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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 15, 2021
376 Posts
Joined Dec 2007
Dec 15, 2021
James Mason
Dec 15, 2021
376 Posts
Quote from seasix :
Another member of the "stonks never go down" cult, good luck.
Maybe your young, I don't know. I'm 68. First bought stocks at DOW price of 6,300, now today they are hitting 35,000. Yes, there are ups and downs, but in the long run, stocks have done really well. One more thing, DON'T sell your stocks when you think the DOW will crash. I did that panic selling and I lost money. Learned the hard way. Anyway, go Chiefs, kinda like the Chargers too.
Dec 15, 2021
285 Posts
Joined Nov 2006
Dec 15, 2021
rajma204
Dec 15, 2021
285 Posts
So, can I invest $150K to get the $10k in interest? Or can I only invest $10K per year?
Dec 15, 2021
5,963 Posts
Joined Jan 2008
Dec 15, 2021
Eagles89
Dec 15, 2021
5,963 Posts
Quote from James Mason :
Maybe your young, I don't know. I'm 68. First bought stocks at DOW price of 6,300, now today they are hitting 35,000. Yes, there are ups and downs, but in the long run, stocks have done really well. One more thing, DON'T sell your stocks when you think the DOW will crash. I did that panic selling and I lost money. Learned the hard way. Anyway, go Chiefs, kinda like the Chargers too.
Stocks have to return 7% more than usual to keep the risk adjusted return the same. I doubt that is going to happen. Sell your stocks and buy ibonds if you are smart.
Dec 15, 2021
27 Posts
Joined Jan 2016
Dec 15, 2021
apatlolla
Dec 15, 2021
27 Posts
you can potentially buy 40k+ worth. 10k limit is per account, not per person.
10k in your name
10k in spouse's name
10k in your business name and/or trust
10k in spouse business and/or trust

also, overpay your federal taxes and have surplus rolled into I Bonds when you file the tax returns.
Dec 15, 2021
1,606 Posts
Joined Jul 2019
Dec 15, 2021
Coffeelover696969
Dec 15, 2021
1,606 Posts
why am I being told that you have to hold these for 30 years? what happens if I need funds after 1 year?
Dec 15, 2021
304 Posts
Joined May 2018
Dec 15, 2021
HangryCheeto
Dec 15, 2021
304 Posts
Lots of bad advice here folks. This investment is not a replacement for stock indexes, real assets, or some highly speculative basket within your portfolio. This investment is an alternative to parking a small percentage of your portfolio into bonds or money markets, with the added benefit of some ballast against inflation.
Quote from Nattefrost :
Feds raising interest 3x next year won't it impact ibonds negatively?
The Fed's move is more aggressive in slowing inflation than some analysts expected, and this could reduce the future rate of return of this bond. The irony is, however, the Fed's action today means the Fed believes that inflation will continue on an upward trajectory. Therefore, the Fed's action actually validates the use of this investment (and other inflation hedges) as a small part of your portfolio in order to hedge against fears of future inflation.
Dec 15, 2021
1,183 Posts
Joined Mar 2005
Dec 15, 2021
acegolfer
Dec 15, 2021
1,183 Posts
Quote from Coffeelover696969 :
why am I being told that you have to hold these for 30 years? what happens if I need funds after 1 year?
That was a wrong advice. You can redeem (even partially) after 12 months. You forfeit the last 3 months of interest, which is negligible imo.

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Dec 15, 2021
2,484 Posts
Joined Nov 2014
Dec 15, 2021
WestCoastSDer
Dec 15, 2021
2,484 Posts
Quote from acegolfer :
That was a wrong advice. You can redeem (even partially) after 12 months. You forfeit the last 3 months of interest, which is negligible imo.
So if you put in $10k, you expect to get $712 after 12 months. But pulling out all the cash at the 1-year mark means you only get $10k + $712 - $178 (3 months of interest lost) = $10534 in total?
Dec 15, 2021
1,183 Posts
Joined Mar 2005
Dec 15, 2021
acegolfer
Dec 15, 2021
1,183 Posts
Quote from WestCoastSDer :
So if you put in $10k, you expect to get $712 after 12 months. But pulling out all the cash at the 1-year mark means you only get $10k + $712 - $178 (3 months of interest lost) = $10534 in total?
7.12% is only for 6 months. Nobody knows what the next 6 month rate will be. Assuming it's 7.12% again, then your math is almost correct. What you missed is the i-bonds are compounded semiannually. So in the 2nd 6 month, you will earn 3.56% of $10,356 (before penalty)
Dec 15, 2021
904 Posts
Joined May 2007
Dec 15, 2021
raionz
Dec 15, 2021
904 Posts
Quote from WestCoastSDer :
So if you put in $10k, you expect to get $712 after 12 months. But pulling out all the cash at the 1-year mark means you only get $10k + $712 - $178 (3 months of interest lost) = $10534 in total?
Incorrect still, the rate is revised every 6 months, no guarantee it'll stay at 7.12%. Regardless, even if it's zero, 3.5% beats all HYSA out there for emergency funds. This is not a get rich investment, treat it like a better place to place your rainy day money.
Dec 15, 2021
15,449 Posts
Joined Feb 2005
Dec 15, 2021
thund3rcat
Dec 15, 2021
15,449 Posts
Quote from Eagles89 :
Stocks have to return 7% more than usual to keep the risk adjusted return the same. I doubt that is going to happen. Sell your stocks and buy ibonds if you are smart.
LMAO
Dec 15, 2021
2,484 Posts
Joined Nov 2014
Dec 15, 2021
WestCoastSDer
Dec 15, 2021
2,484 Posts
Quote from acegolfer :
7.12% is only for 6 months. Nobody knows what the next 6 month rate will be. Assuming it's 7.12% again, then your math is almost correct. What you missed is the i-bonds are compounded semiannually. So in the 2nd 6 month, you will earn 3.56% of $10,356 (before penalty)
A couple questions.

1. Is the 3.56% return on $10356 assuming the $7.12% renews in April?
2. Let's assume the rate goes down to 6% even after April 2022, Will the money for the next 6 months grow at 6% and the compound of what I earned 6 months ago be at 3% or 3.56%?
Dec 15, 2021
2,436 Posts
Joined Feb 2006
Dec 15, 2021
johnec4
Dec 15, 2021
2,436 Posts
Quote from WestCoastSDer :
A couple questions.

1. Is the 3.56% return on $10356 assuming the $7.12% renews in April?
2. Let's assume the rate goes down to 6% even after April 2022, Will the money for the next 6 months grow at 6% and the compound of what I earned 6 months ago be at 3% or 3.56%?
To be sure, the 7.12% interest is annual, therefore, since that rate is only guaranteed for six months, that is why you're getting the 3.56% return. You'll get that return no matter what it does in April.

If the rate goes down to 6% in April, your return will be 3% of the new, compounded total.
Dec 15, 2021
1,183 Posts
Joined Mar 2005
Dec 15, 2021
acegolfer
Dec 15, 2021
1,183 Posts
Quote from WestCoastSDer :
A couple questions.

1. Is the 3.56% return on $10356 assuming the $7.12% renews in April?
2. Let's assume the rate goes down to 6% even after April 2022, Will the money for the next 6 months grow at 6% and the compound of what I earned 6 months ago be at 3% or 3.56%?
OP assumed 7.12% for whole year. So I made the same assumption, despite it's unlikely. To be precise, the new rate will be determined on 4/12/2022. If you buy now (December), it will be effective for 6 months starting from 6/1/2022.

Let's assume your 6%. Then, in the 2nd 6 month period, the interest income (before penalty) is 3% of $10,356.

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Dec 15, 2021
2,670 Posts
Joined Aug 2008
Dec 15, 2021
UnstableChimp
Dec 15, 2021
2,670 Posts
Quote from MadPup :
What about Trump's Tax Cuts and Jobs Act of 2017? That will cost $1.5T with little or no macro economic benefit. Unfortunately politicians in power spend too much money and politicians in opposition complain about it. The end result is inflation sooner or later no matter who is in control. And then there's Covid.
Last I checked Trump was no longer in office, and no longer has power to influence the current and future rate of inflation. My criticism is about what is currently being done given the current rate of inflation. There can be all kinds of debate about who or what is responsible for the current rate of inflation. It's obvious it's a combination of the pandemic, the previous administration's tax cuts and policies, and the current administration's spending and policies.

For those who don't know, the $1-$2 Trillion quoted cost of the TCJA is over a 10 year period. It went into effect in 2018. If the current administration changes anything, then the $1.5 Trillion quoted could change significantly. To say that the tax cut has no macro economic benefit is debatable, because like you pointed out, there are other factors at play which interfered with our economy as a whole. The pandemic (or more precisely the policies implemented as a result of the pandemic) have been impacting our economy. To reach the conclusion; the TCJA has no macro economic benefit is hard to argue given the current pandemic policies.

I for one was not a fan of many aspects of the TCJA. I also believe it to be fair to criticize both parties and their policies.

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