While this adds a bit of a rigamarole, you can eventually convert these paper bonds to digital. The limit is per person — so if you're married, each spouse is allowed to purchase $10,000 in I bonds (plus the paper bonds if they have a tax return).
Step 1: Max out your $10,000 per person calendar year limit conventionally. You can buy $10,000 yourself and your spouse can buy $10,000 through their Treasury Direct login. Step 2: You could buy $10,000 or more in gift I Bonds in May that you could deliver to your spouse in future years.
There is no limit on the total amount that any person or entity can own in savings bonds.
$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).
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.
You also can buy an I bond in paper form, through the Tax Time Purchase Program. Use IRS Form 8888, “Allocation of Refund (Including Savings Bonds Purchases).” Purchase prices start at $50 and you can buy in $50 multiples up to $5,000 per person, per calendar year.
The May 2023 I Bond inflation rate is announced at 3.38%* based on the March 2023 CPI-U data.
Key Points. Pros: I bonds come with a high interest rate during inflationary periods, they're low-risk, and they help protect against inflation. Cons: Rates are variable, there's a lockup period and early withdrawal penalty, and there's a limit to how much you can invest.
Two owners co-own the bond. If one owner dies, the other becomes the single or sole owner. Neither owner can be an entity. The first-named owner is the primary owner.
Only Series I savings bonds are available in paper. Paper Series I savings bonds come in 5 denominations: $50, $100, $200, $500, and $1,000. The only way to get a paper savings bond is to use your IRS tax refund. With your tax refund, you can buy savings bonds for anyone (yourself, your child, or as a gift to anyone).
Gifting paper I savings bonds
Paper Series I savings bonds come in 5 denominations: $50, $100, $200, $500, and $1,000. The only way to get a paper savings bond is to use your IRS tax refund. With your tax refund, you can buy savings bonds for anyone (yourself, your child, or as a gift to anyone).
“I bonds that are stored in a gift box cannot be cashed out. Keep in mind that there is no maximum time that the bond can remain in the gift box.” Hards said you can purchase a maximum of $10,000 for any recipient, but you can buy for as many recipients as you would like.
Key points. You can buy inflation-protected Series I bonds in a child's name. The amount you can purchase electronically for anyone, including a child, is capped at $10,000 per person per calendar year.
May 1, 2023. Series EE savings bonds issued May 2023 through October 2023 will earn an annual fixed rate of 2.50% and Series I savings bonds will earn a composite rate of 4.30%, a portion of which is indexed to inflation every six months. The EE bond fixed rate applies to a bond's 20-year original maturity.
Interest on I bonds is exempt from state and local income taxes and, if you qualify, from federal income tax when used to pay for higher education. You can buy up to $10,000 in electronic I bonds per person in a calendar year, with an online account at TreasuryDirect.gov.
You can request up to three different savings bond registrations – for yourself and spouse, if married and filing a joint return, or someone other than yourself. If you order bonds for yourself and spouse, the bonds will be issued in the names shown on the return.
You may purchase up to $10,000 each of electronic EE and I Savings Bonds, per person (individual or entity), each calendar year. Purchases of any other Treasury securities do not alter the purchase limits for electronic EE and I Savings Bonds.
Under Manage My Account, click Update my Registration List. Click Add Registration. Select the Beneficiary check box at the top. Under First-Named Registrant, fill in the Account Owner's information (Your information).
It does not become part of the estate of the person who died. If you are the named co-owner or beneficiary who inherits the bond, you have different options for paper EE or I bonds and paper HH bonds. If only one person is named on the bond and that person has died, the bond belongs to that person's estate.
Another advantage is that TIPS make regular, semiannual interest payments, whereas I Bond investors only receive their accrued income when they sell. That makes TIPS preferable to I Bonds for those seeking current income.
Beware of I bonds' drawbacks
The biggest red flag for short-term investors: You can't redeem these bonds for a year after you purchase them, and you'll owe a penalty equal to three months' interest if you cash out any time over the first five years of owning the bond.
Because the limit is per person, each spouse is allowed to purchase $10,000 in electronic I bonds per year, or $20,000 per married couple. The total amount of paper I bonds that can be purchased jointly with a federal tax return is $10,000, or $5,000 per spouse.
EE Bond and I Bond Differences
The interest rate on EE bonds is fixed for at least the first 20 years, while I bonds offer rates that are adjusted twice a year 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.
Individuals, organizations, fiduciaries, and corporate investors may buy Treasury securities through a bank, broker, or dealer.