The
Government I Bonds are a kind of US Savings Bonds issued by the US Treasury, in addition to the Government EE Bonds. The Government I Bonds are issued for a period of thirty years through which the owners earn interests and at the end gets a total pay back against the original amount invested. The Government I Bonds in fact protect the consumers against the rising inflation, as a result of the interests gained by the investments made by the consumer.
The Government I Bonds are in fact subjected to a rate of interest which is a resultant of the fixed rate of interest in addition to a inflation rate rate that is allowed for every six months, and is calculated upon the fluctuations in the Consumer Price Index for the consumers residing in Urban areas (or known as CPI-U).
Similar to the Government EE Bonds, the Government I Bonds are also available in the paper form as well as the Electronic one. The Paper certificate Government I Bonds are available for the potential consumers in denominations which are similar to those of the Paper Government EE Bonds. Whereas, the Electronic Government I Bonds can be bought in any amount exact to the penny beyond USD25.
Those interested in buying Government I Bonds may do so from amongst the three options available.
The Paper Government I Bonds can be got of the following :
- through most of the financial organizations in the US such as the commercial banks
- through the payroll deduction plans provided by almost all of the employers.
The Electronic Government I Bonds can be bought Online through TreasuryDirect.
Buying Government I Bonds entitles the investor to exemption from paying the income taxes charged by the local as well as the state authorities. Whereas the other taxes need to be paid as usual. The Government I Bonds, in a similar fashion to the Government EE Bonds, gain interests every month, which are given to the owner upon redemption of the US Savings Bond.
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Government I Bonds have to be possessed for a year in the least, and this is termed as the minimum holding period, and may be redeemed or exchanged for cash after that. Exchanging the Government I Bonds of both types for cash before the completion of the redemption period which spans for a minimum of five years will result in the forfeiture of the interests for the last three months prior to the redemption. However, if redeemed after five years that will not be subject to any such penalty as stated above.
Similar to the case of the Paper Government EE Bonds, a person with a Social Security number can buy an Paper Government I Bonds worth a sum of USD 30,000 in addition to the Electronic Government I Bonds.
However, the Government I Bonds do not take as long as the Paper Government EE Bonds (nearly twenty years to mature, only because they are bought at half the face value) to mature.