Cashing in on Cash
The interest rate on Series I savings bonds is now 9.62% through October 2022. I have discussed these treasury-backed savings bonds with many of you in recent client meetings or over the phone, but if I have not, please check out Individual - Series I Savings Bonds (treasurydirect.gov). Every market correction and economic cycle is unique, but what this cycle has in common with the 2008-2009 period is that many classifications of bonds are moving in tandem with stocks. Additionally, we are all aware of the impact that price increases (inflation) are having across multiple categories of goods and services. These series I savings bonds provide an excellent inflation hedge. An individual can purchase up to $10,000 of the bonds per year, but there are ways to buy more ($20,000 for a married couple, buying some as a gift, etc.) The bondholder does not actually earn the full 9.62%. The interest rate is a composite rate, which is a combination of two different interest rates. It is best to hold them for more than a year so as not to forfeit interest. If you hold them for less than five years, you forfeit the last three months of interest.
For more information, check out these other articles:
For a quick take:
The following article refers to the previous and slightly lower 7.12% interest rate:
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Securities America, Inc., Member FINRA/SIPC. Securities offered through Securities America, Inc. Member FINRA/SIPC. Advisory services are offered through Securities America Advisors, Inc. This material is not intended to replace the advice of a qualified attorney or tax adviser. Before making any financial commitment regarding the issues discussed herein, consult with the appropriate adviser.