How can you protect yourself against inflation? What if the government was wiling to give you a guaranteed almost 10% rate of return? Well it turns out that’s entirely possible – enter government issued I-Bonds and TIPS – Treasury Inflation Protected Securities.
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#ibonds #investing #inflation2022…(read more)
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Thanks for the tips! I'm going to go buy some today!!!
Since last year when inflation was still considered "transitory" by the Federal Reserve, I have been thinking about I-bond as an emergency fund vehicle (after that 1 year lock-in period). If you safely get over the 1 year lock-in period, it is kind of the perfect place for an emergency fund, especially if you buy in increments month over month, similar to the CD ladder approach. It is virtually risk free; it is liquid (time to access is on the order of days); and it is inflation-protected, which is not something you can find easily. I'm glad that the first trench of my I-bonds will be over the 1 year lock-in window next month.
I also want to add, if you have kids, you can buy I-bonds (or EE bonds) for them and they each has a separate $10k quota.
Thanks for the info Erin – I really never heard of "I Bonds" before – I'll have to look into investing in them.
Can we buy $20000.00 as a married couple in a year?
yé money!
Since inflation is at least 2% usually, can we expect at least 2% interest for I-bonds ? That is still better than a CD or savings account.
Thank you Erin for the great information on I bonds! Really love your content!
Thanks for the great tips. I brought Treasury I-bond that gets like 9.50% from May to Nov 2022. But I wonder know how much would be the interest after that. Can it go to negative interest ? (I was hoping it would at least give 2% interest since inflation is at least 2% most of the time).
I thought it was up to $10,000.00 per Social Security Number. Just think how well your grandchildren would be if you could put in $10,000.00 each year until they reach 21! Then I would hope someone would have talked to them about being financially thrifty.
Dear ETM,
Thanks for again teaching me something about a topic I thought I knew about. I was not aware of the no inheritance tax. This may be very helpful for us. Since we are a bit older and have a emergency fund that probably has too much cash we both purchased the limit last year and this year. If life goes well and we never need this money the kids get it without Uncle Sam taking a bite.
Love it
Thanks again,
TfT
I bonds are probably the best investment for this year. But I feel like it's catch22 in terms of whether I want it to go up. If it goes up, it means inflation is still going up. If it goes down, my I bonds lose value. Maybe keep us updated on when you sell it.
I just wanted to say your content is always a great source of info for me! Honestly you keep me inspired posting my own finance videos. Please don't stop we these videos!
Never heard of I Bonds , Great Info…..
Thank you Erin! I've heard about and have been exploring the idea of buying i-bonds. Pulled the trigger on it today as I am FIRE at the begging of June. Won't need the money for a long while so great diversification tool!
Thanks Erin for this timely info on I-bonds. Once again, clear and thorough information, without any additional fluff and noise. Really appreciate your videos. Keep them coming. I do have one question that perhaps others may have as well regarding I-bonds: I understand that I can purchase a maximum of 10k per individual per year of I-bonds – so a married couple can purchase 20k total per year, but, I’ve also heard that if a couple has a trust – then the limit is 30k. Do you know anything about how this works?
I had both of my daughters purchase ibonds in October, so they will recieve 6 months interest at 3.56%, 7.12%, and 9.62%. They purchased more in April locking in the 7.12 and 9.62%. I did the same. As for amount you can urchse, you can also purchase 10,000 for someone else as a gift. On the tresury direct site, you can purchase the gift ibond, and it locks in the current rate, and starts the one year holding period. However, if the person recieving the gift has already purchased the limit, you don't have to "gift" the bond right away. You can hold it as a gift in your treasury direct account, until a year where rates are down, and the person recieving doesn't buy bonds. Another very informative video. I regulary send them to my daughters!
I had just moved money from my savings to i-bonds the day before we met up last week and meant to mention it to you and Paul, but I never got around to the "quiz a finance guru" part of the night! Trying to convince Dan to do it now too, but he's turned off by how clunky the website is. For an extra few hundred $$ every year, I think it's well worth the 5 minutes though!
Always looking to diversify and dumping 10K into I Bonds for a 5 year seems like a good (Fun) idea, can married couples do 20K? Or do you just set up two accounts? Now if I was still in my 40's I think I would just keep riding the market but we older people need hobbies 🙂
Yeah I'll pass on the I bonds. Too risky for emergency fund because its locked up for a year. Might be a good option for short term savings plans though……house, car, etc. I'd just rather buy the dip right now especially with the S&P 500 possibly dipping below 4000 and keep my emergency fund liquid. Online savings accounts are going up slowly mine is up to .7% I'll take it lol.