Investment Opportunity --I--Bonds --9,62 %

[smitcompton]

Hi all,

I just wish to give people a heads up on the interest rate on Government I Bonds. These are meant to be an inflation hedge as the interest rate changes on them twice a year. You cannot sell them for a year, and there is a penalty for a withdrawal before the five year point. These are like CD's. At the moment the interest rate is about 9.62%. The maximum amount you can purchase is 10,000, but I think it starts at $50. You used to be able to buy these at the bank, but no more. You need to open an account at TreasuryDirect.gov. in order to make the purchase. These are state tax exempt.

I doubt you can get a higher rate anywhere that is as safe as this. I did just buy some.

Annette

 

[DAF]

thanks for the information

 

[SomethingNew]

Thanks for watch out for us! I always appreciate your insights. Can both husband and I each put in 10K? or only 10K per household?

 

[Austina]

Thanks for the heads up @smitcompton, as newbies to the US it’s probably information we wouldn’t have come across.

 

[smitcompton]

Hi,

Yes, you can each purchase $10,000 of I bonds. You need a Social Security number as they must be separate accounts. If you get back a tax refund the proceeds can be used to buy more I bonds up to 5,000.00. You can make gifts to children as well as long as they have a S.S number Each year you may make an additional purchase up to the 10,000 limit.

There were 3 conditions to be able to open an account. I'm not positive, but I think you must be a US citizen. Its pretty easy to understand the website. Better you check yourselves.

Austina, please check the website as You are from England, and I am not sure you are eligible.

Annette

 

[Austina]

Thanks @smitcompton, Mr A checked and we are eligible to buy the bonds as long as we’re residents.

 

[smitcompton]

Hi,

I just re-checked myself, and if you are a US resident you are eligible. The inflation data for May came in this morning at an all time high.--8.6%. I don't think we can expect the 9.62 rate to re-appear, but its really good for now. Who knows what the next rate will be. It puts a little bit of suspense in this investment. Remember, after a year you can sell it.

It can be used for education as well, and in that case no Federal taxes will accrue on the I bond.

Annette

 

[SomethingNew]

Hi,

I just re-checked myself, and if you are a US resident you are eligible. The inflation data for May came in this morning at an all time high.--8.6%. I don't think we can expect the 9.62 rate to re-appear, but its really good for now. Who knows what the next rate will be. It puts a little bit of suspense in this investment. Remember, after a year you can sell it.

It can be used for education as well, and in that case no Federal taxes will accrue on the I bond.

Annette

I just talked to my husband last night, thinking I will put in 10K each for the kids with their own SSN, but it may not be a good idea because they are minor and they don't currently file any tax return. So with this interest, they will have to file their own tax return. so we probably just do it ourselves, not for the kids.

 

[smitcompton]

Hi,

SomethingNew- The website said that the minor children's account is set up so that it is linked to your account. I don't know what that means for tax purposes. If you have an income under a certain amount you do not need to file taxes. Your children do not have any other income, right?, so I doubt they would have to file.

I would ask the website this question. There ought to be a contact me place.

Annette

 

[LilAlex]

That's a good PSA -- thank you! They are a nuisance to buy and Treasury Direct is not a fun interface, IIRC. And the purchase limit is pretty modest in terms of a whole-estate picture.

 

[smitcompton]

Hi,

I set up the account in about 15 minutes yesterday. I put in my purchase for $10,000 and it was already removed from my checking account by this morning before my post. I thought pretty easy.
There are many younger people who are starting out or some looking to buy some new jewelry who can benefit from this, perhaps only in the short term. but extra money comes in handy.
Before I learned about the stock market and before the 2007 financial crisis I used to buy T-bills.. At the time I got 51/2 % on my money. I await that return on my money so I can leave the stock market behind, although I have fared well there. With T-bills there was no worry and I was a happy camper.

Annette

 

[smitcompton]

Hi,
SomehingNew et Al.

Good News for you. The Federal Tax that you may owe from the interest on the I bond, is deferred until either the bond matures or is cashed in. So it will depend when you cash it in.

Annette

 

[SomethingNew]

Hi,
SomehingNew et Al.

Good News for you. The Federal Tax that you may owe from the interest on the I bond, is deferred until either the bond matures or is cashed in. So it will depend when you cash it in.

Annette

Oh that's good to know, it makes sense to pay the tax when the interest is realized.