Talk of The Villages Florida
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Talk of The Villages Florida (https://www.talkofthevillages.com/forums/)
-   Investment Talk (https://www.talkofthevillages.com/forums/investment-talk-158/)
-   -   Savings Rates (https://www.talkofthevillages.com/forums/investment-talk-158/savings-rates-333790/)

Blackbird45 07-21-2022 06:57 AM
The only reason to keep money in a bank is to store money safely, it's not to make money. If you want to earn money on your money you would be better off opening up a lemonade stand on your front lawn, then in a bank.

NoMo50 07-21-2022 06:58 AM
Quote:
Originally Posted by lildfromnyc (Post 2117476)
I just started my research on IBonds. I was wondering if it was a good investment.
Yes.

Haggar 07-21-2022 07:16 AM
Quote:
Originally Posted by bragones (Post 2117514)
Ibonds are a good investment but limited. Max is $10k (per person per year). You cannot cash the bond before 12 months from purchase. There's a 3 month interest penalty if you cash the bond prior to 15 months. Of course if you keep the bond beyond 15 months, it continues to earn compound interest. Current interest rate is 9.6% and adjusted every 6 months, based on the current inflation rate. Setting up an account on treasurydirect.gov was straight forward. It took less than 15 minutes. You must link to a bank/checking account for the purchase.
If you cash I Bonds in before 5 years (not fifteen months) you lose interest for the previous 3 months.

Pommom91 07-21-2022 08:28 AM
Savings Rates
 
Quote:
Originally Posted by Michael G. (Post 2117272)
Finally....., Us "poor" people are finally getting a brake on our savings rates.

What's your gut feeling on On-Line savings accounts?

Rates very tempting.

Cheers TV People!
Series I bonds paying over 9% right now. Go to treasurydirect.gov

Blueblaze 07-21-2022 08:49 AM
Oh, yeah, it's great. Inflation is running at least 20% (always double the government's number for the real rate), and if you loan your money to the same government that created all that inflation, they'll let you have a 1.5% return! Hooray!

But at least it's better than last month, when it was only 0.5%!

For the hundred years prior to 2008 (when they nationalized the banking system), you could get a point less than the mortgage rate in any run of the mill money market fund. That would be 5% here and now. Heck, I paid for my first car (a 3-year-old Mustang!) with lawn mower money that made 4.25% in a passbook savings account -- back when inflation ran about 0% (before Nixon took us off the gold standard).

Sure is great having experts to run the world instead of that nasty old capitalism, right?

bragones 07-21-2022 11:13 AM
Quote:
Originally Posted by Haggar (Post 2117540)
If you cash I Bonds in before 5 years (not fifteen months) you lose interest for the previous 3 months.
You are indeed right. Thank you for the correction.

Edzo49 07-21-2022 04:43 PM
Series I bonds 9.62%. TreasuryDirect.com

bowlingal 07-22-2022 05:42 AM
A brake?? or a break!!

Catalina36 07-22-2022 06:22 AM
Quote:
Originally Posted by retiredguy123 (Post 2117519)
IIM is a closed end bond fund, which means that you cannot buy new shares, so you must buy them on the open market. It has a relative high expense ratio of 1.44 percent. It has provided average returns over the years compared to similar funds, but I wouldn't call it great.

An alternative fund would be the Vanguard Tax-Exempt Bond Index Fund Admiral Shares, which has an expense ratio of only 0.09 percent. Another alternative is the Vanguard Long-Term Tax-Exempt Fund, which has an expense ratio of 0.17 percent. These are not a closed end funds, so you can buy new shares directly from Vanguard, with no commission. To me, the Vanguard funds are a better alternative for a tax exempt investment. Vanguard also has three other tax exempt bond funds.

Comparing the total returns for IIM and the two Vanguard funds, IIM performed slightly better than the Vanguard index fund, but not as well as the Vanguard long term fund.
Thanks for that info. Buying new funds of IIM or buying on the open market brokerage account. Whats the difference if I am getting 5.7% fed tax free and a monthly payout?

retiredguy123 07-22-2022 06:37 AM
Quote:
Originally Posted by Catalina36 (Post 2117817)
Thanks for that info. Buying new funds of IIM or buying on the open market brokerage account. Whats the difference if I am getting 5.7% fed tax free and a monthly payout?
There is not much difference, if you are not paying a commission to buy and sell shares, and your broker is calculating your cost basis and taxable events for you. The only other difference would be if you want more liquidity. With Vanguard mutual funds, I can transfer money from a mutual fund to my money market account online, and write a check immediately. But, as I said, IIM appears to be a good investment. I don't use a brokerage account because I have always been able to find an equivalent alternative for almost any type of investment using no load mutual funds.

Caymus 07-22-2022 07:11 AM
Quote:
Originally Posted by retiredguy123 (Post 2117827)
There is not much difference, if you are not paying a commission to buy and sell shares, and your broker is calculating your cost basis and taxable events for you. The only other difference would be if you want more liquidity. With Vanguard mutual funds, I can transfer money from a mutual fund to my money market account online, and write a check immediately. But, as I said, IIM appears to be a good investment. I don't use a brokerage account because I have always been able to find an equivalent alternative for almost any type of investment using no load mutual funds.

Have you looked at Target Maturity Bond ETF's?

rsmurano 07-22-2022 07:26 AM
If you use a savings account to save money, you are always losing money. Not now but the only way to make money grow is to invest it in the market: in the Dow/Nasdaq/S&P

retiredguy123 07-22-2022 07:38 AM
Quote:
Originally Posted by Caymus (Post 2117847)
Have you looked at Target Maturity Bond ETF's?
Yes. I don't see anything wrong with them, if you want to create a bond ladder for various maturity dates. Personally, I don't like any mutual fund or ETF that is based on a specific target date for cashing out. Most people cannot foresee the future and when they will need to spend their money. But, for bond investing, when interest rates are rising, I would not buy any bonds, funds, or ETFs where the bonds have a maturity date of more than about 8 years or so. Too risky. I have my bond investments in the Vanguard Total Bond Market Index Fund, and the Vanguard Short Term Bond Index Fund. I also have a small percentage in the Vanguard High Yield Bond Fund (junk bonds). No long term bond funds. Vanguard funds have such a low expense ratio, that I don't see an advantage to using ETFs at all.

OhioBuckeye 07-22-2022 08:03 AM
Ohiobuckeye
 
I feel just like everyone else. We’re all caught between a rock & a Hard Place. I think we all have to do what they give us or go somewhere else & let them tell you the same thing. It’s a sign of the times. We citizen’s are in hard times!

kkingston57 07-22-2022 08:14 AM
Quote:
Originally Posted by OhioBuckeye (Post 2117884)
I feel just like everyone else. We’re all caught between a rock & a Hard Place. I think we all have to do what they give us or go somewhere else & let them tell you the same thing. It’s a sign of the times. We citizen’s are in hard times!
For the entirety of my adult life, have felt this way. Now, due to age, we have less choices. Have been investing in preferred stocks. Steady rate. My broker tells me that he can sleep at night.


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