Paying 7.12% through the end of this month, and likely to be very close to that or better for the next quarter after the recent inflation report.

[www.treasurydirect.gov]

The only silver lining on the inflation cloud.



Edited 2 time(s). Last edit at 04/13/2022 02:50PM by Acer.

If you look at their rate history chart, it's been between 7.12% and 7.3% since 2007.

And I'm suspicious of this paragraph;

"The composite rate for I bonds issued from November 2021 through April 2022 is 7.12 percent. This rate applies for the first six months you own the bond."

Bonds are not the great deal they used to be. They still have a certain security which in some cases is worthwhile, but, they're not a great earner.
If inflation hits 10, 15, 20%, then they may be a great deal again, though.

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Paul F.
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A sword never kills anybody; it is a tool in the killer's hand. - Lucius Annaeus Seneca c. 5 BC - 65 AD
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Good is the enemy of Excellent. Talent is not necessary for Excellence.
Persistence is necessary for Excellence. And Persistence is a Decision.
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Eureka, CA

thanks for the link.

max of $10k per year, right?

thumbs up.

rob

Can be held within IRA?

IBonds max $10k per year per person plus you can get your tax refund in iBonds. You can supposedly gift in excess of 10k per year, but I don’t fully understand the rule.

interest rate changes every 6 months on an iBond, you need to hold at least 1 year and can withdraw in the first 5 years with a 3 month interest penalty.

PaulF was incorrect about iBond interest rates since 2012. If you click on the link above, you’ll see interest rates were usually less than 1% for each 6 month period.

Yeah, you're not going to ride these into glory like Apple stock because normally they suck. This a near-term opportunity to place some cash until inflation calms down.



Edited 2 time(s). Last edit at 04/13/2022 01:09PM by Acer.

They're useful as a place to park your emergency funds with the correct strategy.

For example, if you already have adequate emergency funds set aside, in some account which pays something like % 0.3 or even worse, you could start slowly over the years putting money into i bonds with new money.

Once you hit the 5 year point with your first i bonds, you could start buying new i bonds with money that that makes up your current emergency fund that pays next to nothing and draw that down.

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Ammo
Can be held within IRA?

Nope. Sorry.

The iBond rate will change this month, so if you want one, and think the rate might go down, buy now.

‘ Today’s report showed that the CPI-U increased by 4.81% in the last six months (an annualized rate of 9.62%.) The 9.62% rate should be the I Bond inflation component that will be announced at the start of May. This is an increase of the current I Bond inflation component (7.12%). If an I Bond is purchased in April, you’ll get the current rate of 7.12% for six months followed by 9.62% for six months. That’s a 12-month average rate of 8.37%.’ from https://www.depositaccounts.com/blog/inflation-treasury-series-i-savings-bonds/

.....so is James......Bond.....very tasty.....

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_____________________________________

I reject your reality and substitute my own!

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Ammo
Can be held within IRA?

Nope. It is only available directly from the us treasury department. And NOT as an ira. One interesting wrinkle is that you take up $5k of a tax refund and buy. And that is in addition to $10k direct buy.
I am thinking this is more a place to stash an emergency cash fund. You do get penalized if you take it out early after the mandatory one year no-touch period. But that penalty is like most cds and is a loss of a month or two or three of interest. So the principal is guaranteed and not touched.



Edited 1 time(s). Last edit at 04/15/2022 11:31PM by pqrst.

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DeusxMac
The iBond rate will change this month, so if you want one, and think the rate might go down, buy now.

The inflation rate for the last six months is the component that is variable. And that rate has been accelerating and therefore is locked in. The only way it could go down would be if in the next 10 days, inflation rate dropped down to 2 or 3 percent. That would be gas price dropping by half since gas accounted for at least a half of the cpi increase for last couple of reports. Aww heck, until I read the news item, I had never heard of series I bonds. Just seemed interesting



Edited 1 time(s). Last edit at 04/15/2022 11:39PM by pqrst.

Just an update
the rate was announced today is 9.62%.