US Savings Bonds (series I) are paying an eye-popping 9.62 percent. You may purchase up to $10,000/year in savings bonds. I wrote about this in December when the series I bonds were paying 7.12% – but as of May 1, it went up by 2.50%!
I love money. Earning it, saving it, helping others get it, whatever. It just makes me happy.
Be careful though, to buy the series I bonds. EE bonds are simply a set interest rate, and it’s paltry. As of now, its 0.10%. That’s not even worth the effort and it’s sure as hell not worth it given the redemption penalty. I may as well go to my local credit union and stuff it in a savings account – at least there I can withdraw it next week if I want.
On the other hand, series I bonds are inflation-indexed bonds – they’re a combination of a base rate and an amount which is determined based on inflation – which is why they’re paying such a high amount right now. The bonds they’re selling now have a 0% base rate (yikes!) but the inflation portion of the interest rate is what makes it so amazing, paying an astonishing 9.62%.
FINE PRINT: this interest rate is only guaranteed through October 1, as they reset the interest rate every six months. At that time, the interest rate on the series I bonds reprices, based on inflation – so you could, conceivably, get zero return for your money at that time. This means you should be checking the current interest rate twice a year to make sure you’re still happy with what they’re paying.
You cannot withdraw your investment for the first year (unless the government declares a disaster or something in your area). After that, for years 2 – 5 you pay a penalty of three months’ interest if you withdraw your deposit – but even then, if you had to pay three months of an annual rate of 9.62%, you’re still getting a return of 7.21%.
Also, you can only invest $10,000 per person per year (you can sink in another $5K if you buy them directly through your tax return) – but you can also invest as little as 50 bucks.
If you go to https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_ifaq.htm you can read all the FAQ – starting up an account only takes 10 minutes or so. For almost 10% return in a government insured investment, it’s incredible
ExaminingMisadventures 