WANT TO INVEST IN INFLATION? HOLY SAVINGS BONDS BATMAN, LOOK AT THOSE I-BOND TENDIES!
Tired of seeing your gains wiped away by the insane levels of Inflation in the US economy? Well, there’s a nifty little government security that can help that even billionaire Bruce Wayne (A/K/A Batman) invests in. So what’s this little known investment that the Batman himself shills? Savings bonds! You heard me right, savings bonds, specifically Series I savings bonds which pay interest linked directly to the current inflation rate. The interest rate on I-Bonds right now is 7.12%! That’s a US government security that pays a multitude higher interest than any bank and more than most blue chip corporate bonds are yielding right now. The interest rate on I Bonds is adjusted to reflect the inflation rate every 6 months. At certain points, the Treasury department will also sell I-bonds that have a second additional fixed interest portion to the I-Bond’s yield, however as of right now this fixed interest portion is set at 0% so any I-bonds bought right now are tied directly to the inflation rate only. Unlike TIPS securities sold by the Treasury department, the principal of an I-Bond stays fixed (TIPS lose value when deflation occurs). The interest rate on an I-bond will never go below 0% in the event of deflation. I-Bonds can be purchased directly from the US Government via its TreasuryDirect website.
So, as with anything on here, the question becomes, what’s the catch? There is in fact a limit on the amount of I-Bonds you can purchase, $10,000 in electronic I-bonds per year can be bought through the government’s treasury direct website. You can also separately buy up to $5,000 in paper I Bonds by electing on your tax return to receive your tax refund in I-Bonds. Finally, and most importantly, you must hold I-bonds for at least 1 year prior to being able to cash them in and any I-Bond redeemed prior to 5 years from the date of issue loses the three months of interest preceding the redemption. Unlike some other treasuries, the bonds also cannot be resold to other investors. I do not currently hold any series I Bonds.
Submitted February 15, 2022 at 03:28PM by ScipioAtTheGate
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