US Treasury Series I Savings Bonds

Yes, you might have to pay taxes on any interest or gains for any bond or security. This is no different.

BUT -- these I bonds are better since they are not subject to State and Local tax!


No. I-bonds are not marketable securities and can only purchase/redeem at treasurydirect.gov.
 
This is technically different from T-bill. For starters, t-bill is short term and has fixed rate no variable rate.

7.12% is due to the inflation rate. The CPI-U increased by 3.56% between end of 3/2021 and end of 9/2021. Double it, you get 7.12% APR.

 "The annual interest rate for EE bonds issued from November 2021 through April 2022 is 0.10%. Regardless of the rate, at 20 years the bond will be worth twice what you pay for it. If you keep the bond that long, we will make a one-time adjustment then to fulfill this guarantee."
 
  Don't let "bond" in I-bond fool you. It is nothing like a traditional bond with fixed principal amt, fixed maturity date, fixed coupon rate. Instead, you deposit how much you want (up to $10k/yr), redeem partially any time you want after 1 yr, and the rate changes every 6 months. IMO, it's more like a restricted savings account with much higher interest rate.

No, these are govt bonds. They stay in the treasury. I bonds are based on the rate of inflation. They have a fixed rate plus the current rate of inflation. Inflation goes up, you earn more. It was 3.54%. Rates went up on 11/1. To realize the full benefit you need to buy before the rates change on 5/1 and 11/1. No fees or penalties. Hold for a min.of a year. If you cash out in less than 5 years you forfeit 3 months interest. After 5 years, you don't pay anything. You can only buy $10k/yr and then up to an additional $5k if purchased directly from your tax refund.
I bought $10k in denominations of 2,3, 5 so if I want to cash out I can do it in chunks instead of having to cash out $10k.: Better than any CD or bank rate if you want to stay in cash.

 You cannot cash out I Bonds for a year and the 3-month penalty for cashing out early is if you cash out before holding I-Bonds for 5 years. The same applies to EE bonds.
 
 
3 tax benefits.

1. Tax deferral. You pay tax when you redeem (default choice), not every year. But you can elect to pay as interest is accrued each year.
2. No state income tax.
3. There are some eligible expenses (e.g. kid's college) that waive tax.

But these are only rated for inflation as fixed rate is 0%. Once inflation is back down, your rate will go down with it.
In case you're wondering, here's how the rate is computed:
Composite rate = [fixed rate + (2 x semiannual inflation rate) + (fixed rate x semiannual inflation rate)]

 I just loaded up $40k between myself, wife and two kids. Will do another $40k in January. That is enough for me.
 

As far as I can tell stocks are the play. They historically return as much as real estate, except there is ZERO work involved. You literally sit on your ass while they go up.

The only caveat is you may experience a few years of down returns. However, I'm old. I know now when stocks go down, they ALWAYS go back up and to new records, just a matter of time.

Bitcoin is interesting and I have a little, but stocks to me seem just as tangible and as much a long term store of value as gold/crypto.



 The point is that this is guaranteed (at least for six months). The stock market is not guaranteed to go up. Folks keep talking about a correction so in a year your S&P might be down 10%. This will be up, maybe not 7% if the rate changes in 5 months, but still more than 0%. No guarantees with the stock market.


Yes that is correct and I believe you can do total $20k in calendar year if you are married and file jointly.
It is $10K per person, having nothing to do with your tax filing status.

Then in addition, you can select up to $5K of a tax refund per return (not per person) to buy I-Bonds.

It's per tax id, so not just people


It's an I bond, which pays an interest rate that's a function of the inflation rate. Right now, inflation is higher than it's been for the past several years, so the inflation part of the I bond's interest rate is the whole 3.54% (APR); the fixed rate part of it is zero.

The upside of investing $10k in these bonds is that your $10k will definitely increase with inflation -- there's no way you'll lose purchasing power. The downside is that there's no way you'll gain purchasing power, either. You're basically locking in a real interest rate of zero.

Mind you, that's if when you sell the bond, you use the money to pay for college and so avoid paying income tax on the interest. If you don't do that, you'll pay federal income tax on the interest.

For those who are unfamiliar with I-bonds, there are a few rules to them:
You cannot redeem them in the first 12 months
If you redeem them after year 1, but before year 5, there is a penalty equal to the last 3 months of interest.

Although the current rate is 3.54%, I-bonds have a rate that changes every 6 months. The current Fixed Rate (which is set for the life of the bond) is 0%. For the past decade, the fixed rate has been low-to-non-existent, but in the past it has been as high as 3%. If you hold one of those bonds, your current composite rate would be earning close to 7% interest! If possible, I prefer to "get in" to I-bonds when the fixed rate is more palatable.

Also note, you get the interest for the whole month even if you buy on the last day of the month! If you wait until the end of October, you can have an idea of if you would rather have the upcoming interest combination set or if you want the current set (although I don't think they reveal the fixed rate until the window opens).


It's an I bond, which pays an interest rate that's a function of the inflation rate. Right now, inflation is higher than it's been for the past several years, so the inflation part of the I bond's interest rate is the whole 3.54% (APR); the fixed rate part of it is zero.

The upside of investing $10k in these bonds is that your $10k will definitely increase with inflation -- there's no way you'll lose purchasing power. The downside is that there's no way you'll gain purchasing power, either. You're basically locking in a real interest rate of zero.

Mind you, that's if when you sell the bond, you use the money to pay for college and so avoid paying income tax on the interest. If you don't do that, you'll pay federal income tax on the interest.


 I've been investing in i-bonds for many years. Just put in $20k last month between my wife and myself.

We park some of our emergency fund money in these, so it's much better than earning 0.4% at a savings acct. A few things to keep in mind:

- the interest rate changes every 6 months (tied to inflation)
- You need to keep it at least 1 year, and after that, there is a 3 month interest penalty if you cash out in less than 5 yrs. However, even with the penalty, it still has a much higher interest rate than a savings acct.
- It's a Government website so the interface is like 20 years old.

Overall though, it's a very solid offering for a part of your cash reserves.

 I second this. A solid way to park emergency funds vs the bank at .1% interest. Note that there are 2 ways to get around the $10k/yr/person limit. The first is buying with tax refund. The second is to buy it in a trust, This is better to buy this before VIPSX. Oh, and the reason this is not well known is that brokerages dont make any money off of this, so there is very little advertising. Even the US treasury limits how much you can purchase because it is a good deal for the average person.
 


If you're saving for college then absolutely do a 529. That is by far the best method. It gives best earnings, tax benefits and most flexibility than any other college investment.

I bonds are for emergency funds. Routine advice is to keep 6 months of expenses in a safe liquid place for emergency, loss of a job, etc. So you can keep 1 month of expenses in a low paying bank account and 5 months of expenses in I bonds paying 3.45%. In case you have an emergency of loss of a job, you can access your 1 month of expenses in the bank account and start cashing out your I bonds. Note that this works only after 1 year of owning the I bond because you cannot cash it out before 1 year. I bonds are not for investing, so comparing to other investments doesnt make sense

 After 1 year they serve as emergency funds. During the first year, you need another source, then after 1 year, you dont and use the i bonds as the emergency funds.
 
Unless you already have a majority of your assets tied up in securities. I Bonds are currently a NO BRAINER for those sitting on cash and already diversified in the SP 500 and other stocks. Anyone talking trash on this product right now is a novice or beginner. Sorry for the arrogance but nothing else compares in the short term for cash.

> But I'm not sure whether you can use one treasurydirect user to open 2 accounts for 2 ppl.

Nope. It's separate accounts per person. The bonds can be issued to "Spouse A WITH Spouse B" in Spouse A's account, and "Spouse B WITH Spouse A" in Spouse B's account so that either spouse will become the sole owner of all the bonds upon the death of the other.

Married taxpayers must purchase bonds individually, not co-owners.

an individual may buy $20,000 by purchasing $10,000 by Dec. 31, 2021, and another $10,000 on Jan. 1, 2022, or later.

A couple may double those amounts for a total of $40,000, as long as they buy assets individually (they can’t be co-owners).



然后交一半税给政府。I Bond不免联邦税，也不分长期短期，太恶了


年轻的话也可以考虑EE-bond

20年保证翻倍

2 = 1.0353^20

今年底多交点税，明年要回来时叫irs 直接给你买，可以多买5000

只要5/1前买的，都能拿6个月7.1% 利率


刚读了下i bond网页，现在的fixed rate是零，这个是lifetime。inflation rate半年
一改。是不是现在买，最差的情况就是半年7.12，即使半年后composite rate降到0，
满一年取出来再减去三个月的利息，相当于年利率～2.6%。对不对？