This is an email we sent on June 3, 2022. If you would like to sign up for our emails, please do so on our home page.
June 3, 2022
S&P 500 4,116
10-Year Treasury 1.48%
Dear Clients and friends,
We are updating an email we sent last December. We can NOT help you purchase these Bonds. You can set up an account at https://www.treasurydirect.gov/ if you would like to purchase these. I have personally set up an account for me, and Kim (my wife) did the same. We funded it with the maximum $10K per person, for both 2021 and 2022. I expect us to fund it every year assuming I have the access to capital, and if the interest rate stays favorable.
Series I Savings Bonds are currently paying 9.62% through October 2022. You can only buy through US Treasury Direct. There is a $10K annual maximum purchase per person, per year. Yet, inflation could plummet, and these bonds would pay less in the future if that were to occur. Of course, vice versa could happen. We previously mentioned that in 30 years there is a minimum percentage of interest that would be collected. We either made an error, or that is no longer mentioned on the Treasury website.
The interest you earn is taxable for Federal income tax, and not taxable for State and local income tax. Interest is earned on the bond every month. The interest is compounded semiannually: twice a year, the interest the bond earned in the previous six months is added to the bond’s principal value; then, interest for the next six months is calculated using this adjusted principal. The interest and principal are paid to you when you cash the bond.
Here is a link to the Treasuries explanation to I Bonds. https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_ibuy.htm
We can NOT help you purchase these. You can set up an account at https://www.treasurydirect.gov/ if you would like to purchase these.
Here are some other tidbits:
1. The interest is compounded semiannually.
2. You can redeem the bond after 12 months. However, if you redeem the bond before it is five years old, you lose the last three months of interest. For example, if you cash an I bond after 18 months, you get the first 15 months of interest.
3. The interest on I bonds is a combination of a fixed rate, and an inflation rate. A new rate will be set every six months based on this bond’s fixed rate (0.00 percent) and on inflation.
4. Fixed rate: You know the fixed rate of interest that you will get for your bond when you buy the bond. Treasury announces the fixed rate for I bonds every six months (on the first business day in May and on the first business day in November). That fixed rate then applies to all I bonds issued during the next six months.
5. Inflation rate: Unlike the fixed rate which does not change for the life of the bond, the inflation rate can and usually does change every six months.
6. The above should not be taken as investment advice. I am merely sharing some information.
7. Thank you to my good friend for pointing this out to me. during December 2021.
8. The 10 Year US Treasury is currently yielding 2.96%.
9. We can NOT help you purchase these. You can set up an account at https://www.treasurydirect.gov/ if you would like to purchase these.
As always, please let me know if you would like to have a discussion to discuss finances or
If you have any concerns, please reach out to me.
You can also follow us on twitter http://www.twitter.com/rbco as well as on Facebook http://www.facebook.com/RedfieldBlonsky .
REDFIELD, BLONSKY & STARINSKY, LLC
Ronald R. Redfield, CPA, PFS
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performance results of the S&P 500 Index. Whenever RBS performance is referred to, results
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