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expireddn90003 posted Dec 12, 2021 2:07 PM

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

7.12% Interest

(Limit $10K/Year Per Person)
3,498 Comments
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Deal Details
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

Community Voting

Deal Score
+952
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Top Comments

sdpoker
1.8KComments
463Reputation
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 =
Go to Comment
webbiedo
4Comments
58Reputation
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.
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foxfai
5.2KComments
3.5KReputation
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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Dec 17, 2021 9:26 PM
2.5K Comments
Joined Nov 2005
chargerDec 17, 2021 9:26 PM
2.5K Comments
Quote from lazysaver :
If the bond says $150 on the face, it was sold for half at $75 with it guaranteed to reach $150 after 20 yrs.
Denomination of $50, issued at $25, yes. Interest $90.32, value of $115.32. Times 3.
Dec 17, 2021 9:29 PM
2.9K Comments
Joined Jul 2009
keungDec 17, 2021 9:29 PM
2.9K Comments
Quote from charger :
Hopefully it's more. But that's what the Treasury calculator outputted from the issued amount of $150 and the issue date.
paper EE bond is issued 50% discount to par so a $50 paper EE bond means someone bought it for $25, so $150 is $75 if you have paper bond
Dec 17, 2021 9:38 PM
920 Comments
Joined Jan 2008
MikeyMarginalDec 17, 2021 9:38 PM
920 Comments
Quote from keung :
NO, $T is going to cut it's dividend once it's spinoff WB. so you certainly WILL NOT get 8% next year, you will get maybe 4% dividend and a brunch of Discovery stocks which may or may not pay dividend.

I own a lot of $T (been accumulating last 2 months) because I like the WB+Discovery merger and the low value, not it's 8% dividend... People need to stop give up investment advice which they know nothing about please.

BTW you can get 16% from IEP Carl Iahn's investment company which pay 16% dividend. (double of AT&T) but please do research the company and access your own risk and understand why you want to own it not because it dish out some dividend.

I have a portfolio of stock, mutual fund, crypto, and CASH ( which include iBond) and they all have a place in my portfolio.
I know the div decrease was reason the T price took that last leg lower to $22, so if you can enter near this $22 support level and sell calls, don't you think that is good? You could collect 2% in one month for selling the $24 calls. Do you not use options? I remember you are the same guy who said everyone should already know about I bond and I was silly for posting this thread Smilie Have you seen the tremendous interest based on November i bond inflows?
Dec 17, 2021 9:49 PM
4.1K Comments
Joined Feb 2010
SumDuudDec 17, 2021 9:49 PM
4.1K Comments
Quote from bonkman :
The crypto-is-like-the-internet argument is so bad. I wish crypto fans would stop using it. It makes crypto look worse.

I'm not saying that crypto won't exist in the future or even that it's a bad move for a portfolio. What I'm saying is that no, it's not like the early internet at all. In any way, shape, or form. Using that argument is like the idiots who say stuff like "hey, it rained really hard on July 17. Climate change sucks!" Climate change is real. However, your argument for it is terribad.
Except that it is a fair comparison for emerging new technology. Cryptocurrency is still very early in adoption phase and make smart moves now can pay off kindly in the future; very similar to early adopters of the internet. There is also a lot of room for scams and failures (sound anything like the .com boom?). You can think about it however you want, there are plenty of people that agree with the comparison and where we are in the process of it becoming maintstream
Dec 17, 2021 9:57 PM
71 Comments
Joined Apr 2020
BeautifulCaribou887Dec 17, 2021 9:57 PM
71 Comments
Quote from skwishbot :
When I was young, my Grandma gave me a $100 savings bond. After 30 years I cashed it in. Got $160. Yay?
That doesn't sound right. Any 30 year bond cashed in the last 10 years would have been paying an interest between 8-15%.

You should've ended up somewhere between $350 and $550.
Pro
Dec 17, 2021 10:16 PM
38.6K Comments
Joined Nov 2006
bonkman
Pro
Dec 17, 2021 10:16 PM
38.6K Comments
Quote from SumDuud :
Except that it is a fair comparison for emerging new technology. Cryptocurrency is still very early in adoption phase and make smart moves now can pay off kindly in the future; very similar to early adopters of the internet. There is also a lot of room for scams and failures (sound anything like the .com boom?). You can think about it however you want, there are plenty of people that agree with the comparison and where we are in the process of it becoming maintstream
One was partially developed by the government. The other is being shut down by governments. One actively improves with better computers. The other has to reinvent itself for better computers.

Sure you can say some things are similar. I can draw comparisons between crypto and ants, too. That's about as similar as crypto and the internet.
Dec 17, 2021 10:55 PM
2.2K Comments
Joined Aug 2014
Cmurphy16Dec 17, 2021 10:55 PM
2.2K Comments
Quote from BeautifulCaribou887 :
That doesn't sound right. Any 30 year bond cashed in the last 10 years would have been paying an interest between 8-15%.

You should've ended up somewhere between $350 and $550.
If it wa a $100 savings bond, it would have cost $50 and they got $160. Sounds about right.

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Dec 17, 2021 11:53 PM
7 Comments
Joined Nov 2014
AndrewL9096Dec 17, 2021 11:53 PM
7 Comments
My daughter is nine years old if I were to spend $500 on this is there an estimate of how much this might be worth when she turns 18?
Dec 18, 2021 12:07 AM
1.2K Comments
Joined Mar 2005
acegolferDec 18, 2021 12:07 AM
1.2K Comments
Quote from AndrewL9096 :
My daughter is nine years old if I were to spend $500 on this is there an estimate of how much this might be worth when she turns 18?
The Fed targets an average of 2.0% inflation rate, which determines the interest rate on i-bond.

$500 * (1 + 2%) ^ 9 ~= $600 (just an estimate, nobody knows the actual value in 9 yrs)
Dec 18, 2021 1:50 AM
598 Comments
Joined Dec 2016
samsungs70Dec 18, 2021 1:50 AM
598 Comments
Noob question: how do I fund my treasury account?
This is the instructions from SD:

"How do I buy a Series I bond?
Must register or sign-in to your free TreasuryDirect.gov account and link a bank account.
Electronically: Online via TreasuryDirect (including through payroll direct deposit)
Paper: By mail when you file your federal tax return
Click here to view a Guided Tour"

I clicked on the Guided Tour. I have followed all the steps in the Guided Tour. My bank account has been linked to my Treasury account which has a Treasury account number created. I was able to log in to my Treasury account. The next step is how do I fund the money. Is $10k the limit one can fund? Thanks.

I guess to buy Series I Savings Bonds, click on the tab 'BuyDirect' next to 'My account' tab and enter the purchase amount max of $10k?
Last edited by samsungs70 December 17, 2021 at 05:54 PM.
Dec 18, 2021 2:15 AM
29 Comments
Joined May 2014
bclizzleDec 18, 2021 2:15 AM
29 Comments
Can someone teach me the math of this? Is it compound? Let's say you do $100. Assuming 7% sticks, what would it look like in 10 years? And does it max?
Dec 18, 2021 2:21 AM
3.8K Comments
Joined Aug 2005
labboyproDec 18, 2021 2:21 AM
3.8K Comments
Quote from CompulsiveBuyer :
If the US dollar becomes worthless the world will be in a place where the value of your crypto will be your least concern. Same thing goes for gold bugs. Good luck using either in such a world.
Toilet paper and peanut butter is where the real investing is done.
Last edited by labboypro December 17, 2021 at 06:33 PM.
Dec 18, 2021 2:32 AM
3.8K Comments
Joined Aug 2005
labboyproDec 18, 2021 2:32 AM
3.8K Comments
Quote from AndrewL9096 :
My daughter is nine years old if I were to spend $500 on this is there an estimate of how much this might be worth when she turns 18?
Quote from acegolfer :
The Fed targets an average of 2.0% inflation rate, which determines the interest rate on i-bond.

$500 * (1 + 2%) ^ 9 ~= $600 (just an estimate, nobody knows the actual value in 9 yrs)
Also, since it is pinned to inflation, your realized gain in 9 years will approximate zero. That assumes the actual inflationary rate is in line with the 'expected' rate they've attached to these bonds, and that wherever you end up spending the money has experienced inflation at that rate (so, perhaps milk prices tracked well below actual inflation, if you spent it all on milk you'd actually be ahead). So... you're not actually making any money here... just hedging against inflation.
Pro
Dec 18, 2021 3:15 AM
38.6K Comments
Joined Nov 2006
bonkman
Pro
Dec 18, 2021 3:15 AM
38.6K Comments

Our community has rated this post as helpful. If you agree, why not thank bonkman

Quote from bclizzle :
Can someone teach me the math of this? Is it compound? Let's say you do $100. Assuming 7% sticks, what would it look like in 10 years? And does it max?
Here's a compound interest calculator [investor.gov]. This bond is compounded semi-annually. These bonds will accrue interest for 30 years. As you likely know, this particular bond type is variable rate, so you can't tell what the final value will be. However, that calculator lets you put in various rates for hi/low estimates.

Math alert:
The compound interest formula is P(t) = P0*(1 + rate/n)^(nt) where the rate is given for some set time (usually a year) and n is the number of times it's compounded. t is the amount of rate periods. So for this bond, the value after t years (assuming it's constantly 7%) is <initial amount> *(1+.07/2)^(2t). In 30 years, that $100 would grow to about $788. (Again, assuming a constant 7%.) If you kept it in for 15 years, however, it would only be worth $281. Such is the power of time with compounding interest. Essentially, a 7% interest rate means that your money doubles every decade, ignoring inflation.

More math alert:
Because Euler's number "e" is the limit of (1+1/n)^n as n approaches infinity, this formula approaches P(t) = Pe^(rt), a formula you may have learned in HS algebra class. This is basically what you'd make if the interest were calculated every instant of every day. You don't actually make infinite money because the rate gets broken up into so many pieces. And if you want to go into a really deep rabbit hole, this irrational number that's used to easily estimate interest rate payouts (at least, if you have a decent calculator) rears its head in some really bizarre "different" cases -- like how likely it is to go 0-for-n when playing a game that has a fixed probability of you winning. It even shows up all the time (usually as its counterpart "natural log," or ln) in optimization problems.

Cheers
Last edited by bonkman December 17, 2021 at 07:24 PM.
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Pro
Dec 18, 2021 3:20 AM
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Joined Nov 2006
bonkman
Pro
Dec 18, 2021 3:20 AM
38.6K Comments
Quote from labboypro :
Also, since it is pinned to inflation, your realized gain in 9 years will approximate zero. That assumes the actual inflationary rate is in line with the 'expected' rate they've attached to these bonds, and that wherever you end up spending the money has experienced inflation at that rate (so, perhaps milk prices tracked well below actual inflation, if you spent it all on milk you'd actually be ahead). So... you're not actually making any money here... just hedging against inflation.
This is roughly true in the broad economic sense, though not exactly true because the rates change only every 6 months whereas inflation technically changes instantaneously.

More importantly, though, is the fact that we're on SD. The enter point of this site is to hedge against inflation. I don't really care if the price of TVs goes up 5% y/y because I know I'm going to buy a FP deal that's 70% off the prices which inflation is calculated off of. And, sure, while some items, like groceries or housing, don't show up here too often, there are ways to beat inflation in those areas, too.

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