Series I Savings Bonds

danbrennan

Veteran Member
Lifetime Gold Member
Mar 13, 1999
4,673
Brighton, MI
I don't think I've heard of these before. I guess when inflation was low, they weren't that important.


"A solution is I-Bonds, which are U.S. savings bonds whose yields are adjusted by the prevailing inflation rate. Specifically, their yield is adjusted twice a year—in May and November—according to the Consumer Price Index’s trailing 6-month change. Its current yield, set last November, was 7.1% (twice the CPI’s change from April to September last year)."

"Based on this week’s inflation report, this yield should be set at 9.6% on May 1 (twice the CPI’s change from October through March). The Treasury Department should announce the new rate in the next few weeks."

"I’ve written about I-Bonds before, and I refer you to that column for several important details. You can’t purchase an unlimited quantity of these I-Bonds, for example, and you can’t purchase them in an IRA. But you are allowed to purchase $10,000 of such bonds each year ($20,000 per married couple) and an additional $5,000 per year with your tax refund. A strategy of buying the maximum amount each year over a long period results in a sizable fixed-income allocation—big enough to satisfy the asset allocation requirements of all but those with a very large net worth."
 

Smokin'Joe

Veteran Member
Lifetime Gold Member
Aug 14, 2008
944
Texas
I must have seen a similar article, as I was reading about these earlier today. If I read it correctly, these are 30 year bonds and the interest rate is adjusted 2 times annually so although the interest rate is at 9.6% now, Is it correct to assume that if we get back to normal in a few years, the interest rate could fall back down to only a few percent ? Also, I did not learn what happens if you need to cash them out in 10-15 years ?


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tom3

Veteran Member
Aug 1, 1999
14,349
ohio
Interesting stuff. Getting a 9% return these days sounds pretty attractive for sure. And now easy to buy and sell online direct with the US Treasury. Now if I only had some cash buried somewhere. Cashing in early forfeits 3 months interest?
 

Jimmac

Veteran Member
Dec 24, 2013
774
tucson az
they are 5 year bonds, cant cash them for 1 year. then 1 to year 5 if you cash them you get penalized the interest of the last 3 months. each person can buy up to 10k a year, and up to 5000 of your tax refund. it can never go below 0.
we bought last December and buying again tonight. jim
 




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