# I-bond question

Normally only \$10k of I-bonds can only be purchased each year per person (or entity, but let’s ignore entities for now). I came across an article that states that more than \$10k can be purchased for a person as a gift, but it can only be distributed \$10k at a time (i.e. per calendar year). I am trying to investigate if this is correct. If it is correct, then one can purchase \$50k of I-bonds as a gift to someone (spouse perhaps), and then enjoy the higher current interest rates on \$50k beginning now, and then transfer as a gift \$10k of them each year for the next 5 years.

Is this correct?

Excerpt of salient point - If you’d like, you can buy \$10,000 worth of I Bonds for each of your 20 family members or you can make five separate purchases of \$10,000 each for the same family member, all in the same calendar year. The limit is on how much you can deliver to the same recipient in the same calendar year.

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If it is correct, then one can purchase \$50k of I-bonds as a gift to someone (spouse perhaps), and then enjoy the higher current interest rates on \$50k beginning now, and then transfer as a gift \$10k of them each year for the next 5 years.

Yes, it’s correct. That said - if you buy \$50k of bonds for one person, with a current base rate of 0%, you are making a 4 or 5 year bet that inflation rates will continue to be high, since you can only give \$10k/year to the receiver of the gift, and the bonds can’t be cashed until the receiver actually gets the bonds.

AJ

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Yes, it’s correct. That said - if you buy \$50k of bonds for one person, with a current base rate of 0%, you are making a 4 or 5 year bet that inflation rates will continue to be high, since you can only give \$10k/year to the receiver of the gift, and the bonds can’t be cashed until the receiver actually gets the bonds.

Good point!

However, there is one thing I haven’t ascertained yet … what happens to gift bonds in your account that haven’t been transferred to the person, and that person dies before you transfer the gift to them.

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…what happens to gift bonds in your account that haven’t been transferred to the person, and that person dies before you transfer the gift to them.

My understanding is that whether you purchased them for yourself or others, that any amount > \$10K that does not fall within the required parameters would have to be withdrawn (with no interest allowed). Otherwise, why have the \$10K max? People would be exploiting such a loophole all the time.

The alternative, of course, is finding another recipient

Pete