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Series I Savings Bonds paying 7.12% interest.

Series I Savings Bonds paying 7.12% interest.

December 08, 2021

The US Government has a holiday present for you. They are paying 7.12% today (12/18/21) to borrow your money. How? Through Series I Savings Bonds.

You may not hear about Series I Savings Bonds from financial professionals but you might want to go onto and put $10K each into I bonds before the end of the year. You can also contribute up to $5K of your tax refund in addition.

The deal is so good the US Govt will only allow you to put in $10K per person per year, (plus $5K tax refund.) Your investment can't lose money and is backed by the full faith and credit of the United States.

What are they? I Bonds are inflation protected savings bonds. They pay you a rate of interest plus the current inflation rate to give you a composite rate of 7.12%. This will change with the inflation rate. So, the beauty is not only that I Bonds can't fall in value, but they are the only thing guaranteed to keep up with the rate of inflation. Meanwhile, money left in the bank is losing up to 7% a year in real inflation adjusted terms.

You usually have to purchase I Bonds yourself rather than going through your financial advisor. The amount allowed may be small, but for "safe" money during this period of high inflation nothing else comes close. And each family member can buy one - and in January you can buy again for 2022! Unfortunately, you will have to pay Federal tax on the interest even though the government is simply paying you to keep up with inflation...

While I Bonds have a 30-year maturity, they can be redeemed after being held for at least 12 months. Investors who redeem I Bonds between 12 months and 5 years after issue will forfeit the last 3 months of interest, but I Bonds held for more than 5 years can be redeemed at their current value. But even if you hold them for only a few months, and have to forgo the final three months of interest, the total interest you will earn will likely beat any comparable alternative.

You can buy them and read more including important disclosures on the US Govt link below:

One other disclosure: is not the most user friendly. My wife was tearing her hair out trying to navigate and make the purchase on her account. But ultimately she succeeded and, with persistence, so can you! Reach out to us if you need help or advice. 

Wellacre Global Wealth Advisors, Financial Planning Consultants, Santa Monica, CA