This may be done at any time. The interest earned is exempt from State and local income taxes. All or part of the interest earned can be excluded from income when the bonds are cashed to pay for post-secondary tuition and fees, if qualifications are met. Bonds can be redeemed at most banks and thrift institutions. Lost, stolen, or destroyed bonds can be replaced free of charge.
Interest is added to the value each month and paid when the bond is redeemed.
I Bonds are inflation-indexed Treasury securities that earn interest over and above their face value. The earning rate is a fixed rate of return above inflation. The purchase price of a series I bond is its face value. For information on types of bonds and denominations not available through the Payroll Savings Plan, please contact a financial institution. On the death of the owner, the bond becomes part of the owner's estate.