What are I bonds?


Quick Answer

As of August 2015, an I bond is a type of savings bond that earns interest based on a combination of a fixed rate and an inflation rate, according to TreasuryDirect. It is meant to be a long-term investment.

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Full Answer

The interest on an I bond compounds semiannually, and it earns interest for up to 30 years, explains TreasuryDirect. As of 2015, the minimum purchase price for an I bond is $25, whereas the maximum purchase price is $10,000 per calendar year. The composite interest rate for an I bond is 0.00 percent. The fixed rate is 0.00 percent, and the inflation rate is -0.80 percent. When the calculation for the composite rate produces a negative number, the composite rate is 0.00 percent.

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