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I Bonds – Are They Worth the Hassle?

High Yield Savings Account – isn’t that an oxymoron these days?  Where can a saver go to make a decent return on their savings and keep it liquid?  Regular savings accounts pay close to 0.8%, while high-yield savings accounts pay 1.5% on the high end.  This situation is intriguing investors to ask if I-bonds are worth the hassle of owning?

I bonds are US Govt issued bonds that have two components.  The first is a fixed interest rate component.  Today, that rate is 0.40% since the Federal Reserve keeps interest rates low.  The second component is an inflation adjustment rate.  Both components are adjusted two times a year, on May 1st and November 1st.  The May inflation adjustment occurred recently, which called for a rate of 6.48%.  The rate increase made many investors turn their heads and ask themselves if it is worth buying I bonds.  Below are a few Pros and Cons of owning I bonds.


  1. Safety – A government bond does not have default risk, so there is no worry about getting the principal and interest the bond pays.  A risk-free 9.62% is almost unheard of in the investment world.  Also, there is no price fluctuation.  There is no secondary market to buy and sell I bonds, so the price stays the same.

  2. Interest Rate – At a current rate of 6.89% annually of 3.45% semi-annually, this is much more lucrative than a US Govt Bond, Corporate Bond, CD, or savings account.

  3. Family – Each person can buy I bonds for up to $10,000 in a calendar year.  For 2022, a married couple could each buy $10,000, thus investing $20,000 as a family.  Then, in January 2022, they could buy $20,000 more.  Also, you can purchase I bonds for each child, and if you have a trust, the trust can buy them.

  4. Gifting – An individual can buy them as a gift for other people.  Remember, each person has a cap of $10,000 to purchase for themselves or gift to others.  Also, the gift can work as another college savings vehicle.


  1. Amount – Each individual can only purchase up to $10,000 in a calendar year.  If the current inflation and interest rate remain the same until next May, a person will earn $962 on the $10,000 investment.  This amount might not seem worth the hassle.

  2. Maturity – An investor must hold the bonds for 12 months, and if they sell the bonds before five years, they lose three months of interest.  If a person sells the bonds under 12 months, they receive no interest, much like a CD.

  3. Purchasing – There are only two ways to purchase I bonds.  The first is setting up an online account with  Then, an individual can buy up to $10,000 in I bonds.  The second is to use a citizen’s Federal Income Tax refund and purchase up to $5,000.  Technically, a person could buy up to $15,000 in I bonds in a calendar year.

  4. Liquidity – Tying up $10,000 from savings could be a problem using emergency funds.  If so, this is probably not a good idea.

I bonds have never been popular due to low interest and low inflation rates.  However, inflation has increased, making these safe bonds more attractive.  The cap at $10,000 and the annual interest of $689 might not be worth the hassle of owning and keeping up with a separate account.  On the other hand, 6.89% is an excellent rate of return for a low-risk government bond.  If you would like more information, please reach out Here and we would be glad to walk you through the process.

About The Author

Jordan Benold, CFP® provides fee-only financial planning and investment management services in Frisco, TX.  Benold Financial Planning serves clients as a fiduciary and never earns a commission or sells a product.  Jordan has over three years of experience as a financial advisor in Frisco.

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