By Kevin Janiec, CFP®, MBA
You have likely heard plenty about the current inflation environment.
However, you might not have heard much about Series I Savings Bonds (I bonds).
Here’s a timely FYI on what I Bonds are and how they work:
- I bonds are inflation-protected, interest-bearing savings instruments that are purchased directly through the US Treasury.
- The yield is calculated and compounded semi-annually in May and November based on a fixed rate and inflation metric (CPI). Current rates on these vehicles are available at TreasuryDirect.gov.
- There is a $10,000 purchase limit per person (children included) in each household on an annual basis. These investments can be purchased through an individual account at Treasurydirect.gov.
- They have a 1-year mandatory holding period. To redeem these bonds in less than 5 years, you pay a penalty of the previous 3 months’ interest. After 5 years, you can redeem the bonds penalty-free.
- You cannot purchase these investments within an IRA, 401(k), or joint account.
Additional Frequently Asked Questions are available at TreasuryDirect.gov.
If you’re a client, we can discuss Series I Bonds further as we meet in the near future. Otherwise, if you have any questions, don’t hesitate to give us a call.
Investment Advice offered through FC Advisory LLC, a registered investment adviser doing business as “New Wealth Project” and as “Financial Coach”. This content is provided for informational purposes only. Views and opinions expressed are those of the authors and do not necessarily reflect those of FC Advisory, LLC. Information provided is not and should not be interpreted as investment, tax, legal, or other professional advice or recommendation by FC Advisory, LLC or the members of our firm. Always consult the appropriate professional regarding your specific situation before implementing any options presented or inferred. FC Advisory LLC, All rights reserved.
This content may contain hyperlinks to external websites which are owned and operated by non-affiliated third parties. If you use these hyperlinks you will leave our website; we bear no responsibility for the accuracy, legality, or content of these external sites or for that of subsequent links. No warranties or representations are being made about linked websites, the third parties they are owned and operated by, the information contained on them, the accuracy, completeness, or timeliness of their content, or the suitability or quality of any of their products or services.