How to Buy I Bonds (almost RISK-FREE investment!)

For the most part, inflation really sucks. The cost of living is rising at the fastest rate in 40 years and wages are not.

(Not sure what’s happening with inflation? Check this out 👈)

But there is one bright spot. I bonds – a nearly risk-free and inflation-protected investment – are taking off. In fact, as of May 2022, the return rate on I bonds is a record-breaking almost 10%.

Here are the answers to all of your I bond questions and how to buy I bonds:

What the heck are “I bonds”?

“I bond” is short for “Series I Savings Bond,” and it’s a government-backed bond designed for inflation protection.

How do they work?

I bonds are based on two rates: the fixed rate and the inflation rate.

The fixed rate is the guaranteed return. Unfortunately, it’s set at 0% for I bonds, but it’s ok. First of all, even in the worst case scenario you get all your money back – you don’t lose anything. Second, the inflation rate more than makes up for it.

The inflation rate changes every six months. Every May and November, the US Treasury Department evaluates the current state of inflation and sets the inflation rate based on the Consumer Price Index for all Urban Customers (CPI-U). (Learn about the CPI and inflation.)

Since US inflation is rising at record-breaking rates, the inflation rate of I bonds is also at a record high. The Treasury has set the rate of return at 9.62% through the end of October 2022.

Watch a step-by-step video on how to buy I bonds!

Why should I buy I bonds?

Like I said, I bonds are a nearly risk-free investment. You are virtually guaranteed to at LEAST get your money back. Plus, at almost 10%, the return on I bonds is at a record high.

On top of that, they’re not expensive. If you have as little as $25 (i.e., the cost of a nice blouse at Target), you can buy an I bond.

Finally, since inflation is rising and showing no signs of substantially slowing down any time soon, I bonds are a safe and smart bet.

Anything else to know before I buy?

Yes. First of all, to take full advantage of this crazy high return, you’ll want to buy before the end of May. Also, once you buy an I bond, you can’t cash out for at least a year, and there’s a penalty for cashing out under five years.

And, as always - don’t invest unless you’ve already paid off all of your high interest rate debt (like credit card debt).

How do I buy I bonds?

So glad you asked! I made a step-by-step video explaining exactly how to buy I bonds. Check it out!

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