When Inflation Cools, So Do I Bonds

Back in 2022, the Series I Savings Bond was the rare investment that checked both boxes — safe and high-return. Inflation was running at 40-year highs, and the government was paying an incredible 9.62% interest rate on I bonds to keep pace with soaring prices. It was an easy way to lend money to the U.S. Treasury and earn a return that actually kept up with inflation.

Fast forward to 2025, and the story looks very different. As inflation has come down, so has the rate on those same I bonds. The fixed rate for I bonds purchased in mid-2022 was 0.00%, meaning every bit of their return depends on the inflation adjustment that resets every six months. According to the Treasury’s most recent chart, those bonds are now earning just 2.86% per year — a steep drop from the 9.62% that originally caught investors’ attention.

That shift has left many investors asking whether it’s time to cash out. I bonds must be held for at least 12 months, but after that, they can be redeemed anytime. If you redeem before the five-year mark, you’ll lose the last three months of interest — a small penalty at today’s lower rates. After five years, there’s no penalty at all.

Redeeming is simple: log in to TreasuryDirect.gov and select “Redeem a Security” under Manage Direct.  If you hold paper bonds, most local banks can process them for you. The proceeds include your original principal plus all accrued interest.

So, should you keep them? That depends on your goals. I bonds still offer complete safety and inflation protection, which can make sense for long-term cash reserves. But with Treasury bills and money market funds paying around 5% today, the case for holding them is weaker if you bought primarily for yield. For many 2022 investors, the I bond has already served its purpose — protecting purchasing power during the worst of the inflation surge.

Interest on I bonds is subject to federal income tax but is exempt from state and local taxes. Taxes can be deferred until the year you cash out, allowing for some flexibility in managing income. Better yet, the interest may be excluded from federal income if the bonds are used for qualified higher-education expenses in the same year they’re redeemed. Recent rules even allow you to roll the proceeds into a 529 college savings plan, deferring the tax further until the funds are used for education.

FinCEN Reverses Beneficial Ownership Reporting Requirement for U.S. Businesses

At the end of last year, many small business owners were preparing to comply with a new federal reporting rule under the Corporate Transparency Act (CTA). The law required most corporations, LLCs, and other entities to report their beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN). The goal was to help law enforcement track who ultimately owns or controls a business to prevent money laundering, tax evasion, and other financial crimes.

The reporting deadline for existing businesses was January 1, 2025, and the penalties for failing to comply were steep — up to $591 per day. Understandably, many business owners took the rule seriously and either filed early or made plans to meet the new requirement before year-end.

However, just before that deadline arrived, a federal court issued an injunction temporarily pausing enforcement of the CTA reporting requirement. The ruling came in response to a lawsuit arguing that the law exceeded Congress’s constitutional authority. As a result, FinCEN was ordered to suspend enforcement for the plaintiffs in that case, and the agency soon extended that pause nationwide while it evaluated its next steps.

Then, in March 2025, FinCEN announced an interim final rule that went even further — effectively eliminating the requirement altogether for most domestic companies. Under this new rule, U.S.-based entities formed under the laws of any state are no longer required to file or maintain beneficial ownership reports. The rule now applies only to foreign companies that are formed under the laws of another country and registered to do business in the United States.

This change means that millions of small U.S. businesses that had been preparing to file no longer need to do anything. Companies that already submitted their reports do not need to maintain or update them, and there’s no process (or need) to “unregister” those filings. The reports simply remain on record but are now inactive under the current rule.

FinCEN’s reversal followed significant feedback from small business advocates, professional associations, and state governments who argued that the compliance burden was unnecessary for legitimate domestic businesses. The agency has indicated that it may revisit the rule after a public comment period, but for now, U.S. entities are exempt from BOI reporting altogether.

If your company was formed in the United States, you do not need to file or maintain a BOI report. If your company was formed under foreign law and is registered to operate in the U.S., the reporting requirement still applies.

No action is required for those who have already filed. Your submission remains valid, but no updates or corrections are needed under the revised rule. There’s no need to do so for those who have yet to file.