December 21, 2021
S&P 500 4,633
10-Year Treasury 1.48%
Dear Clients and friends,
A close friend of mine introduced me to I bonds this past weekend. I thank him for the excellent idea. We can NOT help you purchase these I 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, and plan to do the same next month.
Series I Savings Bonds are currently paying 7.12%. 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. It is my understanding, and I could have read the site incorrectly, but you are guaranteed a minimum rate of doubling your money in 20 years. Using the Rule of 72, that equates to 3.60% (72/20 years = 3.6).
Here are some other tidbits:
- The interest is compounded semiannually.
- 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.
- The interest on I bonds is a combination of a fixed rate, and an inflation rate.
- Fixed rate: You know the fixed rate of interest that you will get for your bond when you buy the bond. That fixed rate does not change during the life of 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.
- 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. I am fairly certain, but you would have to verify yourself, that the minimum rate over 20 years would be 3.6%.
- The above should not be taken as investment advice. I am merely sharing some information.
- Thank you to my good friend for pointing this out to me.
- The 10 Year US Treasury is currently yielding 1.40%.
- 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.
We hope you are and remain healthy and safe. Merry Christmas and Happy Holidays!
REDFIELD, BLONSKY & STARINSKY, LLC
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