Are U.S. Government I Bonds the Perfect Place To Store Cash?
fyi.moneyguy.com
Series I savings bonds were first issued by the U.S. Treasury in September of 1998, but have flown under the radar until recently. I bonds were designed to offer Americans a way to protect the purchasing power of their money in a safe investment backed by the U.S. government. The bonds aim not only to keep up with inflation, but offer a return slightly above the rate of inflation.
Why no mention of laddering your emergency fund into I bonds over time? Been doing this for years. Started out with $500 every 6 months until my entire emergency fund was available to me. A 3 month interest penalty is nothing, especially considering the vastly higher rate being paid at the moment compared with savings accounts.
I-bonds should be considered step 7A of the FOO!!!
Given 0% real returns, its guaranteed that your future self will retain $10k in spending power. The fact that Treasury Direct is so clunky and hard to view means that the account is likely to be out of sight and mind. Therefore I-bonds are great for the use cases of an emergency account, a dedicated rebalancing pool, or retirement savings.
Actually, the limit is $10k per registration. One SSN can have multiple accounts. My wife and I each bought $10k last year and this on our respective SSNs. We also bought $10k last year and this in name of our family trust under my SSN. Treasury Direct is happy with that. If you own a business, your ssn or not, could be another registration.
Why no mention of laddering your emergency fund into I bonds over time? Been doing this for years. Started out with $500 every 6 months until my entire emergency fund was available to me. A 3 month interest penalty is nothing, especially considering the vastly higher rate being paid at the moment compared with savings accounts.
I-bonds should be considered step 7A of the FOO!!!
Given 0% real returns, its guaranteed that your future self will retain $10k in spending power. The fact that Treasury Direct is so clunky and hard to view means that the account is likely to be out of sight and mind. Therefore I-bonds are great for the use cases of an emergency account, a dedicated rebalancing pool, or retirement savings.
Actually, the limit is $10k per registration. One SSN can have multiple accounts. My wife and I each bought $10k last year and this on our respective SSNs. We also bought $10k last year and this in name of our family trust under my SSN. Treasury Direct is happy with that. If you own a business, your ssn or not, could be another registration.
This article is very similar to Money's January 2022 digital cover, which features 22 ways to make 2022 the best money year of your life
No, high yield crypto stable coin staking and earning interest is a much better bet for short term needed flexible cash reserve (not emergency fund).