Here are a few things you should know about the I Bond:
- You can buy I Bonds at face value; for example, you would pay $50 for a $50 bond.
- Earnings are exempt from state and local income taxes
- Federal income taxes can be deferred for up to 30 years, or until you cash them in, whichever comes first.
- You can earn interest on them for up to 30 years and can cash them out after 5 years without losing interest (You will lose three months' interest if you cash them in sooner.)
- You can now buy savings bonds with automatic deductions from your checking or savings account on a regular basis through the Easy Saver plan, or on the Internet.