What's a 'gift box' strategy?

TreasuryDirect lets you buy I-bonds as gifts for others — pre-purchased and held in your account until 'delivered.' Each delivery uses up that recipient's $10k annual cap. You can stockpile gifts when rates are high and deliver in future low-rate years. Husband-wife gifts are common: $40k locked in at high rate, delivered $10k each per year.

Should I redeem when fixed rate goes higher?

Sometimes. If you bought 0% fixed in 2021 and current is 1.3%, switching costs 3 months of interest but earns you 1.3% × 30 years going forward = +39% nominal vs holding. Math favors switching anytime fixed-rate bumps up by 0.5%+ if you have decades to go. Run the breakeven before swapping.

Are I-bonds a good place for emergency fund?

After year 1: yes. Before year 1: terrible (locked up). The standard hybrid: 3-6 months expenses in a HYSA + remainder of emergency target in I-bonds. After 5 years they're penalty-free; combined yield typically beats HYSA by 1-2%/yr.

Retirement & investing · free calculator

I-Bond purchase strategy

Project Series I Savings Bond returns including current fixed + inflation rates, $10k/year individual cap, gift-box strategies, and 5-year early-redemption penalty.

Annual purchase amount

$10k cap per SSN; $20k via tax refund + paper bonds.Current fixed rate %

Set semiannually by Treasury. May 2024: 1.30%.Expected long-term inflation %

Years held

Final value

Show the work

Total interest earned$50,700
Estimated composite rate7.34%
Annual purchase$10,000

I-Bonds — Treasury inflation hedge with a 5-year lockup

Series I Savings Bonds adjust their interest rate twice yearly based on CPI inflation. Combined with a small fixed rate that locks in for the bond's life, they're a useful inflation hedge — especially for people who already maxed traditional retirement accounts.

The composite rate

composite = fixed + (2 × inflation) + (fixed × inflation)

Real-world examples:

Nov 2023: 1.30% fixed + 3.94% inflation = 5.27% composite
May 2024: 1.30% fixed + 2.96% inflation = 4.28% composite
Nov 2021: 0.0% fixed + 7.12% inflation = 7.12% composite

Fixed rate locks in for the bond's life (30 years). If you bought a 1.30% fixed bond, it's 1.30% above inflation forever.

The rules

$10,000/year cap per SSN through TreasuryDirect
Additional $5,000 paper bonds via tax refund (boost to $15k or $20k)
Minimum 1-year hold; can't redeem
5-year hold required to avoid 3-month interest penalty
30-year max maturity
Federal taxable (deferrable until redemption); state-tax-free

When I-bonds win

Maxed 401(k) + Roth IRA, looking for next bucket
Want inflation hedge that beats TIPS yield
Building a 5-year emergency fund
Tax-deferral matters (in high-tax-now / low-tax-later situations)

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