Buy more than $10,000 in Series I Savings Bonds Through Gifting with Your Spouse

Many people have looked at the $10,000 annual limit for savings bonds and have not bought any I bonds because they don’t believe that’s enough money invested to ‘move the needle’ on their overall cash balances.

Beyond the traditional ways to get more I bonds (through your eligible trust or entity), you and your spouse can lock in May’s 0.90% fixed rate by making use of Treasury Direct’s Gift Box feature.

If you’re wondering when to cash out your I Bonds, check out our post When Should I Cash Out My I Bonds?

Let’s look at 3 principles for buying I Bonds from Treasury Direct

  1. Gift bonds count toward the limit of the recipient, not the giver.
  2. The gift counts for that person’s limit in the year in which they get the bond.
  3. While the gift is sitting in your TreasuryDirect account waiting to be delivered, it is in a special “gift box.” So, even then, it is not yours and does not count in your limit.

This means you and your spouse can lock in more than $10,000 at the 0.90% fixed rate. Some call this the I Bonds gift loophole, but this strategy is just following the rules that the US Treasury has set for gifting I Bonds to other individuals.

Your 3-step process to max out May 2023 I Bonds with the Treasury Direct Gift Box

Step 1: Max out your $10,000 per person calendar year limit conventionally. You can buy $10,000 yourself and your spouse can buy $10,000 through their Treasury Direct login.

Step 2: You could buy $10,000 or more in gift I Bonds in May that you could deliver to your spouse in future years.

  • Your gift purchase starts earning interest and begins its 12 month minimum holding period in the month you purchase the gift (even if you haven’t delivered the bond to its recipient)
  • Since you only know what today’s I Bond 6 month rate would be you would likely only want to buy up to:
    • $10,000 in a gift bond, to be delivered in early 2024
    • And maybe another $10,000 in a gift bond, to be delivered in early 2025

Step 3: You could have your spouse gift you $10,000 or more in I Bonds with the May rate, and then they would deliver the bonds to you in 2024 and perhaps 2025.

How you and your spouse can get $60,000 in I Bonds in May 2023

Using this method, you and your spouse could lock in $60,000 in I Bonds in May 2023.

$10,000 each = $20,000 total

$10,000 gift I Bond to each other (for 2024 delivery) = $20,000 additional

$10,000 gift I Bond to each other (for 2025 delivery) = $20,000 additional

This could lock in $60,000 in I Bonds, which would earn 4.30% for 6 months, then the next renewal rate for 6 months.

Read these cautions before using the gift box to buy more I Bonds

Now remember, this is a tactic that needs to be worked on together. You’re unable to cash in these bonds until you deliver the bonds into the gift recipients Treasury Direct account.

And buying these I Bonds now, with the expectation that you would deliver them in either, or both, 2024 and 2025 could cause you to miss the opportunity to buy I bonds in future years at a higher than 0.4% fixed rate (you won’t know this rate until the Treasury announces it in early May or early November each year).

These factors could all combine to create a situation where you hold these bonds longer than the 15-21 months that is outlined in this strategy. If so, then you’ll be earning interest at whatever the new inflation rate is announced at in the future, which may not be as high of a rate as you are seeing right now.

Gifting I Bonds Resources

Treasury Direct: Gift a Bond

Treasury Direct: How to gift a bond instructions

Treasury Direct: Video on how to deliver gift savings bonds

Treasury Direct: Guidance on calendar year limits

More I Bonds Resources