We have been receiving inquiries about the US Treasury Bond called the I-bond. These series I savings bonds protect you from inflation. With an I-bond, you earn both a fixed rate of interest and a rate that changes with inflation. Twice a year, the US Treasury sets the inflation rate for the next 6 months.
Currently, that rate is 9.62%. You can lock in that rate if you purchase your I-bond before October 31st. After that, a new rate will be posted based on the inflation rate on Nov. 1, which could be lower or higher.
The following link provides education on the I-bond and details how they work https://www.treasurydirect.gov/savings-bonds/i-bonds/. For your convenience, we’ve provided some highlights to consider. But definitely read and understand all the information on the US Treasury Direct Website (the link above) before deciding to invest.
- I-bonds provide a principal guarantee as long as it is held for 12 months. They are 30-year maturity bonds but can be redeemed after 12 months.
- If held less than 5 years they will deduct the last quarter year of earned interest, but if held for more than 5 years, there is no interest deduction.
- You can purchase any amount up to $10,000 per calendar year per person (social security number) and entity (tax id number). You may invest for your minor children.*
- *The interest is taxable at ordinary income tax rates. If the money is used for qualified tuition expenses, the interest earned may be tax-free, subject to income thresholds. (Please see your tax advisor for more information.)
- The interest rate will change (up or down based on the inflation rate at that time) for new purchases after Oct 31 so you must invest by Oct. 31 to lock in the 9.62% for the next 6 months.
If you would like to learn more about I-bonds, feel free to give us a call at 309.685.9595 or schedule an appointment on our website. Our experienced financial advisors earn no fees on your purchase of I-bonds but they are always available to explain the various investment options. All communication is strictly for your benefit only.
If you are interested in purchasing an I-bond, you may go to the following website to create your account and electronically move up to $10,000 per person per calendar year into the I-bond. https://www.treasurydirect.gov/savings-bonds/buy-a-bond/
We are happy to provide you with this educational information about the US Treasury I-bond.
DISCLOSURE: Series I bonds are guaranteed by the US government as to the timely payment of principal and interest and offer a fixed rate of return and fixed principal value. A minimum term of ownership applies. Early redemption penalties may apply.