I bonds earn interest for 30 years, though there are some restrictions to be aware of.
First off, I bonds cannot be redeemed within the first 12 months of issuance. And if you need to redeem the bonds after the initial 12 months but before you’ve held them for five years, you will forfeit the last three months of interest that you would have earned.
For example, if you redeem an I bond after holding it for 18 months, you will receive only the first 15 months of interest. After holding for five years, there are no longer any penalties for redemption.
Another unique trait of I bonds is that they are nonmarketable, meaning they can’t be bought or sold in the secondary market. They can only be bought from or redeemed by the U.S. Treasury, which means that unlike other bonds, such as Treasury inflation-protected securities or TIPS, you are guaranteed to get your full principal back, even if you redeem them before the 30-year maturity.