[Stu from NYC]

Originally Posted by dewilson58

Much rather have Villagers hold our debt than China. Do I need to explain economics to you?

You probably like Russian oil too.

Do I need to explain basic economics to you? Favorite oil is olive oil by the way.

[Rainger99]

Originally Posted by rustyp

If you purchase an I bond before the end of this coming week(end of April) you will be guaranteed 7.12% interest for the first 6 months and then 9.62 % interest for the following 6 months. After that the rates of your bond changes every 6 months (may and nov) indexed to inflation. You must hold for one year. If cashed in between years 2 - 5 you forfeit the last three months interest. After 5 years no penalty. These I bonds are issued solely by the government. The only place to purchase is TreasuryDirect - Home. Google I Bonds on YOUTUBE - lots of videos at present.

I know that the bonds are paying 9.62 % interest and that the rates change on May 1 and November 1. Is the 9.62% from the time you buy them? Or is it from May 1? For example, if I buy one one on October 15, do I only get the 9.62% for 16 days? Or do I get the 9.62% for six months from date of purchase - whether I buy it on May 1 or October 31?

[dewilson58]

Originally Posted by Stu from NYC

Do I need to explain basic economics to you?.

[rustyp]

Originally Posted by Robbb

I get the 10% they are paying for the first year, but after that aren't they paying 0% for the next 4 years that you are required to hold them. Is this correct?

Originally Posted by Rainger99

I know that the bonds are paying 9.62 % interest and that the rates change on May 1 and November 1. Is the 9.62% from the time you buy them? Or is it from May 1? For example, if I buy one one on October 15, do I only get the 9.62% for 16 days? Or do I get the 9.62% for six months from date of purchase - whether I buy it on May 1 or October 31?

Believe it or not the way it works is whatever the present 6 months rate is at the time of purchase that is the rate you get for the next 6 months while you hold the bond. Thus a bond purchased at the end of April will expire just prior to Nov this year. End of April - end of Oct will be 7.2%. Well the 6 month expiration is now just prior to the Nov 2022 announcement thus you get the May rate (9.62%) for the next 6 months. Couple this to the idea you can cash out after one year (with last 3 months interest forfeited as penalty since 5 years are not up) you know exactly what you are getting for a whole year with no unknown risk. Hope it helped. Hard to put into words. Go watch a youtube video. There is a lot of them on this subject. Search I bonds for beginners.

[Blueblaze]

Gee thanks, Uncle Sam!

So you're saying I can get a tenth of the real inflation rate, on $20k of the nest egg that took us 30 years to save? Wow, that's almost as much as a burger flipper makes! Let's see, when you let me have it back, five years of 100% inflation from now, that'll be worth, what, one month's groceries and CDD fees? Gee, a whole other month before we go on the Alpo diet!

And I thought you were mad at me or something!

But howcome only $20K? Since all it costs you is funny money, anyway, why not let us do the whole thing? Even 10% is better than playing Wall Street Roulette!

[Rainger99]

Originally Posted by rustyp

Believe it or not the way it works is whatever the present 6 months rate is at the time of purchase that is the rate you get for the next 6 months while you hold the bond. Thus a bond purchased at the end of April will expire just prior to Nov this year. End of April - end of Oct will be 7.2%. Well the 6 month expiration is now just prior to the Nov 2022 announcement thus you get the May rate (9.62%) for the next 6 months. Couple this to the idea you can cash out after one year (with last 3 months interest forfeited as penalty since 5 years are not up) you know exactly what you are getting for a whole year with no unknown risk. Hope it helped. Hard to put into words. Go watch a youtube video. There is a lot of them on this subject. Search I bonds for beginners.

Thanks!!

[rustyp]

[QUOTE=Blueblaze;2091758]Gee thanks, Uncle Sam!

So you're saying I can get a tenth of the real inflation rate, on $20k of the nest egg that took us 30 years to save? Wow, that's almost as much as a burger flipper makes! Let's see, when you let me have it back, five years of 100% inflation from now, that'll be worth, what, one month's groceries and CDD fees? Gee, a whole other month before we go on the Alpo diet!

And I thought you were mad at me or something!

But howcome only $20K? Since all it costs you is funny money, anyway, why not let us do the whole thing? Even 10% is better than playing Wall Street Roulette![/QUOTE

One reason is the government does not want mass exodus from the stock market every time there is a hiccup. It would collapse the economy.

There is a way for a married couple to do up to $45K per year . Not easy but possible. I know we have been raised in the I want it all and I want it now society but if one would have started and maxed out a few years back the nest egg getting a little bigger. So if it is so insignificant as many complain max out what you can today. If it is insignificant it won't put a dent into whatever sure fire investment scheme you've discovered. Just a little tiny bit of insurance.

[laceylady]

Originally Posted by CoachKandSportsguy

Looks like everyone is not alone in reaching for yield during increasing inflation times.

Sure as heck beats CDs

Do you buy them on the internet, from a bank or from an investment advisor? Also, when it is time to redeem them, where do you do this?

[retiredguy123]

Originally Posted by laceylady

Do you buy them on the internet, from a bank or from an investment advisor? Also, when it is time to redeem them, where do you do this?

You can only buy them from the U.S. Treasury with a Treasury Direct account. To me, that is an obstacle. Also, the $10K annual purchase limit makes it not worth the effort for a lot of investers.

[rustyp]

Originally Posted by retiredguy123

You can only buy them from the U.S. Treasury with a Treasury Direct account. To me, that is an obstacle. Also, the $10K annual purchase limit makes it not worth the effort for a lot of investers.

The Treasury Direct website (I know this will be hard to believe) was easy peasy. I set up an account and purchased an I bond in less than 10 minutes with no confusion.

[M2inOR]

Originally Posted by rustyp

The Treasury Direct website (I know this will be hard to believe) was easy peasy. I set up an account and purchased an I bond in less than 10 minutes with no confusion.

Same here. Online account for each of us. Electronic record. Linked to bank account.

[Aloha]

The $10,000 purchase limit per year is problematic for many. At 9%, with the 3 month penalty, $675 return for the year. With the current inflation rate, sort of a wash, but better than most other choices. Raising the $10,000 limit would be awesome.

[Babubhat]

Qyld and Xyld generate ten percent. Bond limits too low to be material to me

[rustyp]

Originally Posted by Babubhat

Qyld and Xyld generate ten percent. Bond limits too low to be material to me

Are those funds FDIC insured and guaranteed 10% rate of return ?

[dewilson58]

Originally Posted by Babubhat

Qyld and Xyld generate ten percent. Bond limits too low to be material to me

Fake News!!!

Year-to-Date QYLD = (5.9%)
Year-to-Date XYLD = (1.1%)

NEGATIVE RETURNS.