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I've never bought a bond in my life (I didn't even know what they were) until someone told me they are currently offering 9.62% risk free returns! There's a ver

by gfd 4y ago

I've never bought a bond in my life (I didn't even know what they were) until someone told me they are currently offering 9.62% risk free returns! There's a very low limit on how much you can buy per year but this seems like a no brainer to me. https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm https://www.treasurydirect.gov/indiv/research/indepth/ibonds...

Invictus0 4y ago
Might not shock you to learn that the treasury has less than stellar customer service. I signed up to buy some I bonds and was told they couldn't verify my information (??? -- I gave them my SSN) and I would have to mail them a letter to proceed with signup.
- giobox 4y ago
  For sure, but I wouldn't recommend someone ignore things like Treasury I Bonds on account of the shitty website/customer service - especially at current rate above 9 percent. I had similar issues, they do resolve them if you get in touch, albeit it took a few weeks to authorize my account.
SketchySeaBeast 4y ago
That rate is only for 6 months: "That rate is applied to the 6 months after the purchase is made. For example, if you buy an I bond on July 1, 2022, the 9.62% would be applied through December 31, 2022." And here[1]: "What's the interest rate on an I bond you sell today? For the first six months you own it, the Series I bond we sell from May 2022 through October 2022 earns interest at an annual rate of 9.62 percent. A new rate will be set every six months based on this bond's fixed rate (0.00 percent) and on inflation." I'm not sure what the next return is - either way given the current mark that's excellent, just important to know that there is a definite time limit on that interest rate. [1] https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_ibuy.htm https://www.treasurydirect.gov/indiv/research/indepth/ibonds...
- HellzStormer 4y ago
  Yep, and if you cash it in less than 5 years, you lose the last 3 months of interests.
ur-whale 4y ago
With an inflation at 8%, that's ... I'll let you do the math.
- SketchySeaBeast 4y ago
  that's ... a lot better than investing in the S&P right now.
- spywaregorilla 4y ago
  That is the point of these bonds. They're indexed to inflation. Which is great when inflation is high.
- thehappypm 4y ago
  Whats a better alternative? Every other investment seems negative right now..
DocTomoe 4y ago
No such thing as a risk-free investment, especially not high-interest government bonds. Just ask Greece, ca. 2010.
- staticman2 4y ago
  A inflation linked government bond is pretty much by definition risk free.
- gamegoblin 4y ago
  Greece does not print its own currency, the US does. Greece uses the Euro, which is printed by the ECB, which is not controlled by the Greek government. The US government can always pay its debts. Doing so may cause inflation, so the real return on that investment may not be great, but the nominal return is essentially risk-free. Greece's relationship to the Euro is more akin to an individual US state's relationship to the Dollar. No US state has Greek levels of debt. Greece's debt-to-GDP ratio was up to 180%. Most US states run at a ratio closer to 5-15%.

by gfd 4y ago

Invictus0 4y ago

Might not shock you to learn that the treasury has less than stellar customer service. I signed up to buy some I bonds and was told they couldn't verify my information (??? -- I gave them my SSN) and I would have to mail them a letter to proceed with signup.

giobox 4y ago
For sure, but I wouldn't recommend someone ignore things like Treasury I Bonds on account of the shitty website/customer service - especially at current rate above 9 percent. I had similar issues, they do resolve them if you get in touch, albeit it took a few weeks to authorize my account.

SketchySeaBeast 4y ago

That rate is only for 6 months: "That rate is applied to the 6 months after the purchase is made. For example, if you buy an I bond on July 1, 2022, the 9.62% would be applied through December 31, 2022." And here[1]: "What's the interest rate on an I bond you sell today? For the first six months you own it, the Series I bond we sell from May 2022 through October 2022 earns interest at an annual rate of 9.62 percent. A new rate will be set every six months based on this bond's fixed rate (0.00 percent) and on inflation." I'm not sure what the next return is - either way given the current mark that's excellent, just important to know that there is a definite time limit on that interest rate. [1] https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_ibuy.htm https://www.treasurydirect.gov/indiv/research/indepth/ibonds...

HellzStormer 4y ago
Yep, and if you cash it in less than 5 years, you lose the last 3 months of interests.

ur-whale 4y ago

With an inflation at 8%, that's ... I'll let you do the math.

SketchySeaBeast 4y ago
that's ... a lot better than investing in the S&P right now.
spywaregorilla 4y ago
That is the point of these bonds. They're indexed to inflation. Which is great when inflation is high.
thehappypm 4y ago
Whats a better alternative? Every other investment seems negative right now..

DocTomoe 4y ago

No such thing as a risk-free investment, especially not high-interest government bonds. Just ask Greece, ca. 2010.

staticman2 4y ago
A inflation linked government bond is pretty much by definition risk free.
gamegoblin 4y ago
Greece does not print its own currency, the US does. Greece uses the Euro, which is printed by the ECB, which is not controlled by the Greek government. The US government can always pay its debts. Doing so may cause inflation, so the real return on that investment may not be great, but the nominal return is essentially risk-free. Greece's relationship to the Euro is more akin to an individual US state's relationship to the Dollar. No US state has Greek levels of debt. Greece's debt-to-GDP ratio was up to 180%. Most US states run at a ratio closer to 5-15%.