Table of Contents
Notes
Check out https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm
These I-bonds seem like an interesting product: ~7% interest rate (but changes every 6 months); inflation protected; $10k investment limit per yer per ssn; only federal tax; no state tax; 1 year lockup; 3 month interest loss if withdrawn before 5 years.
It seems like a good ROI with diversification benefits when mixed with other popular options like stocks, real estate.
If the inflation goes up, the yield will go up and vice versa.
The interstate rate has two components - fixed and inflation related. They are calling the total interest rate “composite”.
Here is the example: https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm#rate
The same page also has historical interest rates at the bottom (https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm#compositerate). Since 1998, it was always above 7%.
To buy them we have to open an account on treasurydirect.gov and buy it from there.
today | 2021-11-23
Q & A
https://www.treasurydirect.gov/files/savings-bonds/i-bond-rate-chart.pdf - Shows the history of interest rates for I-bonds. It has a table with the historical fixed and variable components.
The Treasury sets the fixed interest rate based on the yield on TIPS.
Ref:- https://www.barrons.com/articles/i-bond-interest-rate-cbe5a38?mod=hp_LEAD_1_B_1
links I came across
- https://www.investopedia.com/terms/s/seriesibond.asp - comprehensive, easy to understand.
- https://www.treasurydirect.gov/indiv/products/prod_ibonds_glance.htm - info on I-bonds
- https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm - indepth info on I-bonds
- https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_itaxconsider.htm - tax considerations for I-bonds
- https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm - shows the history of interest rates for I-bonds
- https://www.treasurydirect.gov/indiv/products/prod_tipsvsibonds.htm - I-bonds vs. Tips
- https://www.treasurydirect.gov/indiv/help/TDHelp/help_ug_292-EntityAccountsLearnMore.htm - about entity accounts
- https://www.treasurydirect.gov/indiv/help/TDHelp/howdoi.htm#openminor - Instructions on how to open a tresurydirect account for a minor
- https://www.treasurydirect.gov/indiv/help/TDHelp/howdoi.htm - How do I this and that?
- https://www.treasurydirect.gov/indiv/products/prod_eebonds_glance.htm - EE bonds overview
- Answers the question “What is the current interest rate of Series EE savings bonds”?
- https://www.treasurydirect.gov/indiv/research/indepth/ebonds/res_e_bonds_eeratesandterms.htm - interest rates for EE-bonds
- https://www.treasurydirect.gov/indiv/research/indepth/ebonds/res_e_bonds.htm - info on EE bonds