Retirement & Savings

What Is an I Bond?

An I bond (Series I savings bond) is a US government savings bond whose interest rate combines a fixed rate with an inflation rate based on the Consumer Price Index. The inflation part resets every six months. I bonds must be held at least one year, and cashing them before five years forfeits the last three months of interest.

Tax Treatment

Interest is subject to federal income tax but exempt from state and local income tax, and federal tax can be deferred until the bond is cashed or matures after 30 years.

Purchase Limits

Annual purchase limits apply per person.

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🔗 Related Terms

Consumer Price Index (CPI) Inflation Treasury Bill (T-Bill) Real Rate of Return

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Last updated: September 29, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.