UPDATES:
  • The annoying Virtual Keyboard is now removed from the Treasury Direct. 
  • The new I Bonds rate is 4.30% for May - October 2023. 

The U.S. Treasury I bonds are a secured investment option to park your money and earn high-interest rates simultaneously. The interest rate can be much higher than regular certificate deposits (CDs). 

In this post, I want to walk you through how to apply for a Treasury Direct account to buy the U.S. Treasury I bonds and answer some commonly asked questions about it.
Photo Credit: Treasury Direct
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    How Do the U.S Treasury I Bonds Work?

    Here's the basic information about the U.S. Treasury bonds:
    • The interest rate is tied to inflation, so the I bond's interest rate is high when there's inflation. 
    • The rate is renewed every six months on May 1st and November 1st, referred to as:
      • November - April rate 
      • May - October rate
    • You can access the rate information from the official Treasury Direct website. Remember that the government does not announce the new rate until renewal. However, there are always data points to help determine the new rate. I'll keep this blog's post updated when a new rate is predicted. 
      • The current May 2023 - October 2023 rate is 4.30%
    • The maximum amount you can buy U.S. Treasury I bonds is $10,000. If you want to buy more, you can buy a separate bond for your business using the EIN number or buy another bond for a different household member. 
    • It is vital to remember the following with the money that is used to purchase the bond:
      • You cannot withdraw your money for 12 months period. So make sure you do not need to access that fund before committing to this. 
      • You can withdraw your money after 12 months with a 3-month penalty. 
      • You can withdraw your money after 5 years without any penalty. 
      • Your funds mature after 30 years. 
    • Interest rates earned from the bonds are taxable income and, therefore, are reported on the IRS Form 1099-INT. You can defer taxes, too, if you like, and here's more information on tax reporting provided by the Treasury Direct website. 

    Current I Bond Rate & I Bond Rates 2023

    • The current I bond rate for May 2023 - October 2023 is 4.30%

    You can access the rate information from the official Treasury Direct website. Remember that the U.S. Treasury does not announce the new rate until renewal. I'll keep this blog's post updated when a new rate is predicted, so make sure you subscribe to our blog posts below.


    Past I Bond Rate & I Bond Rates

    • November 2022 - April 2023 is 6.89%

    How to Buy Treasury I Bonds With Treasury Direct? 

    If you already know about Treasury Direct and want to sign up for it, here are step-by-step instructions on how to do so. You can purchase I bonds after you receive your Treasury Direct account number.

    The Treasury Direct website is not the most sophisticated site, and therefore it may require some time to navigate for the first time. I recommend using the web browser on the desktop rather than mobile. 

    The following steps involve:
    • Opening an account with Treasury Direct
    • Buying Series I Savings Bonds

    Opening Treasure Direct Account

    • Go to the official Treasury Direct website to open an account.  
    • Click on the Apply Now blue button. 
    • Choose if you want to open your account as an individual or entity account type. 
      • The individual account type requires your social security number, while the entity account type requires your entity tax ID, such as your business EIN number. 
    • When you are done choosing the account type, simply click on the Submit button. 
    • Complete the form with your personal and bank information. 
      • The bank information is mainly used for linking your external bank with Treasury Direct to move money between accounts. 
      • Make sure you enter your email address correctly because Treasury Direct does not verify your email address, and that's where it sends you your Treasury Direct account number. 
    • Complete password information to finish the signup process. 
    • Before you can log into your Treasury Direct account to buy any bonds, you need the account number that was emailed to you with the following content:
    Dear Account Holder: Thanks again for taking the time to open a TreasuryDirect account. Your new account number is X-XXX-XXX-XXX 
    When you log into your account the first time, you will receive an e-mail with the one-time passcode and further instructions. Once logged in, you should check the Investor InBox section of your TreasuryDirect account for an important message. 
    To ensure continued delivery of TreasuryDirect related information to your inbox, please add the "From" address Treasury.Direct@fiscal.treasury.gov to your address book.

     

    Buying I Bonds On Treasury Direct

    To buy the U.S. Treasury I bonds via Treasury Direct, you must log into your account. Follow the steps below:
    • Go to the Treasury Direct login page. 
    • Provide the Treasury Direct account number you received via email when you opened the account. 
    • Provide your account password. 
    • After successfully logging in to purchase the I bonds for the high-interest rates, click on BuyDirect at the top of the page. Select the Series I option under the Savings Bonds (No Paper Savings Bond) and click the Submit button. 
    • You can complete the registration information and purchase the amount with the source of funds from the bank you provided when you opened the account with Treasury Direct. 
    • Simply follow the screen to complete your purchase, and let the Treasure Direct system takes care of everything behind the scenes. 
      • Remember that the maximum amount you can buy the I bonds is $10,000 per eligible account. 

    Are Treasury I Bonds A Good Investment?

    Like other U.S. Treasury bonds, the I savings bonds are not meant to get you rich. The interest rate is subjected to inflation in the U.S. economy, which can go really high when there's inflation. The past I bond rate for November 2022 - April 2023 is 6.89%, and the previous May - October 2022 rate was high, 9.62%.

    Personally, the way I look at I bonds is a secured and safe "savings account" where I can park my money there and do not need access to the fund for quite some time. I let nature take its own course and allow the fund to earn a fluctuating interest rate much better than what's offered with a regular savings account or certificate deposits (CDs). 

    Therefore, if you have excessive money that you do not know what to do with it, the U.S. Treasury I bonds can be a good investment option to make your money work itself to earn some interest. The Treasury Direct website also offers a growth calculator to help you determine how your savings can add up (more below). 

    It's worth re-iterating the following:
    • You cannot withdraw your money for 12 months period. So ensure you do not need to access that fund before committing. 
    • You can withdraw your money after 12 months with a 3-month penalty. 
    • You can withdraw your money after 5 years without any penalty. 
    • Your funds mature after 30 years. 

    Series I Savings Bonds Calculator

    The Treasury Direct offers the Growth Calculator that you can use to estimate the savings you can earn. There's also an instruction to use the calculator if needed: