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US Treasury Series I Savings Bonds Inflation Rate Earnings (Nov '21 - April '22) EXPIRED

7.12% Interest
(Limit $10K/Year Per Person)
+951 Deal Score
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Note: This popular deal is still available.

U.S, Government Treasury is currently offering 7.12% Interest Rate in combined Fixed + Inflation Rate Earnings valid on newly issued Series I Savings Bonds purchased from November 2021 through April 2022. Limit of $10,000 / year in interest earnings per person.

Thanks to community member dn90003 for sharing this offer.

About this offer:
  • How do I buy a Series I bond?
  • What is a Series I bond? (source)
  • "A savings bond that earns interest based on combining a fixed rate and an inflation rate."
  • You may use Series I bonds to:
    • Save in a low-risk product that helps protect your savings from inflation
    • Supplement your retirement income
    • Give as a gift
    • Pay for education
    • Click here for more information about Series I Bonds
  • What interest does a Series I bond earn? (source)
    • A combination of a fixed rate that stays the same for the life of the bond and an inflation rate that is set twice a year.
    • For bonds issued from November 2021 through April 2022, the combined rate is 7.12%

Editor's Notes & Price Research

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Original Post

Written by
Edited January 25, 2022 at 03:44 PM by
Due to the very high level of inflation the US government is paying un unprecedented 7.12% interest on its Security I bonds. There is a limit of $10,000 per year per person.

https://www.treasurydirect.gov/in...glance.htm

There are quite a few articles around which share why this could be a potentially low risk investment with a high yield.

https://www.usatoday.com/story/mo...?gnt-cfr=1

You would have to create your own account through the Treasury Direct website and then link a bank account. You can additionally invest another $5K in paper bonds during the time you file your tax returns.

Please do your own diligence and invest at your own risk.
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Community Wiki

Last Edited by FancyKite319 April 28, 2022 at 10:06 AM
https://www.doctorofcredit.com/us...e-i-bonds/

How to buy: After registering and logging in, click on "BuyDirect" on the top menu bar. Check the "Series I" radio button.

Comparing Series EE and Series I Savings Bonds
https://www.treasurydirect.gov/in...arison.htm

Please note:
1. This 7.12% rate on I bond is for next six months only (April 2022).
2. If, in April inflation is higher than today, they will earn higher, if inflation is less they will earn less for next six months, so basically rate changes every six months based on inflation.
3. You can keep these for 30 years or withdraw earlier (see #4 below)
4. You need to wait for 1 year before you can withdraw
5. If you withdraw between 1 yr and 5 yr, you lose last 3 months of interest (see #2 above, so if based on inflation if interest it was paying was reduced, you lose reduced interest)
6. After 5 year, no penalty so you don't lose last 3 months of interest
7. No state taxes on distribution (as per my understanding)
8. If you used for certain causes (like education) and your AGI is below certain value, you don't pay Federal tax as well (as per my understanding)
9. Buy at the end of month (on the 30th of a 31-day month, or 29th of a 30-day month), interest starts accruing from the 1st of the same month.
10. Interest rate can go down to 0% but not lower. This happened in 2009 during deflation.

Purchasing for others - https://slickdeals.net/f/15497017-us-treasury-series-i-savings-bonds-inflation-rate-earnings-nov-21-april-22-7-12-interest-limit-10k-year-per-person?p=152307841#post152307841

FAQs Concerning the Change in the Annual Purchase Limit for Savings Bonds [treasurydirect.gov]

Buy I Bonds as a Gift: What Works and What Doesn't [thefinancebuff.com]

Historical bond rate chart:
https://www.treasurydirect.gov/in...eChart.pdf
Nov 2021 7.12%
May 2021 3.54%
Nov 2020 1.68%
May 2020 1.06%
Nov 2019 2.22%
May 2019 1.9%
Nov 2018 2.83%


One trick to max out these I bonds: Overpay your estimated taxes now, by at least $5000, and then you can apply your refund of up to $5000 to buy $5000 more of I bonds, so it brings your total per year up to $15,000. The $5000 will come as paper I bonds, but you can mail them to the Treasury and convert them into electronic bonds.

Track inflation and iBond here
Update Apr 2022
[wordpress.com]
About this offer:
  • How do I buy a Series I bond?
  • What is a Series I bond? (source)
  • "A savings bond that earns interest based on combining a fixed rate and an inflation rate."
  • You may use Series I bonds to:
    • Save in a low-risk product that helps protect your savings from inflation
    • Supplement your retirement income
    • Give as a gift
    • Pay for education
    • Click here for more information about Series I Bonds
  • What interest does a Series I bond earn? (source)
    • A combination of a fixed rate that stays the same for the life of the bond and an inflation rate that is set twice a year.
    • For bonds issued from November 2021 through April 2022, the combined rate is 7.12%
    • On May 1, 2022, the rate is scheduled to update, and is expected to be over 9%. Source 1 [cnbc.com] Source 2 [tipswatch.com]
How to buy: After registering and logging in, click on "BuyDirect" on the top menu bar. Check the "Series I" radio button.

This post can be edited by most users to provide up-to-date information about developments of this thread based on user responses, and user findings. Feel free to add, change or remove information shown here as it becomes available. This includes new coupons, rebates, ideas, thread summary, and similar items.

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Questions & Answers BETA
aerobe asked this question on 12-12-2021 at 12:59 PM
12-12-2021 at 01:23 PM
Less potential upside, but essentially no potential downside. If the market crashes and inflation falls to nothing, you're no worse off than when you started. If the market starts exploding and inflation snowballs, you won't be as well off as if you were in the S&P, but you'll still see significant growth.
12-12-2021 at 02:33 PM
nevermind, I am not an investment professional.
12-12-2021 at 11:21 PM
It's not. It's much worse.

Literally every single one of you should just dump any cash you don't need access to near term (<2-3 years) into an ETF that tracks the overall market like Vanguard's VOO or VTI.
12-13-2021 at 01:32 PM
Better in what way? There is no risk. If you put $10,000 in right now you'll have at least +$356 in a year. Possibly more if inflation continues. With the S&P, you could be waiting years just to make your money back if there's a crash. It took 6 years for the S&P to recover after the Great Recession. If you can wait 10 years, that's fine but it's a risk.
12-15-2021 at 04:49 AM
Not every dollar should be allocated to equities, I think this is perfect for people's emergency savings.
Wyvern1 asked this question on 12-13-2021 at 01:44 PM
12-13-2021 at 01:44 PM
No, these are govt bonds. They stay in the treasury. I bonds are based on the rate of inflation. They have a fixed rate plus the current rate of inflation. Inflation goes up, you earn more. It was 3.54%. Rates went up on 11/1. To realize the full benefit you need to buy before the rates change on 5/1 and 11/1. No fees or penalties. Hold for a min.of a year. If you cash out in less than 5 years you forfeit 3 months interest. After 5 years, you don’t pay anything. You can only buy $10k/yr and then up to an additional $5k if purchased directly from your tax refund.
I bought $10k in denominations of 2,3, 5 so if I want to cash out I can do it in chunks instead of having to cash out $10k.: Better than any CD or bank rate if you want to stay in cash.
12-13-2021 at 01:44 PM
No. Govt inly
12-13-2021 at 01:44 PM
​No, they must be kept at treasury direct.
12-13-2021 at 01:44 PM
No. i-series bonds are either paper, or held on treasurydirect.gov
12-13-2021 at 02:21 PM
webbiedo, excellent idea!
sixty asked this question on 12-15-2021 at 04:26 PM
12-15-2021 at 04:26 PM
Why buy apples over oranges or a Chevy over a Ford? There's no right answer. And I really hope you're not expecting one on a deal site.

I used to be all stocks all the time until my financial advisor convinced me to diversify. It annoyed me to no end to be honest. But my portfolio has survived the 2008 downturn, enjoyed the rebound, survived the 2020 debacle and continue to enjoy the bull market. Diversification is important for any portfolio, more as you hit your 40s and 50s. But everyone's situation is different. Some people are swimming it cash, some are counting every penny.
12-15-2021 at 04:26 PM
It's not one or the other. You can buy both.

One should not compare I-bond with equity or crypto. It should be compared against other debt/bank products such as HYSA, CD.
12-16-2021 at 12:38 AM
One provides a "guarantee of the principal" (*1) , the other does not.

(*1) presuming the US Government does not default on its bonds. But if it does then everyone and the entire world, including the SP500, will have a much much bigger problem to worry about...

In other words, if you put let's say $1000 you are guaranteed to be able to withdraw the principal ($1000) at any time, and in the worst case you will lose some profit (interest).
With SP500 you might lose quite a lot from the principal and there is no guarantee that when you need those $1000 you will be able to get them back (e.g. if a recession happens and the market crashes).

It is a matter of risk preference.
12-18-2021 at 08:39 AM
Simple answer: ibond is risk free and sp500 is not. You won’t lose your principal investing ibond. In Sp500 you could lose 30% in a month (March 2020).

However ibond has no liquidity for a year, and spy can be redeemed daily.

And expected return for spy is higher given the risk.

I buy ibond with cash that’s sitting in my checking acct, not with brokerage account, where certain % of savings are in stock investment depending on my risk appetite.
01-25-2022 at 09:40 AM
Well, because the market doesn't always go up.
shahchittal asked this question on 12-12-2021 at 03:36 PM
12-12-2021 at 04:56 PM
Yes, absolutely.
12-12-2021 at 07:10 PM
Depends if you need easy access to the money. If it is a long term investment you don't need for 1+ years, then this is a good option. If that is part of an emergency fund, or money for if you lost your job, then you need something more liquid like a 0.5% savings account or ultra conservative ETF.
12-15-2021 at 03:07 PM
Not sure what you mean CrimsonRose733, this is liquid. You can cash it in any time, you just lose the last quarter's dividends at most.
01-03-2022 at 06:25 PM
Can not cash anytime.. at least after a year..
j4stall asked this question on 12-12-2021 at 02:05 PM
12-12-2021 at 04:27 PM
You are locked in for 1 year. Between 1 year and 5 year, you can redeem with 3 month interest penalty. After that you can redeem penalty free. You earn interest for 30 years but don't have to redeem after 30 years exactly too.
12-13-2021 at 02:23 PM
thcheat, where did you see the 3 month penalty?
12-15-2021 at 07:41 AM
It’s not a “penalty” in the sense that they are not taking money from you, it’s just you would forfeit the interest from they 3 month period. Essentially they pay interest quarterly and if you take the money out at 2 months and 29 days into the quarter It’s the same as taking it out at 1 day into into the quarter, which is to say you earn 0% that quarter.
01-25-2022 at 05:46 AM
Easy to cash in….just go to any bank! They will cash bonds and let you and the IRS know how much interest money was earned. You will have to declare interest as income and may have to pay tax on it.
StevenL9483 asked this question on 12-13-2021 at 01:22 PM
12-13-2021 at 01:22 PM
Both have inflation protection but they operate differently. Higher inflation rate increases interest rate on I-bond. It increases the face value of TIPS. The latter is closer to to a standard coupon bond.
12-13-2021 at 01:22 PM
Also keep in mind that I Bonds have deflation protection. That is not something you get with TIPS. I know that inflation is the main issue now, but we have had deflation in the past.
12-17-2021 at 04:33 AM
You only make money in TIPS, if inflation is higher than what the market thinks it will be at the time you bought it. You can search for the TIP implied inflation expectation rate . The I series is better in that you don't have to be smarter/luckier than professionals. It's also lower limit bounded by 0% (in the unlikely event of deflation)

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Looks tempting. But these are only rated for inflation as fixed rate is 0%. Once inflation is back down, your rate will go down with it.
In case you're wondering, here's how the rate is computed:
Composite rate =
No, these are govt bonds. They stay in the treasury. I bonds are based on the rate of inflation. They have a fixed rate plus the current rate of inflation. Inflation goes up, you earn more. It was 3.54%. Rates went up on 11/1. To realize the full benefit you need to buy before the rates change on 5/1 and 11/1. No fees or penalties. Hold for a min.of a year. If you cash out in less than 5 years you forfeit 3 months interest. After 5 years, you don't pay anything. You can only buy $10k/yr and then up to an additional $5k if purchased directly from your tax refund.
I bought $10k in denominations of 2,3, 5 so if I want to cash out I can do it in chunks instead of having to cash out $10k.: Better than any CD or bank rate if you want to stay in cash.
By the way, using your tax refund to purchase bonds won't count toward your $10k yearly limit.

https://www.treasurydirect.gov/in...eature.htm

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12-12-2021 at 07:11 AM
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#5
Have fun with the website, especially putting in your password. It's not a scam, just a gov built website from long ago.
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#6
can we transfer these to a brokerage?
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#7
Better link, takes you to the page explaining Series I bonds.
https://www.treasurydirect.gov/in....htm#irate
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#8
Thx op but Holy #*×!

7% on a tbill?! Causes me to really worry about inflation!
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#9
By the way, using your tax refund to purchase bonds won't count toward your $10k yearly limit.

https://www.treasurydirect.gov/in...eature.htm
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#10
Looks tempting. But these are only rated for inflation as fixed rate is 0%. Once inflation is back down, your rate will go down with it.
In case you're wondering, here's how the rate is computed:
Composite rate = [fixed rate + (2 x semiannual inflation rate) + (fixed rate x semiannual inflation rate)]
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#11
Low risk? How about NO risk? The US government has never defaulted on a security, like, EVER. Its value might go down over time so there's a secondary market risk, which is true of nearly any security, plus the rate appears to be floating so you lock in nothing, but the underlying security itself is as safe as it gets.

That said, 7%? When did that happen in an era of near-0% prime rates?
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Quote from KMan :
Low risk? How about NO risk? The US government has never defaulted on a security, like, EVER. Its value might go down over time so there's a secondary market risk, which is true of nearly any security, plus the rate appears to be floating so you lock in nothing, but the underlying security itself is as safe as it gets.

That said, 7%? When did that happen in an era of near-0% prime rates?
that's the type of thinking we had with real estate pre 2008. LMAO
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#13
Quote from TomHagen :
Have fun with the website, especially putting in your password. It's not a scam, just a gov built website from long ago.
It's funny, you can edit the HTML code in Chrome dev tools to allow you to type into the password field.
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Quote from sdpoker :
Looks tempting. But these are only rated for inflation as fixed rate is 0%. Once inflation is back down, your rate will go down with it.
In case you're wondering, here's how the rate is computed:
Composite rate = [fixed rate + (2 x semiannual inflation rate) + (fixed rate x semiannual inflation rate)]
technically it is less if you consider the taxes you have to pay.
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