US Treasury is offering 7.12% interest rate on Series I savings bonds

US Treasury savings bonds

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U.S. savings bonds are debt securities issued by the U.S. Department of the Treasury. Essentially, they allow individuals to loan money directly to the government and receive a return on their investment. Since the government backs them, savings bonds are considered one of the safest investments available.

Through April 2022, the U.S. Treasury is paying the second-highest rate it has ever offered on these bonds — 7.12%.

You can purchase savings bonds at face value and immediately begin accruing interest on the amount. The bonds also compound gains, which means the interest also earns interest.

Banks used to sell paper savings bonds, but in support of the U. S. Treasury’s goal to increase the number of electronic transactions, these are no longer available. So instead, you can purchase two types of electronic savings bonds online: Series EE and Series I.

Series I U.S. Savings Bonds are inflation-indexed, which means they are a nearly risk-free investment. You can purchase them in penny increments, from $25 up to $5,000, and you can buy up to $10,000 in a single calendar year.


The U.S. Department of the Treasury began paying the current high annual rate of 7.12% on Series I Bonds in November, and the rate will continue on bonds purchased now through April of 2022.

The interest on bonds is not subject to state or local taxes, and you can defer federal taxes until you cash it in or until it matures. Tax benefits are also available when savings bonds are used for qualified education expenses.

It is important to note that the rate only applies for the first six months you own the bond. The variable rate changes every six months based on the bond’s fixed rate (0.00%) and the Consumer Price Index (CPI), so if inflation changes directions and the CPI falls, the interest rate could decline. However, it’ll never lose value, making Series I bonds a low-risk investment.

You can cash in Series I bonds once they are at least 12 months old, but you will lose the last three months of interest payments if you cash them in before five years. The longer you hold a bond, the more it will be worth; they can earn interest for up to 30 years.

To learn more about buying savings bonds or to make a purchase, visit Treasury Direct, a website operated by the U.S. Department of the Treasury Bureau of the Fiscal Service.

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