Can I Deposit a Series I Savings Bond?

by Tim Plaehn

Series I savings bonds and series EE bonds are the two types of savings certificates issued by the U.S. Treasury. If you have a paper series I bond certificate, the bond cannot be taken to a bank or stock broker and deposited in an account as an I bond. The Treasury does offer a way to convert the bond to electronic form.

Cash and Deposit

Once your series I bond is more than one year old, you always have the option to redeem the bond and deposit the proceeds in a bank or other type of account that accepts cash. However, by cashing your bond you lose benefits including inflation-protected earnings, tax deferred growth and long term compounding. If you do not need the money from your bond, it is probably a better choice to keep the bond in force.

Electronic Savings Bonds

The Treasury does offer series I savings bonds in electronic form. Electronic bonds are purchased and held using an online account established through the website. Electronic series I bonds have all of the features of paper bonds, plus a few extras. Electronic I bonds can be purchased for any amount from $25 to $5,000. Paper bonds are available in just seven different amounts from $50 to $5,000. Values of electronic I bonds are updated in the account, so it is easier to find the current value of a bond.

Converting Paper to Electronic

Paper series I bonds can be converted to electronic bonds and deposited to a Treasury Direct account. To deposit your bonds you first must set up an account on the website. Once you have set up the account, follow the directions on your account page to establish a "Conversion Linked Account." With the conversion account will come exact directions on how to send your I bonds to the Treasury for conversion and deposit into the account.

Series I Features

Series I bonds earn a rate of interest which is a combination of a fixed rate set when the bond was issued and an inflation based rate updated every six months by the Treasury. The bonds accrue interest monthly and compound semi-annually. The performance of I bonds has been very competitive. A $100 series I bond purchase when the bonds first became available in September 1998 had grown to a value of $211.56 at the time of publication. A series EE bond bought at the same time was worth $159.44.

About the Author

Tim Plaehn has been writing financial, investment and trading articles and blogs since 2007. His work has appeared online at Seeking Alpha, and various other websites. Plaehn has a bachelor's degree in mathematics from the U.S. Air Force Academy.

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