Finance

Are I Bonds Taxable? 10 Common Situations

As investors seek to insulate their portfolio from inflation and the ups and downs in the stock market, many have turned to Series I savings bonds (I bonds). Because of the high inflation rate, I bonds are now paying an interest rate of 6.89%, which is a healthy, safe return on your investment. This rate applies for bonds issued through April 30, 2023. The inflation rate changes every six months from the bond’s issue date. But don’t just focus on the investment return. I bonds also have important tax advantages for owners. For example, interest earned on I bonds is exempt from state and local taxation. Also, owners can defer federal income tax on the accrued interest for up to 30 years.

Original article: https://www.kiplinger.com/taxes/604926/taxes-on-i-bonds

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