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expired Posted by dn90003 • Dec 12, 2021
expired Posted by dn90003 • Dec 12, 2021

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

(Limit $10K/Year Per Person)

7.12% Interest

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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

Written by BostonGirl
Refer to the forum thread here for more information and details.

Original Post

Written by dn90003
Community Notes
About the Poster
Deal Details
Community Notes
About the Poster
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

Written by BostonGirl
Refer to the forum thread here for more information and details.

Original Post

Written by dn90003

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Top Comments

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

3,498 Comments

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Dec 12, 2021
1,183 Posts
Joined Mar 2005
Dec 12, 2021
acegolfer
Dec 12, 2021
1,183 Posts
Quote from EagerSink8831 :
Does the $10k limit apply to each individual separately? If you are filing taxes jointly and have a child, can you invest $10k in each name = $30k total?
Yes. But if you buy $10k for the kid, it's their money no longer yours to spend.
Dec 12, 2021
214 Posts
Joined Dec 2008
Dec 12, 2021
SarhoshAmiral
Dec 12, 2021
214 Posts
Quote from thehash :
that's the type of thinking we had with real estate pre 2008.
There is no safe investment if US government defaults on these bonds. Any foreign currency would also be impacted big time by such an event. Bitcoin or likes wouldn't be safe either.

So for all practical purposes, one should assume US government will not default.
Dec 12, 2021
7,483 Posts
Joined Sep 2008
Dec 12, 2021
DogAndPony
Dec 12, 2021
7,483 Posts
Quote from acegolfer :
partially correct. The new 6-mo interest rates are determined in April and October. But the rate on your i-bond gets updated at every 6 month anniversary by the prevailing rate. For example, if you bought it in 9/1/2021 when the rate was 3.54%, your 6-mo rate is 3.54% till 02/2022. Then in 3/1/2022, it updates to 7.12%. It doesn't get updated to 7.12% in 11/2021.

Okay cool. So I'm guaranteed the 7.12% for at least six months. And I'd guess the rate would be similar at the next update (unless they get inflation under control which doesn't seem likely)
Dec 12, 2021
536 Posts
Joined Nov 2005
Dec 12, 2021
Pinchy
Dec 12, 2021
536 Posts
Quote from tivoboy :
Don't confuse THIS bond with YOUR bond.. THIS bond which anyone can purchase will earn that rate through End of March, 2022. That's it, and it will reset in April 2022.. just because one buys THIS bond in December 2021, does not mean that the rate isn't going to reset in April 2022 it will for everyone of THIS bond. The pricing for THESE bonds is SET twice a year, regardless of when who buys them. Another way to look at the example is, if one buys THIS bond in Jan 2022, one doesn't keep the rate (the rate now) till the end of July 2022.. the inflation adjusted rate will adjust in April 2022 come hell or high water. Up or down.

And, remember one has to hold them AT LEAST 12 months, so if the inflation number goes to 0%, you can't just cash them out in six months. Also, if you sell them between I think 12 months and 60 months, whatever the period you don't accrue the last 90 days of interest. So, there is essentially a 60 month holding period in order to get any full months/years of interest accrual. So, just be informed.
Good info.

Below is some information directly from TD.gov


Rates & Terms

I bonds have an annual interest rate derived from a fixed rate and a semiannual inflation rate.
Interest, if any, is added to the bond monthly and is paid when you cash the bond.
I bonds are sold at face value; i.e., you pay $50 for a $50 bond.
More about I bond rates

Redemption Information

Minimum term of ownership: 1 year
Interest-earning period: 30 years or until you cash them, whichever comes first
Early redemption penalties:
Before 5 years, forfeit interest from the previous 3 months
After 5 years, no penalty
More about redemption of I bonds
Dec 12, 2021
2,568 Posts
Joined Nov 2011
Dec 12, 2021
Taint
Dec 12, 2021
2,568 Posts
Quote from sd8384 :
Exactly! People are spending money like there is no tomorrow which is causing high inflation. This is government's way to incentivize people to start saving and taking the money out of circulation to reduce inflation. It is good effort in my opinion - a controlled implosion is coming (a drastic interest rate hike or fed abruptly stop buying securities etc..) to set system right otherwise inflation is here to stay for 3-5 year
Clearly, you don't understand inflation in the slightest bit. Why would you post?

"People" can spend as much money as they want. As long as the money supply stays the same, there will be no impact to inflation. The current inflationary period began when the government started printing money like there's no tomorrow.
1
Dec 12, 2021
536 Posts
Joined Nov 2005
Dec 12, 2021
Pinchy
Dec 12, 2021
536 Posts
Quote from Taint :
Clearly, you don't understand inflation in the slightest bit. Why would you post?

"People" can spend as much money as they want. As long as the money supply stays the same, there will be no impact to inflation. The current inflationary period began when the government started printing money like there's no tomorrow.
Education are expensive nowadays. Please be nice…
Dec 12, 2021
252 Posts
Joined Oct 2015
Dec 12, 2021
moops1
Dec 12, 2021
252 Posts
Btw treasury direct says you can open an account for your kids too. How do taxes work on these bonds - do u pay when you sell? Don't want to file taxes for the kids for now

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Dec 12, 2021
1,880 Posts
Joined Aug 2009
Dec 12, 2021
Livesai
Dec 12, 2021
1,880 Posts
Quote from SarhoshAmiral :
There is no safe investment if US government defaults on these bonds. Any foreign currency would also be impacted big time by such an event. Bitcoin or likes wouldn't be safe either.

So for all practical purposes, one should assume US government will not default.
Its safer than an inflationary asset. 7% is nothing compared to 22% USD printed in 2020 alone...
Dec 12, 2021
415 Posts
Joined Sep 2007
Dec 12, 2021
Bobmuhthol
Dec 12, 2021
415 Posts
Quote from Taint :
"People" can spend as much money as they want. As long as the money supply stays the same, there will be no impact to inflation.
That's not at all how inflation works.
Dec 12, 2021
251 Posts
Joined Nov 2015
Dec 12, 2021
Babaice
Dec 12, 2021
251 Posts
Basically if you deposit $10000 for one year you get Iphone 14 free next year
Dec 12, 2021
415 Posts
Joined Sep 2007
Dec 12, 2021
Bobmuhthol
Dec 12, 2021
415 Posts
Quote from moops1 :
Btw treasury direct says you can open an account for your kids too. How do taxes work on these bonds - do u pay when you sell? Don't want to file taxes for the kids for now
Yes, you can report the lifetime interest and pay the tax in the year you redeem the bond.
Dec 12, 2021
916 Posts
Joined Jun 2007
Dec 12, 2021
Kissimmeegal
Dec 12, 2021
916 Posts
Quote from TomHagen :
Sounds like you should have sent an attorney for estate planning BEFORE his death
Yep, too bad we can't all be as in-the-know about finance as you are. And kind and compassionate to boot.
Dec 12, 2021
430 Posts
Joined Jun 2020
Dec 12, 2021
drpedicle2
Dec 12, 2021
430 Posts
Locked in your money. Naaa
3
Dec 12, 2021
916 Posts
Joined Jun 2007
Dec 12, 2021
Kissimmeegal
Dec 12, 2021
916 Posts
Quote from CleverString959 :
We had the same issue when my dad passed away with paper bonds though. It's not easy to transfer them.
So sorry. It is difficult enough dealing with your grief and everything else when someone passes. Well, live and learn.

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Dec 12, 2021
1,585 Posts
Joined Dec 2007
Dec 12, 2021
ponagathos
Dec 12, 2021
1,585 Posts
Quote from sd8384 :
Exactly! People are spending money like there is no tomorrow which is causing high inflation. This is government's way to incentivize people to start saving and taking the money out of circulation to reduce inflation. It is good effort in my opinion - a controlled implosion is coming (a drastic interest rate hike or fed abruptly stop buying securities etc..) to set system right otherwise inflation is here to stay for 3-5 year
Ha! The rate on these is zero. Inflation is the only reason the return is anything other than zero. If the government was interested In Getting people to save, they would not have held interest rates at basically zero dor so long. The Fed benefits when rates are low because it keeps interest payments on the national debt low.

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