Saving with I Bonds

With the risks of the fluctuating stock market, many people are looking for safer alternative forms of investment. Though the government is spending a lot of money on bailouts and other initiatives, treasury bonds are still a secure choice.

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I Savings Bonds are non-marketable securities that can be purchases electronically or at your financial institution. You can purchase them directly from treasurydirect.gov in amounts to the penny beginning at just $25. You can also redeem, convert and replace I Bonds online.

The maximum you can invest in I Bonds is $5,000 per social security number per calendar year. Financial institutions generally offer I Bonds in denominations starting at $50.

I Bonds continue to earn interest for up to 30 years. They can be redeemed after a 12-month holding period. If you redeem them any time after the holding period up to five years from the purchase date, there is a penalty equal to the last three months of interest. After a five year period, you can redeem them with no penalty.

The interest rate on I Bonds is determined by both a fixed rate and an inflation index. To learn more about the rates and terms of I Bonds (or to make a purchase), visit TreasuryDirect. I Bonds are a terrific investment option if you are looking for supplemental retirement money.