Koolau
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Kiplinger magazine had a short article on using I Bonds as a short term (1-year) play to improve interest rates over most banks' CDs of equivalent term. Right now, according to the article, the rate on I bonds is 0.00%, but for the next 6 months, the inflation portion is 4.66% (IIRC). The idea is that, even if the following 6 month inflation interest drops to zero (not likely) one would make (4.66%/2)PA at a minimum (2.33%PA). You can't cash the I bonds for one year and you lose the last 3 months interest if you cash between 1 year and 5 years. Still, with a floor interest rate of 2.33%, this might be of value to some folks wishing to park money for a year. The insane limits to purchasing I bonds are $5K/individual (or $10K/couple) as paper bonds. A similar amount can be purchased electronically. So, a couple could conceivably purchase up to $20K in I bonds to use this short-term play. An interesting side note. Purchasing at the end of the month picks up the whole month's accrued interest. So, for the first 6 months, this would be equivalent to about 5.5/2%PA.
DW and I will probably pick up the paper version before June ends.
As always, YMMV.
DW and I will probably pick up the paper version before June ends.
As always, YMMV.
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