll lose the previous three months of interest. However, there is no penalty if you let them mature for five years or more. The maximum amount you can invest is $10,000 total per calendar year.³

Questions about I Bonds, or anything else financial? Feel free to reach out anytime.

^{1. Treasurydirect.gov, 2022}

^{2. Treasurydirect.gov, 2022}

^{3. Treasurydirect.gov, 2022}

^{The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.}