Treavor Dodsworth CFP®, CPA, CKA®
#135 - Series I Savings Bonds (2)
In December of last year, I wrote about Series I Savings Bonds. I wanted to highlight them again because if you want to lock in the current rate you must purchase by the end of April. Also, we now have projections of what the rate could be for the second six months. To start, a quick overview.
Series I Savings bonds have an interest rate that is determined by a fixed rate and inflation rate (currently 7.12% if you purchase before the end of April). This rate will stay the same for the first 6 months after a bond is purchased. At which point the rate will be recalculated (we don't know for sure yet but per the article below it may be as high as 9.62%). Those are yearly rates so if you purchased $10,000 you would have about $850 of interest after one year.
There is a limited amount you can purchase. Generally speaking, $10,000 per person per calendar year though there are several ways to purchase more (reach out if you are interested in purchasing more).
The bonds have to be held for at least 12 months. If you sell between 12 months and 5 years, you have a penalty of the last three months of interest.
The bonds are exempt from state and local taxes (I am not aware of any exceptions to this but there may be).
Given the limited purchase amount, it is unlikely these bonds are going to dramatically improve someone’s financial situation but they are intriguing. I will admit I did purchase some for myself this past week. You can learn more at the Treasury Direct website. Happy Easter! He Is Risen! A simple phrase that has changed and will continue to change my life. It is in him I place my hope.
Interesting Article(s) or Video(s)
CNBC - Rising inflation may increase yearly rates for I bonds. Here’s what to know
Per this article, the I Bonds yearly rate could go up to 9.62% for the six months starting in May (the actual rate has not been announced yet).
Thank you for reading!