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The 9.62% rate is for the six-month period, after that it's probably falling to 6+%, which is still better than anything else you'll find out there in terms of

by aksss 4y ago

The 9.62% rate is for the six-month period, after that it's probably falling to 6+%, which is still better than anything else you'll find out there in terms of inflation-proofing cash. But it requires a five-year commitment, with a minimum of 12 months before you can pull your money out, but you'll lose the final three months of interest if you pull your money before five years. $10k per SSN with no household limit. I believe today (28th) is last day to pull the trigger on this. I Bonds make sense if you have a bunch of cash like an emergency day fund sitting in a savings account. In theory at these rates you can inflation-proof more than 10k by putting only 10k in. I think if you had a 20-30k emergency fund, I Bonds make a lot of sense. But if you have 20-30k sitting around for project work in the coming year (where you need access to the cash), it isn't really a good fit.

Proven 4y ago
nostrademons 4y ago
Also not really a good fit for anything you're actively planning to trade or invest with. If you're expecting stocks to drop and holding cash so you can pick them up cheaper later, I-bonds don't work for that; you won't be able to access the cash when you want to re-enter the market.
- junar 4y ago
  You're only completely locked in for the first year. From year 2 through year 5, you can cash in at any time, but lose the last 3 months of interest. After that, you're free to cash in whenever without penalty, or it will be automatically cashed in after a total of 30 years. https://web.archive.org/web/20221028091214/https://www.treasurydirect.gov/savings-bonds/cashing-a-bond/ https://web.archive.org/web/20221028091214/https://www.treas... (I'd link to TD directly, but it looks like it's being hammered right now.)
  - nostrademons 4y ago
    That's still not a great deal for people looking to preserve capital and invest after a crash. It's very likely that the worst of the market declines will be within the next year. Markets are forward-looking, so once they realize that there will be long-term economic pain, they correct quickly. Oftentimes the steepest stock recovery is during the worst of the unemployment pain.
bcx 4y ago
Does it only fall one time to 6% in 6 months or will it track against inflation over time? (i.e. short-term return > long term return?)
- Arete314159 4y ago
  It tracks a certain calculation of inflation. There are youtubers who can calculate it out very precisely. But in general terms it tracks inflation, and resets every 6 months.
- aksss 4y ago
  Every six months the rate changes. The rate of an I Bond is called the “combined rate”, as it’s based on a formula using an annual fixed rate and a semi-annual inflation rate. The formula is [fixed rate + (2 x semiannual inflation rate) + (fixed rate x semiannual inflation rate)]. The fixed rate has been and probably will remain 0%. The inflation rate is what has been fluctuating, and gets set every 6 months.

by aksss 4y ago

Proven 4y ago

nostrademons 4y ago

Also not really a good fit for anything you're actively planning to trade or invest with. If you're expecting stocks to drop and holding cash so you can pick them up cheaper later, I-bonds don't work for that; you won't be able to access the cash when you want to re-enter the market.

junar 4y ago
You're only completely locked in for the first year. From year 2 through year 5, you can cash in at any time, but lose the last 3 months of interest. After that, you're free to cash in whenever without penalty, or it will be automatically cashed in after a total of 30 years. https://web.archive.org/web/20221028091214/https://www.treasurydirect.gov/savings-bonds/cashing-a-bond/ https://web.archive.org/web/20221028091214/https://www.treas... (I'd link to TD directly, but it looks like it's being hammered right now.)
- nostrademons 4y ago
  That's still not a great deal for people looking to preserve capital and invest after a crash. It's very likely that the worst of the market declines will be within the next year. Markets are forward-looking, so once they realize that there will be long-term economic pain, they correct quickly. Oftentimes the steepest stock recovery is during the worst of the unemployment pain.

bcx 4y ago

Does it only fall one time to 6% in 6 months or will it track against inflation over time? (i.e. short-term return > long term return?)

Arete314159 4y ago
It tracks a certain calculation of inflation. There are youtubers who can calculate it out very precisely. But in general terms it tracks inflation, and resets every 6 months.
aksss 4y ago
Every six months the rate changes. The rate of an I Bond is called the “combined rate”, as it’s based on a formula using an annual fixed rate and a semi-annual inflation rate. The formula is [fixed rate + (2 x semiannual inflation rate) + (fixed rate x semiannual inflation rate)]. The fixed rate has been and probably will remain 0%. The inflation rate is what has been fluctuating, and gets set every 6 months.