I bonds have a record yield of 9.62%, but they are not easy to buy: how to do it

However inflation has eased slightly in recent months, high prices on everyday items are still straining household budgets and making dollars worth less every day. Goods that would have cost you $100 a year ago will now cost you about $108.

To make matters worse, traditionally large investments like actions don’t help your money keep up with inflation. The S&P 500 index is down 23% year-to-date, and on Friday, the Dow Jones Industrial Average plunged nearly 500 points to its 2022 low.

A small silver lining in investing has been Series I savings bonds, whose interest rates are tied to inflation rates, meaning they pay more when inflation rises. On May 1, the US Treasury announced the highest rate ever for I bonds – 9.62%.

This record high rate for I bonds lasts for six months, as long as you buy them before October 28. And since I bond rates are set based on inflation for the previous six months, high inflation this past spring and summer indicates the rate for the next six months will likely be quite high as well.

Unfortunately, CashDirect – the required website for buying savings bonds – did not respond well to the new popularity of I-bonds. After the announcement of the 9.62% interest rate, the whole TreasuryDirect system crashed resulting traffic.

After a bit of frustration and persistence, I was able to navigate the TreasuryDirect system to purchase my own I Bond – and you can too. Read on to learn exactly how to buy Series I Savings Bonds, step by step.

For more useful information on investing, check out these five smart tips for newbie investors and find out how financial robo-advisors work.

How can I buy bonds?

I bonds are sold electronically via CashDirect, and all Americans can buy up to $10,000 a year. Additional paper I bonds can only be purchased with your tax refund, up to $5,000 per year.

To purchase Series I Savings Bonds electronically, you must first create an account with TreasuryDirect. Despite the site’s name, you shouldn’t expect the process to be simple, straightforward, or efficient.

The site appears to have been conceived in 1998, when Series I Savings Bonds were introduced. It makes you jump through a bunch of hoops to sign up and buy I Bonds, but stick with it and you’ll get there. (Maybe.) Highly recommend using a portable Where desk instead of a phone browser.

• Visit TreasuryDirect.gov and click on the green Opening an account link
• Under “Individual/Personal”, click the CashDirect registration link
• Review the information you will need to open an account: social security number; e-mail address; bank account and routing numbers
• Click on the blue Apply now button
• Select the “Individual” radio button and click Submit
• Enter your personal information, including your email address and bank details, then click Submit
• Verify your information and click Submit
• Select a image and caption (security measure) and Submit
• Choose one the password and answers three security questions (I suggest saving your answers somewhere) and Submit Again
• TreasuryDirect will then email you a account number that is, a letter followed by nine digits. Register your account number.
• Go back to the home page and click on the TreasuryDirect Login Linkthen click on the orange Login button
• Enter the account number that was emailed to you and click Submit
• As this is your first time logging in, TreasuryDirect will send you an email Again with a one-time password — check your emails (and brace yourself!)
• Enter your password and click “Save this computer” to avoid the one-time password on future logins
• Enter your the password. You cannot paste it. You can’t even type it! You must enter it using your mouse and a virtual keyboard (sorry, fellow users of password managers)
• Exhale – you’re in

Be warned: the site can be more than a little temperamental. On my first click after signing up, I was summarily kicked out with the message “TreasuryDirect is unavailable. We apologize for the inconvenience and ask you to try again later.”

I couldn’t log in for a few hours, but I finally completed the task I came for: buying Series I Savings Bonds. Here’s how:

• After logging in, click BuyDirect at the top of the page
• Below Savings bondsclick the radio button for “Series I” then click Submit
• On the BuyDirect page, enter the amount of the bond you wish to purchase, any exact amount to cents of $25 to $10,000.
• Inasmuch as optional stepyou can set up recurring I Bond purchases at different time intervals, such as a week or a month
• Confirm that your bank account information is correct and click Submit
• Review the terms of your purchase one more time and click Submit for one last time

You just bought an I Bond!

Unsurprisingly, the result may look disappointing – you’ll have to wait another business day for the bond to appear in your TreasuryDirect account. But then it’s up to you to keep it or resell it (after one year) whenever you want.

How to buy an I Bond for a child?

If you want to buy I bonds for a child, click on the blue Add a new registration button on the BuyDirect purchase page. Next, create a linked “minor account” before completing your purchase, following the same registration steps above.

Minor accounts are depository accounts that only the primary account holder can access, i.e. the parent or adult who opened the account. You can also use the Add New Record button to buy gift vouchers for anyone with an eligible social security number.

What about buying paper I bonds?

You can only buy paper I bonds when you file your tax return. You will do this by filling IRS Form 8888, Rebate Allocationwhich is included in all leader in tax software.

You can designate up to $5,000 a year in total for Paper I Bonds for two beneficiaries – it can be you and your spouse, but it can be two people you love. Your paper bonds will be mailed approximately three weeks after the IRS processes your return.

How can I redeem bonds?

To cash in or redeem your e-Bonds, you will need to log in to TreasuryDirect again. Once you are on your My Account page:

• Click it ManageDirect link at the top of the page
• Select the type of security (savings bonds) you wish to redeem and click on Submit
• Select all of the individual I-Bonds you wish to redeem (up to 50 at a time) and click Submit
• Choose where your money will go on the Redemption Request or Multiple Redemption Request page and click Exam
• Check your information and Submit to complete the takeover
• You’ve paid off your bonds and your money is on its way

You can cash in paper I bonds at most banks with physical branches, although your options exist decreases.

If you don’t have access to in-person banking, you can mail your paper bonds to Treasury Retail Securities Services, PO Box 9150, Minneapolis, MN 55480-9150 in the same way Form FS 1522 of the Tax Service Office.

You will still need to provide account and routing numbers to cash a paper deposit by mail. If you don’t have a bank account, many prepaid debit cards include account and routing numbers that you can use with paper or electronic I bonds.

Don’t forget that you have to wait at least a year to cash in an I Bond. If possible, it’s a good idea to wait five years or more to redeem this investment. If you cash it out before the end of five years, you will miss the last three months of interest earned.

For more low risk investments, see our lists of best high yield savings accounts and best CD prices.