What are I-Bonds? | Kiplinger

Series 1 savings bonds It attracts a lot of attention. Thanks to high inflation, Those issued from May through October 2022 present a high compound rate of 9.62%.. We have compiled answers to frequently asked questions about first chain links.

How is the interest rate determined? The compound rate consists of two parts: a fixed rate that remains the same throughout the life of the bond, and an inflation rate based on the consumer price index. Every May and November, the US Treasury announces a new inflation rate and flat rate that applies to bonds issued over the following six months. The inflation rate changes every six months from the bond issue date. If your bonds were issued in October 2022, for example, the current inflation rate will apply through March 2023. (Note that bonds are issued the next business day after you buy them – so if you wait until the last day of October to buy bonds, for example, It will have an issue date in November.) The flat rate for bonds issued from May through October 2022 is 0%.

How does interest accrue? The bond earns monthly interest from the first day of the month of the issue date, and the interest is compounded semiannually. Interest is added to the principal value of the bond. You can’t redeem an I bond in the first year, and if you cash it before five years have passed, you lose the last three months of interest. If you check the value of your bond in TreasuryDirect.gov Within the first five years of owning it, he will deduct the amount you see as the three-month penalty. Thus, when you buy a new bond, the interest does not appear until the first day of the fourth month following the month of issue. If your bond’s issue date is October 2022, for example, the interest will be rolled over for the first time in February 2023.

how much can i buy? An individual can purchase up to $10,000 per calendar year of electronic bonds through TreasuryDirect.gov. Additionally, you can buy up to $5,000 each year in paper bonds with your tax refund (so for those who are married, the limit is $5,000 for a married couple).

How are bonds taxed? Bond interest is free of state and local income tax, and you can defer federal tax until you file your tax return for the year you pay cash in the bond or stop earning interest because it has reached its final maturity date (after 30 years), whichever comes first. You can also report the interest every year, which may be a smart option if you’d rather avoid a large tax bill years later. If you use the I bond proceeds to pay for some higher education expenses for yourself, your spouse, or dependents, you may avoid federal taxes. But you must meet several requirements to be eligible. Among them, the owner of the bond must be at least 24 years old by the date of issue and have an income below the specified limits.

I opened a TreasuryDirect account years ago and lost my account number. What do I do? go to the www.treasurydirect.gov/RS/UN-Forgot.do And fill in your personal information. It should match exactly what TreasuryDirect has on file—so if you’ve moved, for example, you may have to list a previous address. If the information matches, you will answer three security questions. If you respond successfully, you will receive an email with your account number.

I’m having trouble buying or managing bonds using the TreasuryDirect website. How can I get help? You can call TreasuryDirect at 844-284-2676, but due to the flow of interest in I bonds, be prepared to wait. If the number of callers in the queue becomes too large, an automated message may notify you that TreasuryDirect is no longer accepting calls for that day. You can reach TreasuryDirect via email at Treasury.Direct@fiscal.treasury.gov, but the TreasuryDirect website recently noted that email communications are temporarily limited due to the high number of contacts. To get a response, you must have a pending case and include your case number in the email subject line

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