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Series I Bonds The government on occasions offer special savings on these types of bond. Check out the benefits of a Series I Savings Bond at http://www.savingsbonds.gov. This series of government bond guarantees an interest rate of 3.4% plus an adjusted interest payment for inflation. The additional inflation interest is adjusted twice a year. Accumulated interest is tax-deferred, or tax-free until the time of the bond redemption. Purchases can be made online with major credit cards in amounts as little as $50 to $30,000 per year. These bonds must be held a minimum of 5 years or a penalty will apply for earlier redemptions. Series I bonds can be held for up to 30 years. There's an added bonus: Parents who take out these Series I Bonds can pass the total and interest to a child entering a college tax-free. Certain income limitations apply (read IRS publication 550 for more). Parents must predict their income level in the year their child enters the higher learning institute. |