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You're gonna invest that 10k somewhere in all likelihood, a risk free 10% is pretty much unbeatable, it's higher than most high-yielding (and vice) stocks, but

• ghaff 4y ago
  I don't love opening a new account to get some incremental returns on a relatively modest allowed investment. But, while I don't go to a lot of trouble to optimize everything, for me this crfossed the line into "why not" (but then, I didn't have to jump through any hoops.)
• lotsofpulp 4y ago
  As other comments have indicated, the time and effort to actually invest the $10k in ibonds is considerable given the difficulty of using the website. I also want my cash to be accessible within a few days, so I prefer FDIC insured savings accounts. For locking up money for months or a year in an ibond, the annual gain compared to a savings accounts is only a maximum of $700 or so. The rest I invest in equities, which assuming the US has a functioning society in 5, 10, or 20+ years, will be worth far more.
  • bombcar 4y ago
    It's entirely possible that for a bit more hoop-jumping you could beat the 10% by continually churning where your money is for the signup bonuses; again, not likely actually worth it considering the time.
    • giantg2 4y ago
      What sign-up bonuses?
      • bombcar 4y ago
        Things like https://account.chase.com/consumer/banking/seo https://account.chase.com/consumer/banking/seo or https://www.bankrate.com/investing/best-brokerage-account-bonuses/ https://www.bankrate.com/investing/best-brokerage-account-bo... or similar. They're not quite as good as they used to be, but if you had $10k in cash you could cycle through some and collect a few $hundreds.
        • giantg2 4y ago
          Interesting. Yeah, I've haven't seen many of those offers in recent year. I didn't know they were still around.
  • satellite2 4y ago
    Your conclusion is debatable. Europe is mostly a functioning society (and has been for 20+ years) but its equity market has not necessarily beaten the risk free asset (depending on the country). So I would not necessarily correlate a country's equity market perfomance with its well-being.
  • giantg2 4y ago
    "ibonds is considerable given the difficulty of using the website." First, this is ridiculous. It was pretty easy to set up. Yeah, the virtual keyboard is weird and there's some waiting with the verification, but it's trivial effort. "I also want my cash to be accessible within a few days" Now we're comparing apples to oranges. If you need the cash in a few days (kind of odd/rare to begin with), then you want a saving account not an investment. That said, withdrawing your I bond capital does not take months or years (withdraw anytime with only a loss in interest if less than a year). "The rest I invest in equities, which assuming the US has a functioning society in 5, 10, or 20+ years, will be worth far more." Depends on the equities and your definition of a functioning society. It's more likely to be flat, at least in real terms, over the next decade.
    • lotsofpulp 4y ago
      > Depends on the equities and your definition of a functioning society. It's more likely to be flat, at least in real terms, over the next decade. I am under the assumption that the US’s leaders have every incentive to keep broad market equity values going up, even if it means the USD loses purchasing power. There are a ton of leaders with equity ownership that want to see it go up, as well as political support from constituents with IRA/401k/etc, as well as the innumerable underfunded defined benefit pension plans across the country that rely on broad market equity values to keep rising to meet their projected expenses. For that reason, I consider an SP500 ETF like VOO or even VTI to be relatively safe and track inflation over the long term.
  • BbzzbB 4y ago
    I mean... which one is it? Is $10k too small an amount to be worth filling a form, or too large an amount that you need it accessible within a few days? I see this sentiment a lot in this thread, but it's so contradictory to me. Only a raging bull market like the one we've gotten out of makes a 10% government backed rate of return sound bad.
    • lotsofpulp 4y ago
      The increased interest return on the $10k is insufficient not enough for me to sign up for and then manage an account at treasurydirect.gov. Of course, it could be for others. My philosophy is I keep a certain amount of physical cash (in case electronic payments go down), I keep digital cash (in case my income gets disrupted), and the rest is invested. I already have the digital cash in an FDIC insured savings account earning 2.4%, and I do not need to worry about splitting it up into per year amounts or when I can and cannot withdraw it and how much. It is more of a simplicity thing I guess for me, and the abnormal inflation calculations which lead to the last 18 months of exceptional i bond returns probably will not last.
• JauntTrooper 4y ago
  10% of $10,000 is $1,000, but you have to pay federal income taxes on it. So you're looking at getting $600 - $800 to tie up $10,000 for a year, and you have to go through hoops and a cumbersome website to do it. It's a better deal than other fixed income investments right now, but with an after-tax return that's guaranteed to be worse than inflation, it's hard to get excited about it.
  • giantg2 4y ago
    What are these hoops people keep talking about? I didn't find it hard at all.