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05-03-2017, 06:32 AM
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#1
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Recycles dryer sheets
Join Date: Nov 2013
Location: baton rouge
Posts: 141
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I bonds rates
From Treasury Direct:
The composite rate for I bonds issued from May 1, 2017, through October 31, 2017, is 1.96%. This rate applies for the first six months you own the bond.
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05-03-2017, 06:34 AM
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#2
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Thinks s/he gets paid by the post
Join Date: May 2008
Location: Cooksburg,PA
Posts: 1,873
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The fixed rate is zero. No new investment for me.
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Free to canoe
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05-03-2017, 06:36 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Jan 2013
Posts: 3,413
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Fixed rate is zero. I'll pass.
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05-03-2017, 06:55 AM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2013
Location: Limerick
Posts: 5,655
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We already maxed out this year. Still a better rate than most safe investments and offers future inflation protection and tax deferral on income.
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05-03-2017, 07:14 AM
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#5
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Moderator Emeritus
Join Date: May 2007
Posts: 12,901
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Quote:
Originally Posted by Dash man
We already maxed out this year. Still a better rate than most safe investments and offers future inflation protection and tax deferral on income.
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+1
Already maxed out for the year plus we asked our tax refund to be paid as paper I-bonds as well.
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05-03-2017, 07:53 AM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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Quote:
Originally Posted by Dash man
We already maxed out this year. Still a better rate than most safe investments and offers future inflation protection and tax deferral on income.
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While the interest cancels out inflation, you still lose after paying taxes. It is true that the alternatives are terrible also. I just checked to see that 5-year CDs are paying 2.3%, while 1-year CDs pay 1.4%. The inflation rate for the last 12 months (3/2016-3/2017) runs about 2.4% annual rate.
I still have about 8% of my stash in I bonds, bought more than 10 years ago when I got 1.1% above inflation. I used to have more, percentage wise, but the stock portion outgrew the I bonds. I have not bought any more since.
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05-03-2017, 09:55 AM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2013
Location: Limerick
Posts: 5,655
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Quote:
Originally Posted by NW-Bound
While the interest cancels out inflation, you still lose after paying taxes. It is true that the alternatives are terrible also. I just checked to see that 5-year CDs are paying 2.3%, while 1-year CDs pay 1.4%. The inflation rate for the last 12 months (3/2016-3/2017) runs about 2.4% annual rate.
I still have about 8% of my stash in I bonds, bought more than 10 years ago when I got 1.1% above inflation. I used to have more, percentage wise, but the stock portion outgrew the I bonds. I have not bought any more since.
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I just bought a 2.3% CD from Synchrony Bank last week. CDs are taxable while I Bonds are tax deferred. But they both a good place to put your "safe" money. Neither are intended to beat inflation and I don't think there's a bond or CD out there that could. I have some I Bonds from the old days, but in small denominations that don't matter much. My goal with safe money is to not lose any more value over time than necessary. I view Gold/Silver as protection against hyperinflation. My stocks and real estate investments are designed for income and growth, carefully selected to not hurt too bad in a market collapse by choosing companies that provide things people need no matter what.
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05-03-2017, 06:01 PM
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#8
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Gone but not forgotten
Join Date: Jul 2012
Location: Peru
Posts: 6,335
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Appreciate the reminder... Checked, and my 2003 bonds are paying 6.21%.
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05-04-2017, 02:40 AM
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#9
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 1,183
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I bought all of my 30K worth of I-bonds in the same year back when real rates were so high (3 to 3.4%)
I will actually have to cash them in over a period of 3 tax years to lower my tax bill so as to stay in the 15% bracket. So some will be cashed in at the 28.5 year mark, some at the 29.5 year mark, etc.
And during those 3 tax years, I will not be able to IRA-to-Roth convert.
This strategy seems to make sense, even if real rates are still effectively 0 at that time (for other fixed income investments) and I am losing out on a year and a half or a half year of growth at 3% real rates. The value of only paying 15% tax instead of 25% tax seems higher.
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05-05-2017, 07:28 AM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 17,911
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Got my stash back when they actually paid interest (in the 3% range IIRC). They will likely outlive me unless I have a need for the money. I am glad I have them even though they are a relatively small portion of my stash. They used to be a really good deal. Now, they aren't worth the effort IMO. YMMV
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