I-Bonds
Investing
February 28, 2022
Given the current low interest rates and record setting inflation, many investors are looking for different ways to earn interest on their more liquid assets.
Enter the I bond.
A relatively unheard-of Treasury Department offering, the I-Bond is unique in that it’s rate is based on a combination of “Fixed Rate” and “Inflation Rate” to come up with it’s “Composite Rate”. The current “Composite Rate” the bond is paying is a whopping 7.12% annualized.
With any deal potentially this good, there are a few caveats and limitations investors should be aware of:
- $10,000 annual purchase limit per person
- It must be held for a minimum of 12 months
- To get the current 7.12% annualized rate, the I-bonds must be purchased before May 1, 2022
- The current rate is entirely comprised of the “Inflation Rate” portion of the composite, leaving no guaranteed “Fixed Rate” to fallback on if inflation goes back down to manageable levels
- New composite rate calculated every 6 months
For more information on I Bonds visit:
https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm
https://www.kitces.com/blog/federal-series-i-savings-bonds
We are always happy to schedule a time to speak with you if you have any questions about I Bonds and how they might work for you.
