These bonds earn interest for 30 years or until you decide to return them. If you redeem them before five years, you’ll lose interest on the previous three months. After five years, you can cash them in without penalty. By the way, you cannot redeem these bonds before one year.
If you have excess cash just sitting someplace, these may make sense.
Oh, yeah, the bad news: there is a limit per taxpayer of $10,000 worth of Series I bonds per year.
The income you earn is subject to federal income tax, but not subject to state or local taxes – how about that?
Possible good news? There’s talk the administration could raise the annual cap for Series I bonds fro $10,000 to $100,000 – we’ll follow this.
Where can you buy these? Alas, not even yours truly, with all my magical powers, can provide these. You must buy these directly from the treasury using the TreasuryDirect website.