Series I Savings Bonds: 5 things to know before you invest in them | The Financial Express

Series I Savings Bonds: 5 things to know before you invest in them

Series I savings bond is one that pays interest at both a fixed rate and a rate that is adjusted twice a year for inflation.

Series I Savings Bonds: 5 things to know before you invest in them
The Series I savings bond has as a maturity period of 30 years and until maturity or till you cash it, whichever happens first, the bond earns interest.

Inflation is running hot and the household budget is going for a toss. In a rising environment of rising prices, you need to invest your hard-earned funds in such a way that the returns at least beat inflation. While equities have proved to be an asset class that generates returns higher than inflation over the long term, not all of your savings should be into this volatile asset. Series I savings bond is an investment option that you may consider parking your funds to earn an effectively high return than bank accounts.

The family budget is in tatters as a result of the heated inflation. You must invest your hard-earned money in such a way that the returns at least outpace inflation in a rising price environment. While stocks have shown to be an asset class that produces returns higher than inflation, not all of your resources should be invested in this volatile asset. You can think about placing your money in a Series I savings bond as an investment if you want to receive a higher return than you would in a regular bank account.

Series I savings bond is one that pays interest at both a fixed rate and a rate that is adjusted twice a year for inflation. The Series I savings bond has as a maturity period of 30 years and until maturity or till you cash it, whichever happens first, the bond earns interest.

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The Series I Bond sold between May 2022 and October 2022 bears interest at an annual rate of 9.62 percent for the first six months you own it. Every six months, a new rate will be determined depending on the inflation rate and the fixed rate of this bond.

There are two options to buy Series I savings bond. You can either buy them in electronic form in through TreasuryDirect or buy them in paper form using your federal income tax refund. You can buy and hold Treasury bills, notes, bonds, Floating Rate Notes, Treasury Inflation-Protected Securities (TIPS), and savings bonds in your TreasuryDirect account. This account is accessible to you 24 hours a day, 7 days a week.

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In a calendar year, you can buy up to $10,000 in electronic I bonds in TreasuryDirect and up to $5,000 in paper I bonds using your federal income tax refund.

You pay the face value of the bond. For example, you pay $50 for a $50 bond. The bond increases in value as it earns interest. Electronic I bonds come in any amount to the penny for $25 or more. For example, you could buy a $50.23 bond. Paper bonds are sold in five denominations; $50, $100, $200, $500, $1,000.

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