Keeping your savings in the bank? You could be losing money. Claire Reilly explains how to take advantage of high inflation with a simple investment that can bring big returns.
0:00 Intro
0:54 What are I Bonds
1:20 The Inflation Effect
1:55 How to Buy I Bonds
3:45 The Returns
4:47 Who is it For?
5:31 Conclusion
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LEARN MORE ABOUT: Treasury Inflation Protected Securities
REVEALED: Best Investment During Inflation
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How to Buy I Bonds: A Beginner’s Guide
If you’re looking for a safe and reliable investment tool that can help you protect your savings against inflation, I Bonds might be the perfect choice for you. I Bonds are savings bonds issued by the United States Department of the Treasury that are designed to offer a low-risk, long-term investment option.
Here is a step-by-step guide on how to buy I Bonds:
1. Research and educate yourself: Before diving into the world of I Bonds, take some time to understand how they work and the benefits they offer. Explore the TreasuryDirect website (www.treasurydirect.gov) to gain insights into the various features and current rates of I Bonds.
2. Set up a TreasuryDirect account: To purchase I Bonds, you’ll need to create an account on the TreasuryDirect website. Click on the “Open An Account” option, and follow the instructions to provide your personal information, including your social security number, date of birth, and contact details. You’ll also be required to create a unique username and password.
3. Fund your account: Once your TreasuryDirect account is created, you need to fund it to purchase I Bonds. You have two options for depositing funds: linking a bank account or using an existing TreasuryDirect account. Choose the option that suits you best and complete the steps accordingly.
4. Assess your investment goals: It’s important to determine how much money you want to invest in I Bonds and for how long. The minimum investment amount for I Bonds is $25, and the maximum purchase limit is $10,000 per calendar year per Social Security Number (SSN), regardless of whether it is purchased electronically through TreasuryDirect or as a paper bond. If you expect financial needs within the first 12 months, keep in mind that redeeming I Bonds before they are held for 12 months will result in the loss of the last three months of interest.
5. Purchase I Bonds: Once you have funded your TreasuryDirect account and decided on your investment amount, you’re ready to buy I Bonds. Log in to your TreasuryDirect account and select the “BuyDirect” option. Follow the prompts, choose the I Bond series, and enter the desired investment amount. Make sure to double-check all details before confirming your purchase.
6. Keep track of your investments: After purchasing I Bonds, it’s essential to monitor your investments regularly. TreasuryDirect provides an online inventory that displays your bonds’ current value, interest rates, and maturity dates. It is advisable to review your account periodically to stay informed about your investment performance.
7. Consider tax implications: Interest earned on I Bonds is subject to federal income tax, but it is exempt from state and local taxes. You can elect to pay taxes on the earned interest annually or defer it until the bond is redeemed. Consider consulting a tax advisor for personalized advice based on your unique circumstances.
8. Redeem your bonds: I Bonds have a minimum holding period of one year, but they can be held for up to 30 years. They continue to earn interest for up to 30 years and can be cashed in any time after the one-year holding period. If you decide to redeem your bonds, you can do so through TreasuryDirect and the funds will be deposited directly into your designated account.
In conclusion, I Bonds can be a valuable addition to your investment portfolio, providing a safe way to protect your savings from inflation. By familiarizing yourself with the process and following these steps to purchase I Bonds, you can make informed investment decisions that align with your financial goals. Remember to research market conditions and consult professionals when needed to make the most of your I Bond investments.
Trea
This is only for US citizens right???
Why is an Aussie explaining to the internet how to buy American savings bonds? Sounds fishy.
Why is a British woman with roots telling us about American bonds?
Incredibly useful video. The website is a bit newer on the front end, but the same once you log in. So the instructions on how to actually buy still work. Thank you CNET.
Incredibly helpful video. The walkthrough saved me a lot of headache trying to navigate the site. Really appreciate this!
Does that 9% interest rate stay throughout the term or does it change after 6 mos?
So, when you buy these I Bonds, there is just a record in Treasure Direct website? That's it? Nothing on hands?
Sadly you have to be 18 to purchase
the amount you gain per year wont even cover 1 month of rent in nyc better off opening a small business and sell some junk on ebay
can i buy with a credit card?
Very disappointing that the video doesn't show, step-by-step, how to designate a beneficiary or a joint owner.
Can you clarify how the 3-month interest penalty works? For example, say I buy a bond right now at 9.6% and that rate is good for six months, and then the rate drops to, say, 0% for the second six months. After 12 months, I decide to cash in the bond, so I am subject to three months loss of interest. Is that three months interest at the initial rate of 9.6%, or is it three months interest at the final rate of 0% or is it based on the blended rate which would be 4.8%? I think how they handle this penalty is key to making the decision on whether to buy the bond if you only plan to keep it a year.
Thank you
What is the difference between paper I bone and electronic I bonds??.. pro and con between the difference?…I appreciate you time.
Good presentation. I thought no federal taxes.
Thanks for the video!!! It is very helpful. When I check the TD web, it does not specify how much I can buy ibond as a gift to someone. It only mentions I can only gift $10,000 to someone each year. Does it mean I can buy, for example $50,000 ibond to my wife as a gift this year and deliver to her $10,000 per year for the next 5 years?
Thank you! This was very informative.
Thank you for a very illuminating and easy-to-understand video about Series I Bonds. Wonderful job on the video presentation!
Great video. The Treasury Direct web site is absolutely hideous. I don't know how the government could f*** up a site so badly but they figured it out. I guess the biggest downside I see to I-bonds is the $10,000/year maximum.
For an I-BOND purchased in APRIL 2022:
What TD will show you:
I-BOND: 04-01-2022 Accumulated interest shown (less the 3-month penalty)
ANY DAY IN A GIVEN
MONTH YOU
VIEW ACCUMULATED
INTEREST IN YOUR
ACCOUNT:
05-2022 $0
06-2022 $0
07-2022 $0
08-2022 interest from April
09-2022 Apr+May
10-2022 Apr+May+Jun (6 Month Interest Rate Reset)
11-2022 Apr+May+Jun+Jul
12-2022 Apr+May+Jun+Jul+Aug
01-2023 Apr+May+Jun+Jul+Aug+Sep
02-2023 Apr+May+Jun+Jul+Aug+Sep+Oct
03-2023 Apr+May+Jun+Jul+Aug+Sep+Oct+Nov
STARTING NEXT MONTH YOU CAN REDEEM YOUR I-BOND and GET:
MONTH OF
REDEMPTION:
04-2023 Apr+May+Jun+Jul+Aug+Sep+Oct+Nov+Dec
05-2023 Apr+May+Jun+Jul+Aug+Sep+Oct+Nov+Dec+Jan
06-2023 Apr+May+Jun+Jul+Aug+Sep+Oct+Nov+Dec+Jan+Feb
07-2023 Apr+May+Jun+Jul+Aug+Sep+Oct+Nov+Dec+Jan+Feb+Mar
Get it?
Since during the month that you would REDEEM the I-Bond you would get ZERO INTEREST for that ENTIRE MONTH!! The 3-month penalty applies to the PRIOR 3 FULL MONTHS you held the I-Bond. That's why many are suggesting that when you redeem I-BONDS you should redeem them very early of any given month.
You will ONLY GET the full 12 months of interest payments when you REDEEM DURING ANY DAY IN JULY 2023…. No more, no less. So why would anyone EVER redeem their I-bonds on any date late in a month? Give the Feds free use of your money for an additional month?
WITHOUT EXCEPTION it is ALWAYS BEST, to buy I-bonds LATE IN ANY MONTH, and redeem I-bonds EARLY IN ANY MONTH when thinking about maximizing the RATE of RETURN.
Nice job on showing how to set up the account and buy the i bond. This website isn’t the best