Nearly risk-free I bonds to deliver a record 9.62% interest for the next six months

Nearly risk-free I bonds to deliver a record 9.62% interest for the next six months

  • I bonds, an inflation-protected and nearly risk-free investment, will pay 9.62% through October 2022, the U.S. Department of the Treasury announced Monday.
  • “It’s a milestone for I bonds,” said Ken Tumin, founder and editor of DepositAccounts.com.
  • However, there are purchase limits, you can’t tap the money for one year and there’s a penalty for selling within five years.
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If you’re eyeing ways to fight swelling prices, I bonds, an inflation-protected and nearly risk-free asset, may now be even more appealing.

I bonds are paying a 9.62% annual rate through October 2022, the highest yield since being introduced in 1998, the U.S. Department of the Treasury announced Monday.

The hike is based on the March consumer price index data, with annual inflation growing by 8.5%, the U.S. Department of Labor reported.

“It’s a milestone for I bonds,” said Ken Tumin, founder and editor of DepositAccounts.com, who tracks these assets closely.

I bonds, backed by the U.S. government, don’t lose value and earn monthly interest based on two parts, a fixed rate and a variable rate, changing every six months.

While the variable rate is 9.62% through October 2022, the fixed rate remains at 0%, according to the Treasury.

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The only drawback to them is you are limited to putting $10K in them per calendar year. I put $10K in at the beginning of December and another $10K at the beginning of January.

I wish the limit was $100K.

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In. Looks like a parent can buy for a child and they have a separate $10k limit.

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How to buy I bonds

There are only two ways to purchase these assets: online through TreasuryDirect, limited to $10,000 per calendar year for individuals or using your federal tax refund to buy an extra $5,000 in paper I bonds. There are redemption details for each one here.

You may also buy more I bonds through businesses, trusts or estates. For example, a married couple with separate businesses may each purchase $10,000 per company, plus $10,000 each as individuals, totaling $40,000.

bond purchase limits per calendar year

Individuals

$10K

Married taxpayers

$20K

Paper bonds per tax return

$5K

Certain trusts and estates

$10K

Business entities

$10K

Note: Business entity purchases are electronic onlySource: TreasuryDirect

CNBC

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Cool about 40% of my TSP is i-bonds

Yea I had looked at these before when they were paying 7%. I’m not sure its even worth the paperwork effort for just $10,000 though. I’d be all over it for $50K or above.

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Lol @ inflation being 8%.

Seems like a waste of time to make $75/month through October

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Lol them having a cap is so ludicrous. You can tell they want to keep everyone at their specific wealth level.

Perfect example is how they are so upset about crypto, and creating regulations under the guise of “protecting you from predatory practices”

The US government is fucking evil.

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Do you have a better risk-free alternative?
You don’t.

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USDC has been paying 9% for a while now you boomers.

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Id rather invest the $10k into my own business. I don’t see the purpose of locking up $10k for 5 years to earn $75/month and lose value along the way(I believe inflation is in reality more than the 9% they’re paying)

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Is your business risk-free? And free from state taxes?

NOPE.

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Its not risk free but at least its not guaranteed to lose me money. Does anyone who lives in this country actually believe inflation is only 8.5%?

I know it is higher than that. But 9.62% is the best I can get on risk-free money so I am jumping on it.

I actually thought these were only one year until maturity. But it looks like you can keep putting in 10K per year.

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Correct. And they will most likely pay much higher interest than you will receive on a checking, money market, banking, or cd account.