Finance Maxxing
Fixed Income & Bonds
I-Bonds (Series I Savings Bonds)
State tax-exempt, tax-deferred until redemption.
I-Bonds earn a composite rate of a fixed rate plus a variable inflation rate, adjusted every 6 months.
Key Features
| Feature | Details |
|---|---|
| Purchase limit | $10,000/person/year (+$5,000 via tax refund) |
| Minimum holding | 12 months |
| Early redemption penalty | Last 3 months of interest (if < 5 years) |
| Maturity | 30 years |
| State tax | Exempt |
| Federal tax | Deferred until redemption |
Tax Advantages
- State tax-exempt (like all Treasuries)
- Tax-deferred — no annual tax on accrued interest
- Education exclusion — interest may be completely tax-free if used for qualified higher education expenses (income limits apply)
I-Bonds vs. TIPS
| I-Bonds | TIPS | |
|---|---|---|
| Phantom income | No (deferred) | Yes (annual) |
| Purchase limit | $10,000/year | Unlimited |
| Liquidity | 12-month lockup | Marketable |
| Best for | Taxable accounts | Tax-advantaged accounts |