Inflation is crazy right now, but there are ways to fight it.
This is not an advertisement for anything. I just want to give you valuable information. I have purchased Series I Savings Bonds recently, and here’s why…
Series I Savings Bonds are offered by the US Treasury and are currently paying 9.62% interest! You can buy up to $10,000 worth per year. It’s exceptionally rare to get this high of guaranteed return on something as safe as a US Treasury-backed bond. A lot of people don’t know about this option, so I wanted to share.
Briefly, the Series I Bond’s interest rate is determined by a fixed rate they set once per year and the inflation rate. The bond rate is 9.62% right now because inflation is crazy high.
They recalculate the rate every 6 months, so you’re guaranteed the 9.62% rate for at least 6 months (if you buy before October 2022). Another cool thing is that it compounds semi-annually, so all the interest you make in the first 6 months will itself earn interest in the next 6 months, and so on.
Important: You must hold this bond for at least one year. This is for money you don’t need that is getting crushed by inflation in a checking or low-interest savings account.
You can hold this bond up to 30 years if you want. If you cash out before 5 years, you lose the last 3 months of interest, which isn’t bad. You get 0% interest in a checking account anyway, so you’re not losing anything. Cashing out between years 5-30 is ideal because you get to keep all of your earned interest. So basically this is a very good option right now for money you won’t need in a year, and a great option for money you won’t need for several years.
Above all, this investment protects your money against inflation. The Fed has been slow to react and seems behind on stopping inflation, and they are going to have to worry about causing a recession or worse by hiking rates, so it’s possible that inflation stays high for a while. We’ll see.
You’ll have a lot of flexibility with the iBond after one year, so I think this is a great idea for those who are saving cash that isn’t earning interest. This isn’t financial advice, even though I have a finance degree and recommended Bitcoin in 2020 (confirmed genius). Do your own due diligence and carefully consider your financial situation.
To buy these bonds…
- Create an account with the treasury (treasurydirect.gov)
- Log in
- Select “BuyDirect.”
- Scroll down to Savings Bonds > Series i.
- Select the amount you want to buy
- Enjoy your sweet 9.62% interest!
