It's simple to invest in Series I savings bonds — here are three easy ways to get started. Once you do, you can start earning interest income on your bond investments in no time.
It is important to note that as you are limited to the total amount you can invest in Series I savings bonds by the way you purchase each bond. You can buy up to $5,000 in physical paper certificates and $10,000 in electronically registered bonds through the TreasuryDirect program, or $15,000 total, each year.
1. Buy Electronic Series I Savings Bonds Through TreasuryDirect
The United States Treasury Department has its own online account system called TreasuryDirect. Opening an account with TreasuryDirect is just like opening a checking or savings account at your local bank. Once you've been approved, you can begin buying Series I savings bonds immediately. The savings bonds are issued directly to your account in electronic format. (You won't receive a paper bond certificate using this method of investing in I bonds.)
A big benefit of this method is that you can invest any amount you want of $25 or more, to the penny, into Series I bonds. That means if you have $87.23, you can put it to work instead of having to buy only $50 or $100 bonds. For small investors, this is a great benefit that makes saving or investing easier. It also makes it much easier to follow a dollar cost averaging program because you can instruct the system to automatically make investments for you at regular intervals.
2. Buying Paper Bonds
You can buy paper Series I bonds when filing your income tax refund since you buy paper bonds only with your tax refund. When filing for your return, you must also include the IRS Form 8888, which tells the IRS how much of your refund you want to use to buy Series I bonds. The minimum purchase amount for the paper bond is $50. Once the IRS processes your return and issues the bond, it will take three weeks to be mailed to the address the IRS has on file for you.
3. Investing in Series I Savings Bonds Through Employer Payroll Savings Plans
Some employers have created payroll savings plans that allow you to invest in Series I savings bonds through regular payroll deductions. By not seeing the money, you are effectively following the pay yourself first strategy.