Posted on 05/04/2022 5:53:12 PM PDT by PJ-Comix
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.
(Excerpt) Read more at cnbc.com ...
Municipal bonds, Ted. I’m talking double-A rating. The best investment in America.
Rate?
You win.
L
In inflationary times, short bonds are generally better. You don’t want to be stuck with 9.62% bonds when 22% bonds are calling out to you.
Having said that,any paper is suspect.
Tangible items, long discussed here, are preferred.
How do I buy some? I have some investment funds
You can buy up to 10K per person per year. You have to hold them at least one year. Interest is adjusted biannually, and can go down as well as up. If you cash them in before five years, you forfeit a three months of interest. Given the prospects for the economy the next five years, it seems hard to beat, high interest with the only risk being the total crash of the governments ability to pay interest. Not likely no matter how bad Biden makes it.
Treasurydirect.gov. They are indexed to the inflation rate.
Your still losing money. It’s not keeping up with real inflation.
Seriously, even if inflation drops to 0% for the next 6 month (hah!), you will get an interest rate of 4.81% for the year. You can't beat that on a one year CD. I have some from 20 years ago which have a fixed portion of 3%, so I have a total rate of 12.76% for six months.
The maximum you can invest is $10k/year (you actually can go up to $15k if you include your tax refund, but lets keep it simple: $10k max).
You'd need to sign up for an account at tresurydirect.gov.
You can't purchase the i-bonds through regular brokers.
You'd need to hold the bond for a minimum of 1 year. You'd need to hold it for at least 5 years without forfeiting 3 months of interest (i.e., even if you reimbursed the bond after holding it for the minimum of one year, you'd still make more money had you held it in the bank. Even with forfeiting 3 months of interest).
You're losing even MORE if you keep it in the bank or in CDs.
Setting up the account and the ability to transfer between the treasury account and your bank account can be a pain. I had to get a "medallion stamp" from the bank (one step up from a mere notary stamp).
Bills, notes, bonds is the maturity order. Bills are less than 2 years, notes 2 to 10, and bonds 15 and out.
That’s why I don’t
bump
I remember how the medallion banker, while eyeing his big fat pen, asked how much $ he was stamping for.
Bravo!
Just a few years ago, my IRA warned me that the portion of my fund that was in inflation-proof bonds was losing money because the fees were greater than the interest on the bonds.
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