17-Year High: May I-Bond Fixed Rate | Buy I-Bonds Now Or Later (2024)
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- Опубликовано: 2 май 2024
- Here's what we're covering today:
1. The May I-Bond rate & why we will keep buying I-Bonds
2. What your new rate will be, depending on when you bought your I-Bonds
3. Would we buy new I-Bonds in May or in October? This is always one of the first questions we get when a new I-Bond rate is announced
📢 Learn all about bond investing & how to build a bond portfolio while rates are still high!
⭐ Bond Beginners (our foundational-level bond course): www.diamondnestegg.com/bond-beginners
⭐ Bond Masters (our intermediate-level bond course): www.diamondnestegg.com/bond-masters
⭐ Or get both & save $100: www.diamondnestegg.com/home#_...
⭐ Join our super-supersaver membership for regular market updates & monthly live member Q&As 👉 / @diamondnestegg
⭐ What's The Difference: Bond Courses vs RUclips Membership: • Bond Investing Basics ...
#jenniferlammer #bonds #fixedincome
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WATCH NEXT
How To Build A Bond Ladder: • How To Build A Bond La...
TIPS vs I-Bonds: • Buy I-Bonds or TIPS 20...
I-Bond Fixed Rate Formula: • May I-Bond Rate Predic...
*Sources can be found in first pinned comment.
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******Learn all about bond investing & how to build a bond portfolio while rates are still attractive!
Bond Beginners (our foundational-level bond course): www.diamondnestegg.com/bond-beginners
Bond Masters (our intermediate-level bond course): www.diamondnestegg.com/bond-masters
Or get both & save $100: www.diamondnestegg.com/home#_paa2isucf
Join our super-supersaver membership for regular market updates & monthly live member Q&As ruclips.net/channel/UCnexoc6tvesvcCEzZhmI-Agjoin
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WATCH NEXT
Our Bond Courses vs RUclips Membership | Which Is Right For You: ruclips.net/video/H5h4Eyh0hjo/видео.html
Bond Beginners Course Sneak Peak | I-Bonds vs TIPS: ruclips.net/video/uXPzbje1g2E/видео.html
Bond Masters Course Sneak Peak | How To Build A Bond Ladder: ruclips.net/video/p90IDmXn19s/видео.html
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Here is the overview for Bond Beginners:
1. Bond Basics
What A Bond Is & How A Bond Works
Why Invest In Bonds
New Issue vs Secondary Market Bonds
Interest Rates & Bond Prices
Current Yield & Yield To Maturity
Always Remember This!
Buying At Par, Above Par & Below Par
Different Types Of Bonds
Wrap-Up
2. The Risks Of Bond Investing
Seven Key Bond Risks
Credit Risk
Interest Rate Risk
Reinvestment Risk/Call Risk
Inflation Risk
Liquidity Risk
Currency Risk & Country Risk
Bond Risk Mitigation Strategies
Wrap-Up
3. US Treasuries Overview
What Are US Treasuries
Why Invest In Treasuries
Where Can You Buy Treasuries
How Are Treasuries Taxed
Wrap-Up
4. Treasury Bills
What Are Treasury Bills (T-Bills)
When Do T-Bill Auctions Happen
Where Should You Buy At Auction
Auto-Roll When Buying At Auction
Where To Find Recent Auction Results
High Rate vs Investment Rate
Reopening Auctions
Cash Management Bills (CMBs)
Buying & Selling On Secondary Market
Wrap-Up
5. Treasury Notes & Bonds
What Are Treasury Notes & Bonds
When Do Auctions Happen
Buying Treasury Notes & Bonds
Auction High Yield vs Interest Rate
Floating Rate Notes (FRNs)
Treasury Zeros (STRIPS)
Wrap-Up
6. TIPS (Inflation-Protected)
What Are TIPS
When Do TIPS Auctions Happen
Nominal vs Real Yields
Negative Yields
How Do You Adjust TIPS For Inflation
Taxes On Phantom Income
Secondary Market Liquidity
Wrap-Up
7. I-Bonds (Inflation-Protected)
What Are I-Bonds
How Does I-Bond Interest Work
I-Bonds vs TIPS
The Annual I-Bond Limit
Wrap-Up
8. Agency Bonds
The Universe Of Bonds
What Are Agency Bonds
How Are Agency Bonds Taxed
Treasuries vs Agencies
Who Might Want To Consider Agencies
Yield-To-Call & Yield-To-Worst
Where Can You Buy Agency Bonds
Wrap-Up
9. Municipal Bonds
Our Bond Universe Gets More Complex
What Are Municipal Bonds
How Safe Are Munis
How Are Munis Taxed
The De Minimis Rule
Social Security & Medicare Premiums
Treasuries, Agencies & Munis
Who Might Want To Consider Munis
Wrap-Up
10. Corporate Bonds
Our Bond Universe Is Complete
What Are Corporate Bonds
How Safe Are Corporates
Corporate Bond Hierarchies
Five Key Features Of Corporate Bonds
How Are Corporates Taxed
Treasuries vs Corporates, Etc.
Who Might Want To Buy Corporates
Wrap-Up
>>>>>>>>>>
Here is the overview for Bond Masters:
1. Stocks vs Bonds
Historical Performance
Are Bonds Really Less Volatile
Why Invest In Bonds
Accumulation vs Decumulation
Allocation of Stocks vs Bonds
Wrap-Up
2. Which Bonds Might Be Right For You
Treasuries & Other Types of Bonds
Nominal vs Real Yields
Inflation vs Non-Inflation-Protected
Taxable vs Tax-Advantaged Accounts
Wrap-Up
3. Bond Ladders & Other Bond Strategies
Normal vs Inverted Yield Curve
What Is A Bond Ladder
5 Important Bond Laddering Questions
Laddering When Rates Are Rising
Laddering When Rates Are Falling
Laddering When Rates Are Uncertain
What Is A Bullet
What Is A Barbell
Wrap-Up
4. Holding to Maturity vs Selling Early
Why Hold to Maturity
When To Sell Early Before Maturity
Tax Implications Of Selling Early
Wrap-Up
5. Individual Bonds, Bond Funds, Etc.
Why Buy Individual Bonds
Why Buy Bond Funds
Bond Fund Considerations
Key Bond Fund Concepts
CDs vs Treasuries
Other High-Yield Investments
Wrap-Up
6. Our B.E.S.T. Model Portfolios By Age
Our B.E.S.T Model Portfolios By Age
Model Portfolios In The Industry
B.E.S.T Model Portfolio Difference
How Much Do You Need To Retire?
How I Use The Rules of 100, 110, & 120
B.E.S.T Model Portfolios (20s)
B.E.S.T Model Portfolios (30s & 40s)
B.E.S.T Model Portfolios (50s & 60s)
B.E.S.T Model Portfolios (70s+)
Wrap-Up
7. The Decumulation Phase
What Is The Decumulation Phase?
Bear Markets & Recessions
What Can You Do In Bad/Bear Markets
Decumulation Tax Considerations
The 4% Rule
The Bucket Strategy
The Flooring Approach
Jen’s Bucket Strategy With A Twist
Wrap-Up
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SOURCES FOR TODAY'S VIDEO:
www.treasurydirect.gov/savings-bonds/i-bonds/
home.treasury.gov/policy-issues/financing-the-government/interest-rate-statistics
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Thanks for visiting our personal finance channel! We hope this content will help fast-track your financial journey! Everyone's financial journey is different. Please note that: 1) there are questions/ comments which I will not be able to answer without fully understanding your financial, personal & other circumstances & 2) we will not ask you to call us or send us money in the comments on this channel or any of our other social media accounts, so if you see comment(s) along those lines, it is most likely spam - PLEASE DO NOT ENGAGE WITH SPAMMERS OR GIVE OUT YOUR PERSONAL INFORMATION FOR YOUR OWN SAFETY.
I redeemed our 2022 0% fixed rate I-Bonds in November 2023 and bought a couple of I-Bonds with the 5.27% combined rate. After buying 10-year and 5-year TIPS earlier this year, I hadn't planned to buy any new I-Bonds, but decided to pick up a couple more in late April while I could still get the 5.27% rate. I agree with you that if I could buy more this year, I would be waiting until October to see how things play out. If rates are especially good at year end, I will look at buying more in early 2025.
Cashed out all my ibonds with 0% fixed rate, earlier this year, and put into my brokerage cash, currently yielding 5.2%. If we see changes in interest rates later this year, I may reconsider, but at this point, brokerage pays better.
Which brokerage? Is there mutual fund fee?🙏
The problem is that brokerage “cash” account interest earned is not state and city tax exempt(tax avg. 2-4%). So, you would be earning more interest with the I bonds/T bills especially if you live in a high tax state.
@@daw7773 Can easily buy 3 month T-Bills (thru brokerage). Currently 5.38% and no state tax.
If you buy USFR or another similar floating rate ETF, you get the benefits of state tax exempt returns and a ~5.2% interest rate net of fund fees. I believe the 7-day SEC yield right now is about 5.5%
@@zoltan7064Do you know if BIL etf is state tax free? I hold a fair amount and have struggled to find that information.
You nailed the fixed rate! Congrats! That's HUGE in my book!
Excellent food for thought, thank you!
My wife and I just bought I bonds yesterday so I’m happy what you mentioned in this video. I look at our I bonds ( we have several years worth ) as our emergency fund! We are both retired and you never know when you might need some emergency money.
Maxed in late April. Bought 5 year TIPS as well
I purchased maximum amount in April, plus modest amount in gift box for hubby. If rates go higher this year, will put more in gift box. Meanwhile I’m dumping ones with 0.4 fixed rate when it seems I will lose the least interest. In the future, will not buy any that don’t have at least 1% fixed rate.
if the Treasury changes their fixed rate formula after all this time, I think we can place the credit for that entirely to this channel
Maxed out for 2024. I was going to gift more IBonds before May but I didn't pull the trigger. Maybe T Bills instead. Thanks Jennifer.
Cashed out 40k.Putting it into a 17 week next week.5.4ish works for me
We're parking some of our I-Bond redemption proceeds in T-Bills for now as well (at least until I figure out what's next)
@@DiamondNestEgg We have a healthy sum we parked in a HYSA that is set at 5.25 for one year. That year is up in September so we have to migrate our money elsewhere. I set up an account with Treasury and doing one as well with Fidelity after watching your videos. Not sure I want to park all our money in Treasury bills even tho I know they are virtually risk free, I have to figure something out tho. Going from making almost zero to a thousand bucks a month in interest in an HYSA has spoiled me. I never want to go back
Great call ty loaded up... interesting data pt. 5/09-10/09 fixed rate wiped by SIR these rates really move around. good to lock in a Hi fixed rate.
Just finished maxing out for 2024. Rolled over some low interest I-bonds.
Already maxed out.
Glad I bought 7 in April.
Can you talk about Agency Bonds?
Will you be making a video giving your estimate for the future fixed rate before it comes out?
As always valuable information Jennifer! Will think about gifting the end of October and you confirmed what I was thinking. Will keep getting that 5.4% and reevaluate end of October. Looking at the upcoming 3 year T note and wondering if it will be a good time to buy. I need to watch the video on bond masters how to buy on the secondary market to get comfortable with that. I bought the 2 year note at auction and then it went up on the secondary. Still a good buy I believe. Have a fabulous weekend!
Spouse and I have maxed out our annual I-Bond purchases. How does this gift box thing work?
I have a large s um of I bonds. Is there any way to sell them without paying federal tax on them?????
I Bonds at 7+ and 9+ were cool. Now I see no reason for them although I know a lot of people disagree
I agree. You can get 5%+ in a HYSA without your money being tied up.
If the next report shows a even a slight uptick in inflation I believe everything will change
@@elbry4 But are you really getting 5% after taxes? I am in a high tax state.
@NameWithheld-nm1es You only pay taxes on the total interest once you file your federal income taxes that year. It's still better than an i-bond right now. I just redeemed to put it in my HYSA. CD's are even earning more than an i-bond right now
Where can I learn more about this gifting strategy? I noticed this mention a few times and I have no clue what is the advantage. We have been maxing out for the last three years.
Hello from Omaha! 🥳
I'm keeping calm and "I-Bonding" onward to my inflation protected savings goal. In parallel to this, I am also continuing with T-Bill ladder. The ladder is a point where one 52 Wk T-Bill is maturing every month. I manually roll that T-Bill, plus a little extra, to another 52 Wk T-Bill. I can capture the higher fixed rate in one hand and the higher T-Bill rate in the other. 👏
Are you there for the Berkshire Hathaway meeting? If yes, enjoy - look forward to hearing about it!
@@DiamondNestEgg Hi Jennifer! Yes, I am here for the Annual Meeting! It has been a blast meeting fellow shareholders and making new friends. ❤
Berkshire Hathaway reported $189 Billion in cash holdings. Can anyone guess how that cash is being held?
Hint - it's something that would make Janet Yellen happy. 😏
Answer - US Treasury securities! 💰
Specifically, I think Berkshire is buying 4 Wk T-Bills. You will need to verify that specific aspect.
So, if it's good for Warren then it's good for me. 👍 Maybe you could mention that in one of your videos.
I cashed out $24k in 0% fixed rate in November 2023 and cashed out another $25k in 0% fixed rate in 2024 to spread the tax hit over 2 years. Immediately reinvested the 2023 redemption at the 1.3% fixed rate. I will reinvest the 2024 redemption in October or November of 2024 to minimize the amount locked up within the 12 month redemption prohibition. Meanwhile it is in 13 week t-bills. I-bonds with 1.3% fixed rate are a good insurance policy against unexpected inflation when they can pay much more than t-bills.
First time viewer. Very impressed with your knowledge, predictions and presentation. When will you be predicting the November 2024 I - Bond rate ? We have yet to buy our 2024 I-Bonds .
At some point - it's too early right now. We need a few more months of data.
I sold 10k of 0% bonds in December 2023. January max out 10k in bonds and the $1,000 interest got CD. I'll probably cash out another 10k in 0% interest in October and purchase 1.3% fixed rate for my business. Depending upon the new fixed rate max out bonds with new funds in January 2025. My I bonds isn't for investment strategy but a backup emergency funds to my emergency savings account. My worries are paying income taxes on 10k once I decide to put my personal funds in my business account. Otherwise I'll keep the 0% bonds and purchase new ones.
Using ETF USFR for now.
any guessimations for the fixed rate in Nov?
Too far away to predict
Buy based on fixed rate. Too bad I'm maxed out
Which video do you recommend to explain how I Bonds are inflation protected if: I purchased them in November 2021, I am now getting 2.96%, but inflation numbers in March were 3.5%? I am having difficulty understanding how it is "inflation protected" if I am getting less interest than the current inflation rate. - Thank you.
You probably have a 0% fixed rate. I would sell and convert to the current 1.3% fixed rate. Currently 4.28%
@@PCZ730I do intend to update by exchanging for the higher fixed rate, but that still leaves the question in my mind...This implies that I Bonds are not able to keep up with inflation. One would have to keep selling and rebuying every time there is a change. My question is: how are I Bonds protecting you from inflation if they are giving you less than the current inflation rate?
It is also good to buy EE bonds (currently at 2.7%) to balance out I-Bonds for when inflation rates are super low?
You can buy up to $10k in EE bonds and $10k in I bonds in the same calendar year.
@@monarene44 thank you! Do you think it's good to buy both?
@@TheRebeccaLivermore I’m considering it for the future depending on how these rates go.
Noooo, EE Bonds are not worth it. I don't even understand why they exist.
@@poolmilethirty2859 thanks for sharing your thoughts on this. :)
Why would people prefer I Bonds, TIPS over Treasuries, 5, 10, 20+ Treasuries?
@@EndoExcision Inflation did rise over the past 3 months. But, for me, I have some since not being taxed until I sell it has some merit. A coworker said he uses it as future emergency (rainy weather) funds.
@@EndoExcision and inflation has gone up in the last 3 months. (but I don't expect that to continue) well, I hope not
One thing is that you don't pay taxes on it until you cash it out.
@@_-Karl-_Good point but T notes interest rates in 2023 and 2024 are at historical high rates.
@@_-Karl-_ I was not referring to “historical” interest rates …I was talking about “locking in” higher interest rates. Either short such as 4week treasury bills or long term(e.g. I bond) by purchasing them now without state/city tax on interest earned.By the way, the FED may not lower interest rates til December.
Like #500!