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We’re generally not ones to provide investment advice, as we leave that to the financial advisors! However, with inflation on everybody’s mind these days, we thought we’d share an inflation hedge for surplus funds you may have sitting idle earning next to nothing in savings accounts…
What Are I-Bonds?
I-Bonds are savings bonds that earn interest based on combining a fixed rate and an inflation rate. The fixed rate portion stays the same for the life of the bond, while the inflation rate is set twice per year (May 1st & November 1st).
Why Purchase I-Bonds
During inflationary times, such as we’re in now, I-Bonds can provide a safe place to park money that provides a hedge against inflationary pressures on your money. For bonds purchased from May 2022 through October 2022, the combined rate is a staggering 9.62%, and the interest earnings are free of state & local taxes. Interest is earned monthly and compounded semiannually, for a period of 30 years or however long you hold the bond.
I-Bonds can be a great place to park surplus funds you won’t need for at least one year, and provide opportunity to take advantage of tremendous guaranteed rates that are far surpassing regular savings accounts.
** Information taken from TreasuryDirect.gov