What about the price fluctuations in the price of ibonds? Suppose they return 7% but also fall that much in price? Is that a valid point to think about?
@@MakuLabs interest rate is locked in for 6 months at a time and changes based on CPI (consumer price index). The underlying value of I bond does not fluctuate. How much you buy is exactly you will get back plus interest (compound) when you sell.
It is insane how this is the first time I hear about these. I just maxed out for the year along with the wifey. We are saving for a downpayment on a future home within a 3-5 year period.
The only seller and buyer is the USA government. And they dont do advertising for this. Now...if it was stocks, real estate, cryptocurrencies....then scam artists have every reason to hire an army of publicists to get their propaganda out about how awesome Lehman brothers stock and enron is.
@@shawnd567 we are in a massive bubble. Bershire Hathaway has $150 billion parked into T bills earning close to zero. Why would Warren Buffett do that? Because you need cash to buy in a fire sale. Buy low, sell high. Not buy high, and psnic sell at the low.
My tax guy brought me to this matter, and I just signed up and bought one to test it out. Definitely more appealing than my "high interest savings account" which is not really high interest. Definitely appealing.
I invested in i-bonds back in the year 2000 when the interest rate was 7.2%. Now my money has more than doubled. The best time to buy i-bonds are May and November when the interest rates re-adjust. I have some i-bonds I bought back in 2002 that are earning 10% interest which were purchased in May and November of 2002.
@@benchoflemons398 Unless you invested in 2000 and then needed your money back out in 2009 because you lost your job or wanted to take advantage of low real estate. Remember this is a no risk/ super low risk investment. The stock market is a totally different animal. Obviously you are going to earn more with risker investments, but why buy in at the top when you can buy in at a lower price?
I think you missed a feature or two. Interest rates are assigned to an I Bond investment on a six month cycle based on the anniversary month of purchase. I bond rates are adjusted May 1 and November 1 each year. Bond interest rates are whatever they are at the time of purchase but continue for 6 months, at which time the updated rate is applied. (Anniversary dates are adjusted to the first of the purchase month.) Thus a Bond may earn less than the current rate if purchased after the first month of a cycle. Conversely, if the Bond rate goes down, the Bond will earn above current rate until the 6 month anniversary. Thus spreading purchases out could be beneficial by delaying affect of decreases.
I've got some money on the sidelines that I'm not comfortable putting into the market right now, so this sounds like a good option for the next year or two.
I Really appreciate the quality of the video as a whole 1.1B% 🤝 this was short and straight to the point and also made me feel more confident in investing. Having 5 kids and knowing this is golden 🏆 thank you so much and may God bless you and everyone else reading this beyond your imagination!
One warning. Be very careful to enter all information on the website accurately, or exactly as it appears on official government documents. There is a small, insignificant error on my wife's driver license. Our street name says Lane instead of Street. It's like we live on "Green St." and on her driver license it incorrectly says, "Green Lane". When she went to buy a bond she correctly put "Green St." Without explanation or a chance to fix it, she was unceremoniously locked out of her account, and it is a ROYAL pain to get it unlocked. You have to mail in a request with a guaranteed signiture from a broker! We live in a rural area, no broker in sight. Notary not good enough. Back and forth, back and forth for over a month! If your driver license is wrong, put what is says, right or wrong!!
Just bought these for the first time . Pretty simple process with lots of information on the site. You can’t exactly move your savings over because it is limited (as he says ) to 10k but I guess you could set these up as a ladder to keep liquid from being impacted by inflation.
Just bought these for the first time. And now looking to January to see what inflation is doing. Administration is putting in place a number of approaches to curb inflation. We’ll see how successful they are.
@@JayFairbrother Also very clunky. Their login process is horrible as you have to use a virtual keyboard to key in your password - which is not case sensitive! But those aren't deal breakers for a 7% return.
@@JayFairbrother What's the range of interest rate that the government can put on these bonds? I mean, the first 6 months sound pretty good with 7.12% but can they make it like 1% after 6 months?
@@dtsect I have holding IBonds for the last 20 years. The rate changes every six month. However, I know that the rate is always high than the 5 year CD available, maybe 1% higher.
@@dtsect The interest rate depends on the inflation rate, which is tied to the Consumer Price Index. Historically, for example, inflation ran over 13% in 1980, and dipped below zero briefly in 2009. If inflation reaches 13% again, I bonds will pay 13%. If inflation disappears entirely, then I bonds will earn zero percent. They will never earn less than zero, however--even in a deflationary environment. To answer your question, yes, it's possible the interest rate will be 1% next May (when the rates are reset)--but it's not likely. The range is anywhere from zero to whatever you think the upper limit for inflation might be.
Jay I love the knowledge you share with us! Because of you, I bought my ibonds for myself and my business a few days ago, and I invest in JEPI every month faithfully for myself and my business. I’m so grateful the algorithmic energy sent you my way! Thank you 😊
When my grandma died she left both my children $80,000 each in savings bonds and my brother's children $50,000 each and my granddaughter 25,000. My brother and I each got $150,000, so I'm all for savings bonds.
Great video Jay. I had the EE bonds through my job and had them for years until I needed additional funds, so cash them in and the interest was great. If I knew about the I bond the interest would of been off the chain. You live and learn. This was a great breakdown between the different bonds. Definitely keeping this video on my watch list 👍🏾
My wife had Series EE paper bonds. in 1992, her mother gave her 12 , $1K Savings Bonds (1992) which are maturing in 3 months. They were purchased at a Discount (50%) for $6K. The current value now after 30 years is $2035 each. Yes, Federal Taxable, but State tax free. In NY thats' about 11-12% Not bad for "forgotten" money , bonds sitting in a safe deposit box. To me, $10K (for each of you -hsuband & wife) at 7.12% interest for investment of low risk cash, is certainly better than .02% you get in a Money Market Account at any bank... even a 1 year CD at Apple Bank is a Whopping 0.90%. Apple Bank is a NY local bank paying the best CD rates I can find.
Thank you for this information! I didn't know wtf I was doing, so I did nothing at first... This is a great start- now I can start by putting some of my savings in this and then probably ease into a 2 or 3 fund portfolio.
This is really great information! I didn't know about these. I will definitely have to look into them when I decide to add more bonds to my portfolio. Thanks! 👍
Excellent information about an investment option that does not get enough attention. I may have missed it, but another variable with TIPS is that the value of the principal can fluctuate in value. Beautiful when it's going up, buy not so much when it's losing value.
Great vid! WSJ recently had an article echoing Jay’s presentation. I bonds aren’t for everyone but if you can afford it, you’ll be earning a higher return than what the banks/CU’s are offering.
Hi Jay, I bought 10K worth of I bonds about a month ago right after the 7.12 Rate adjustment. This is a great vid, thanks for explaining it in more detail that I had before.
Glad to see someone else with this same mindset. Me and my gf have been really big on saving the last few years, and i brought up to her a few months ago, that we should start putting her tax refunds into series I bonds since we put them straight into savings as it is. Inflation has already decreased the value of our savings by a few thousand dollars in just a few years. We have some money invested in bitcoin and stocks too, but only 5% of our net worth, which isnt near enough to outpace the inflation on the rest of our money.
Dump her or get married right away with a prenup. Can't be on the fence about this if you are serious about generating and keeping your wealth. There are no GF or buddies or "business partners" or even grandma in this game. Take your money and run from any GF's. As much as you think this will last. She will walk out on you the second she wishes. Period. No meeting. No warning. Done. And gone. Keys on the table and bills left unpaid. Listen to me son. No one else will give you this advice. Dump or prenup.
Utility ETF’s offer liquidity at 7%. They are much more stable than regular stocks and can pay dividends monthly. Liquidity is a very serious requirement in investing.
ETF's can also lose value if the underlying stocks perform poorly. There's no risk of losing your principal with I bonds. They're a savings instrument moreso than an investment option.
With how negative real interest rates are right now. These Series I bonds make a lot of sense. If not for negative real yields, either savings accounts or corp bonds would make more sense. Rates are just too low for where inflation is.
Only risk I see is that if severe hyper inflation occurs you get the average inflation rate over the prior six months. This means you get behind the inflation curve, that could be bad. That said I am still going to max out on these gems as I think hyper inflation in near term is low, and like the risk free aspect in this crazy financial world.
Great video. I wonder how much interest in average bonds historically gave. If it gave more than CD at any given time, investment in these bonds is no-brainer!
I did too , 2 sons in their 30s with families. Wife and I , both retired are going to do it asap. I suspect that the interest rate will INCREASE as Inflation is WORSE in the past 6 months. The Bonds interest rate is based on the previous 6 months Inflation rate. Only risk I see is in the potus, if he doesn't Sink us entirely. I'll reserve other references to the pathetic potus to other Forums.
I just bought 10k on Dec 30 and another 10k on Jan 3rd. So 20k in. Better than sitting in my ally for 0.5%. In my view it's liquid after 1 year so there is no downside compared to ally.
"Outpacing inflation" means that we trust that inflation is being measured accurately. I have a sneaking suspicion that a basket of goods is not reflective of the inflation rates we are seeing in housing, medicine, medical care, education.... If "true" inflation is higher than your 7.12%, which I think is fair to say is the case, you are really just stemming the bleeding. But I do hold I-bonds. I am just not about to put more than a modest percent of my savings into them. Where is a safer place? Well, that I don't know. Thanks for reminding us about these bonds. I am glad to know there can be a penalty too. I assume that is paid when you cash them out. Never did that yet. But it makes sense that the federal govt wants us to hold onto them a while.
Well, I mean...they've been measuring inflation that way for decades, it is what it is. And yeah, the penalty will be paid if/when you cash out the I bonds before the 5 year mark. Same as cashing out a CD early or something like that.
Even if the measurement of inflation is off from actual, the rate on the I Bond is DOUBLE the inflation rate so they would really have to grossly muff up the measurement to make I Bond less attractive.
Let's be real here. This balances out *maybe* a half to a third of the real inflation rate (as opposed to those cute little versions of CPI we're told to believe in)
Excellent explanation of this Buried "Treasure" from the Treasury Dept. As a Retired guy (and wife), looking for some additional income to supplement our retirement income with which seems like no risk (unless out current Administration goes Topsy Turvey). I'd like to see more of these advising videos. Looking for solid ETFs or Individual Stocks for good Dividends (AT&T, Exxon Mobil, etc.). THX again.
Thanks! I've got a number of videos on the channel regarding dividend etfs and stocks, check some of those out. Let me know if there's anything specific you want to see!
Hello, I have less than $10K in an old 401K; can I rollover it over to my Treasury Direct Series I Bond account? If not, what is your recommended methods to move the money from the 401k to my Treasury Direct Series I Bond account?
You can’t roll directly into an Ibond account that I’m aware of. If you don’t roll your 401k directly into a retirement account you’ll pay all sorts of taxes and penalties. You’d have to decide if it’s worth dealing with that to take the money and buy I bonds with it
So just to be clear, if I were to put 10k in now, that 10k would only earn the 9.62% for the next 6 months (or whenever that rate component changes) and then it would earn the new rate? So this is not “locking in” 9.62% on that 10k for the full 30 years.
Good video but if you look at Series I Bonds, historical rates are much lower than this 7.12% currently. So this is a "blip" in the scheme of things, so not sure this is a good 30-year investment--who knows what it will be after April 2022. While 7% is good right now, I wish you would have included some historical rates to give listeners a real perspective, not just focus on the "here and now." It would help listeners know/understand this rate is higher than normal, and what the average interest rates are over the last 10, 20 or 30 years...or more. Good info, just could have included more...thanks. Example: In May of 2009 and May of 2015, the 6-month return on I Bonds was 0.0%. So as you mentioned, it does fluctuate, but it was nowhere near 7%.
The main point is the rate is indexed to inflation, which is currently high. If you bought I bonds in May 2009, you’ll still earn this current high rate on them. If you bought other similarly safe/conservative investments you’d be getting crushed by inflation at the moment
Who knows what the rates will be in 10, 20, 30 years. So estimating historically, much does it pay for a 10K, I bond. held to maturity, 30 yrs ? Does compounding work the same with semi-annual payments acheiving huge gains at maturity ? And then. wouldn't there be huge income taxes on that one time payment ?
Jay, Thank you very much for this video. I have a small question, does our Treasury account balance get updated with the interest every month, or all the accumulated interest is deposited at the end of 6 months ?
Yes, the limits are per person, so a husband and wife can each buy $10k worth. And each 5k more though the tax return if filing separately. If you file jointly I THINK its 5k total, but I'm not totally sure about that
When you say "zero risk", that's default risk. I'd say there is still risk however. Risk that the REAL inflation rate is undercounted by govt, and that you're still behind, even at 9.62%
There is zero risk of losing the money you put into an ibond. Tell me something else where that's the case and you can get a better return vs whatever inflation rate you choose to believe in.
Warning! If you ever have to contact Treasury Direct they will not contact you by email and the hold time is usually 2-6 hours! We have been locked out of our account for months!
Buy I-Bonds TODAY at Yotta Bank jayfairbrother.me/Yotta
What about the price fluctuations in the price of ibonds? Suppose they return 7% but also fall that much in price? Is that a valid point to think about?
@@MakuLabs interest rate is locked in for 6 months at a time and changes based on CPI (consumer price index). The underlying value of I bond does not fluctuate. How much you buy is exactly you will get back plus interest (compound) when you sell.
@@freelyroaming thanks
do you know if can i buy these from Canada?
@@roseoverdose6451 Unfortunately you can't. Need to be a US Citizen or Resident
I Bonds are now up to 9.62 percent. I just bought $10,000 to save for my daughter's college education.
It is insane how this is the first time I hear about these. I just maxed out for the year along with the wifey. We are saving for a downpayment on a future home within a 3-5 year period.
The only seller and buyer is the USA government. And they dont do advertising for this.
Now...if it was stocks, real estate, cryptocurrencies....then scam artists have every reason to hire an army of publicists to get their propaganda out about how awesome Lehman brothers stock and enron is.
It's be way better to just buy a house and lock in a 3% loan.
@@shawnd567 we are in a massive bubble.
Bershire Hathaway has $150 billion parked into T bills earning close to zero.
Why would Warren Buffett do that? Because you need cash to buy in a fire sale.
Buy low, sell high.
Not buy high, and psnic sell at the low.
I think the only reason we know about em first time is the unique economic situ. I e. , The high inflation!
My tax guy brought me to this matter, and I just signed up and bought one to test it out. Definitely more appealing than my "high interest savings account" which is not really high interest. Definitely appealing.
I invested in i-bonds back in the year 2000 when the interest rate was 7.2%. Now my money has more than doubled. The best time to buy i-bonds are May and November when the interest rates re-adjust. I have some i-bonds I bought back in 2002 that are earning 10% interest which were purchased in May and November of 2002.
your "money" has doubled....so has REAL inflation
@@benchoflemons398 Unless you invested in 2000 and then needed your money back out in 2009 because you lost your job or wanted to take advantage of low real estate. Remember this is a no risk/ super low risk investment. The stock market is a totally different animal. Obviously you are going to earn more with risker investments, but why buy in at the top when you can buy in at a lower price?
I did too in year 2001, locked in 3% fixed rate for 30 years. My college real estate investment teacher told whole class, i listened
I think you missed a feature or two. Interest rates are assigned to an I Bond investment on a six month cycle based on the anniversary month of purchase. I bond rates are adjusted May 1 and November 1 each year. Bond interest rates are whatever they are at the time of purchase but continue for 6 months, at which time the updated rate is applied. (Anniversary dates are adjusted to the first of the purchase month.) Thus a Bond may earn less than the current rate if purchased after the first month of a cycle. Conversely, if the Bond rate goes down, the Bond will earn above current rate until the 6 month anniversary. Thus spreading purchases out could be beneficial by delaying affect of decreases.
He literally said that
I've got some money on the sidelines that I'm not comfortable putting into the market right now, so this sounds like a good option for the next year or two.
That was my situation and exactly why I put some money into I bonds 👍
This is an incredibly helpful video. It seems like IBonds are the best safe haven for funds in a high inflation environment.
Yup
I Really appreciate the quality of the video as a whole 1.1B% 🤝 this was short and straight to the point and also made me feel more confident in investing. Having 5 kids and knowing this is golden 🏆 thank you so much and may God bless you and everyone else reading this beyond your imagination!
One warning. Be very careful to enter all information on the website accurately, or exactly as it appears on official government documents. There is a small, insignificant error on my wife's driver license. Our street name says Lane instead of Street. It's like we live on "Green St." and on her driver license it incorrectly says, "Green Lane". When she went to buy a bond she correctly put "Green St." Without explanation or a chance to fix it, she was unceremoniously locked out of her account, and it is a ROYAL pain to get it unlocked. You have to mail in a request with a guaranteed signiture from a broker! We live in a rural area, no broker in sight. Notary not good enough. Back and forth, back and forth for over a month! If your driver license is wrong, put what is says, right or wrong!!
What if you update your license address? How will that work?
Exactly my thought. Update your DL
Just bought these for the first time . Pretty simple process with lots of information on the site. You can’t exactly move your savings over because it is limited (as he says ) to 10k but I guess you could set these up as a ladder to keep liquid from being impacted by inflation.
It's 10k per SSN. Just fyi.
@@Akira282 😂 what are you suggesting? 😂
@@Akira282 How many SS numbers do you have?
@@alansach8437 I assume he is talking about spouses.
I recently bought iBonds but I didn’t know about the tax break if used for college tuition. Great to know, thanks!
Just bought these for the first time. And now looking to January to see what inflation is doing. Administration is putting in place a number of approaches to curb inflation. We’ll see how successful they are.
Thanks for the video I saw on reddit that I bonds were giving 7% and it sounded too good to be true. Thanks for explaining what they're all about!
Yeah, totally legit! The treasury direct website to buy ibonds on looks a little sketchy, but what do you expect from a government website? 😂
@@JayFairbrother Also very clunky. Their login process is horrible as you have to use a virtual keyboard to key in your password - which is not case sensitive! But those aren't deal breakers for a 7% return.
@@JayFairbrother Does the interest on the 10k I invest stay 7.12% until 30yrs if I decide to hold till then?
@@tilakv No. It adjusts twice per year, basically on CPI.
Whats actually funny is I saw a few articles about this a few days ago and was considering putting some of my emergency fund in I-bond
Yeah I had too much earning .5% in savings so I’ll gladly take 7% on money I don’t want in the stock market right now
@@JayFairbrother What's the range of interest rate that the government can put on these bonds? I mean, the first 6 months sound pretty good with 7.12% but can they make it like 1% after 6 months?
@@dtsect I have holding IBonds for the last 20 years. The rate changes every six month. However, I know that the rate is always high than the 5 year CD available, maybe 1% higher.
@@dtsect The interest rate depends on the inflation rate, which is tied to the Consumer Price Index. Historically, for example, inflation ran over 13% in 1980, and dipped below zero briefly in 2009. If inflation reaches 13% again, I bonds will pay 13%. If inflation disappears entirely, then I bonds will earn zero percent. They will never earn less than zero, however--even in a deflationary environment. To answer your question, yes, it's possible the interest rate will be 1% next May (when the rates are reset)--but it's not likely. The range is anywhere from zero to whatever you think the upper limit for inflation might be.
Thanks for this video...I purchased a I-Bond instead of a renewing my CD!
Jay I love the knowledge you share with us! Because of you, I bought my ibonds for myself and my business a few days ago, and I invest in JEPI every month faithfully for myself and my business. I’m so grateful the algorithmic energy sent you my way! Thank you 😊
Saving for a down payment on a home. Investing in series i bonds to keep some of it protected against inflation.
When my grandma died she left both my children $80,000 each in savings bonds and my brother's children $50,000 each and my granddaughter 25,000. My brother and I each got $150,000, so I'm all for savings bonds.
Amazing! Hopefully I can do something similar for my grandkids someday
dam why did your children got more than your brother's children haha
@@notnoternextoit may be that her children were born before her brother’s?
Nice summary of I Bonds. Thanks 🙏
Thank you so much sir. Your explanation was very easy to understand for someone who has zero knowledge like myself.
I heard about the whole details but this video has explained everything you need to know with all information one need.
Glad it was helpful! Thanks for watching!
No brainer. Inflation is here to stay. Done at max. Wish I could buy more. You can bet I will on January 1st!
Great video Jay. I had the EE bonds through my job and had them for years until I needed additional funds, so cash them in and the interest was great. If I knew about the I bond the interest would of been off the chain. You live and learn. This was a great breakdown between the different bonds. Definitely keeping this video on my watch list 👍🏾
Thanks Ken! I bonds are a great tool, I wish I knew about them sooner as well!
@@JayFairbrother why is this the first time i hear about this?
My wife had Series EE paper bonds. in 1992, her mother gave her 12 , $1K Savings Bonds (1992) which are maturing in 3 months. They were purchased at a Discount (50%) for $6K. The current value now after 30 years is $2035 each. Yes, Federal Taxable, but State tax free. In NY thats' about 11-12% Not bad for "forgotten" money , bonds sitting in a safe deposit box. To me, $10K (for each of you -hsuband & wife) at 7.12% interest for investment of low risk cash, is certainly better than .02% you get in a Money Market Account at any bank... even a 1 year CD at Apple Bank is a Whopping 0.90%. Apple Bank is a NY local bank paying the best CD rates I can find.
At least you saved in the first place 👍🏽 there’s always a greater return somewhere else
Thank you for this information! I didn't know wtf I was doing, so I did nothing at first... This is a great start- now I can start by putting some of my savings in this and then probably ease into a 2 or 3 fund portfolio.
This is really great information! I didn't know about these. I will definitely have to look into them when I decide to add more bonds to my portfolio. Thanks! 👍
I like how you updated the title! Very good video.
Actually you can get i-Bonds from Yotta bank. No fee too.
You explained this very well
Clear and easy to understand is not always the case with these finance videos but you did a great job, thank you!
Thanks, I really appreciate that!
Very clear I agree
I made the down payment on my house with I bonds almost 20 years ago. They were making me about 10% back then.
Nice! Are you still using them as part of your savings?
Only ever heard of these never had one given to me. HR Block added it as a choice when filing taxes so I decided to look them up.
Did you end up putting any of your tax refund into them?
Woah this video was on-point and effective. Subscribed!!
Hmm... this is great information. You really are a fair brother!
Excellent information about an investment option that does not get enough attention. I may have missed it, but another variable with TIPS is that the value of the principal can fluctuate in value. Beautiful when it's going up, buy not so much when it's losing value.
I think I mentioned TIPS in there, or I may have edited that out, I can’t remember now 😅
@@JayFairbrother You did mention them. I don't think you mentioned that the principal is not fixed, like it is with an I Bond
Great vid! WSJ recently had an article echoing Jay’s presentation. I bonds aren’t for everyone but if you can afford it, you’ll be earning a higher return than what the banks/CU’s are offering.
Short and sweet but very detailed info. Thank you !! Didnt know anything abt iBonds earlier.
This was an excellent video. I’ve been wondering about ibonds and tips for a while and you cleared it all up. Thank you 👍
Thanks for the clear explanation
Happy to help!
Hi Jay,
I bought 10K worth of I bonds about a month ago right after the 7.12 Rate adjustment. This is a great vid, thanks for explaining it in more detail that I had before.
What's been your gain thus far?
Glad to see someone else with this same mindset. Me and my gf have been really big on saving the last few years, and i brought up to her a few months ago, that we should start putting her tax refunds into series I bonds since we put them straight into savings as it is. Inflation has already decreased the value of our savings by a few thousand dollars in just a few years. We have some money invested in bitcoin and stocks too, but only 5% of our net worth, which isnt near enough to outpace the inflation on the rest of our money.
Smart, I think if you already have a good savings I bonds are a no brainer for inflation protection without taking on much risk
Dump her or get married right away with a prenup. Can't be on the fence about this if you are serious about generating and keeping your wealth. There are no GF or buddies or "business partners" or even grandma in this game. Take your money and run from any GF's. As much as you think this will last. She will walk out on you the second she wishes. Period. No meeting. No warning. Done. And gone. Keys on the table and bills left unpaid. Listen to me son. No one else will give you this advice. Dump or prenup.
@@Chikalirudolph yikes buddy. Find a different video to dump this stuff. Clearly you have issues.
Our money, and not married. Yikes
Utility ETF’s offer liquidity at 7%. They are much more stable than regular stocks and can pay dividends monthly.
Liquidity is a very serious requirement in investing.
ETF's can also lose value if the underlying stocks perform poorly. There's no risk of losing your principal with I bonds. They're a savings instrument moreso than an investment option.
The foreshadowing is strong here
As a guy from the future, the Treasury is in trouble. "There's essentially zero risk". -Jay Fairbrother c. 2022 😅
Great explanation of I bonds.
Thanks. Never heard of this. Pretty excited.
With how negative real interest rates are right now. These Series I bonds make a lot of sense. If not for negative real yields, either savings accounts or corp bonds would make more sense. Rates are just too low for where inflation is.
excellent video! Extremely imformative! I'm going to put $1000 in an I-Bond this week
Only risk I see is that if severe hyper inflation occurs you get the average inflation rate over the prior six months. This means you get behind the inflation curve, that could be bad. That said I am still going to max out on these gems as I think hyper inflation in near term is low, and like the risk free aspect in this crazy financial world.
Good point
Thanks for the video, how could I never heard about them before?!
This is very helpful! Thank you for sharing
Great explanation! Thanks!
Glad you enjoyed it!
Great video. I wonder how much interest in average bonds historically gave. If it gave more than CD at any given time, investment in these bonds is no-brainer!
It is better than CD for sure. CD does not include inflation rate
You can also buy up to 10k under your living trust
great info....why isn't everybody doing this? having savings for some is tough...but come on...7% return...no risk? Awesome
Some people don't want to wait out the lock up period. A lot of people hear the word "bond" and get instantly turned off to the idea
Can’t buy them through brokerage and can only invest 10k most of the time - huge downsides in my mind
Great video! thank you for all the information it was clear and to the point. Helped me understand and buy my first I-Bond!
Thanks. Great video.
Excellent information I would post the government site too.
That’s not really keeping up with inflation when the Gov underreports real inflation…
I invest weekly from my bank account intending to ladder 1000 a year from it after 5 years of investing
Yes. Very informative. I am definitely going to put some money into this. Thank you!!
Very nicely explained.
so if I buy 10k I bond at 9.62 % then cash out after 12 months, how much penalty would i receive ?
The last 3 months of interest that you earned
Can you buy these bonds and compound to pay off student loans tax free whilst keeping up with inflation?
Thank you ☺️. I learned a lot 😊
I shared this with my kids. Thanks for the easy to understand video.
I did too , 2 sons in their 30s with families. Wife and I , both retired are going to do it asap. I suspect that the interest rate will INCREASE as Inflation is WORSE in the past 6 months. The Bonds interest rate is based on the previous 6 months Inflation rate. Only risk I see is in the potus, if he doesn't Sink us entirely. I'll reserve other references to the pathetic potus to other Forums.
Great videos. Seems like nows the time to buy some I bonds
Especially now that it looks like the interest rate will be going even higher than 7.12% starting in May!
This guy is an Adam Sandler look alike. I'm going to invest in I bonds and hold for 5 years.
Excellent information. Thanks.
Wow! This is good info... thanks 😊
I just bought 10k on Dec 30 and another 10k on Jan 3rd. So 20k in. Better than sitting in my ally for 0.5%. In my view it's liquid after 1 year so there is no downside compared to ally.
"Outpacing inflation" means that we trust that inflation is being measured accurately. I have a sneaking suspicion that a basket of goods is not reflective of the inflation rates we are seeing in housing, medicine, medical care, education.... If "true" inflation is higher than your 7.12%, which I think is fair to say is the case, you are really just stemming the bleeding. But I do hold I-bonds. I am just not about to put more than a modest percent of my savings into them. Where is a safer place? Well, that I don't know. Thanks for reminding us about these bonds. I am glad to know there can be a penalty too. I assume that is paid when you cash them out. Never did that yet. But it makes sense that the federal govt wants us to hold onto them a while.
Well, I mean...they've been measuring inflation that way for decades, it is what it is. And yeah, the penalty will be paid if/when you cash out the I bonds before the 5 year mark. Same as cashing out a CD early or something like that.
Even if the measurement of inflation is off from actual, the rate on the I Bond is DOUBLE the inflation rate so they would really have to grossly muff up the measurement to make I Bond less attractive.
Can you get I Bonds as a business owner using your EIN?
Nice video man
Appreciate it! Thanks for watching
Let's be real here. This balances out *maybe* a half to a third of the real inflation rate (as opposed to those cute little versions of CPI we're told to believe in)
Not that many people know about ibonds. However, that 7.12% rate is just the inflation rate.
I wished i know about i-bond in 2021..
How often is the interest compounded and added to your iBond? Monthly? At the 6 month interest reset mark?
I have to say it, dude almost looks like Adam Sandler
Adam Sandler looks like me.
Great video. Thank you!
Excellent explanation of this Buried "Treasure" from the Treasury Dept. As a Retired guy (and wife), looking for some additional income to supplement our retirement income with which seems like no risk (unless out current Administration goes Topsy Turvey). I'd like to see more of these advising videos. Looking for solid ETFs or Individual Stocks for good Dividends (AT&T, Exxon Mobil, etc.). THX again.
Thanks! I've got a number of videos on the channel regarding dividend etfs and stocks, check some of those out. Let me know if there's anything specific you want to see!
I have been telling my family and friends about this 7.12% I bonds. So far only one family member plus myself have taken advantage.
This was definitely a quality video with everything explained well. Thank you for posting!
Hello, I have less than $10K in an old 401K; can I rollover it over to my Treasury Direct Series I Bond account?
If not, what is your recommended methods to move the money from the 401k to my Treasury Direct Series I Bond account?
You can’t roll directly into an Ibond account that I’m aware of. If you don’t roll your 401k directly into a retirement account you’ll pay all sorts of taxes and penalties. You’d have to decide if it’s worth dealing with that to take the money and buy I bonds with it
so each transaction count as a bond? if i buy 50$ now and then 100$ i have 2 bonds?
These sound super interesting Jay, never heard of these before
Thanks! Just opened an account
Seems like a no brainer right now at 7.12%
Great video!
Thanks!
So just to be clear, if I were to put 10k in now, that 10k would only earn the 9.62% for the next 6 months (or whenever that rate component changes) and then it would earn the new rate? So this is not “locking in” 9.62% on that 10k for the full 30 years.
please what's the name of the microphone you're using.. it sounds good... I want one
All the equipment I used in this video is here: www.amazon.com/shop/jayfairbrother/list/3K8QUQNAIPCK9
Good video but if you look at Series I Bonds, historical rates are much lower than this 7.12% currently. So this is a "blip" in the scheme of things, so not sure this is a good 30-year investment--who knows what it will be after April 2022. While 7% is good right now, I wish you would have included some historical rates to give listeners a real perspective, not just focus on the "here and now." It would help listeners know/understand this rate is higher than normal, and what the average interest rates are over the last 10, 20 or 30 years...or more. Good info, just could have included more...thanks.
Example: In May of 2009 and May of 2015, the 6-month return on I Bonds was 0.0%. So as you mentioned, it does fluctuate, but it was nowhere near 7%.
The main point is the rate is indexed to inflation, which is currently high. If you bought I bonds in May 2009, you’ll still earn this current high rate on them. If you bought other similarly safe/conservative investments you’d be getting crushed by inflation at the moment
EE bonds are a great deflationary edge
Very true. That guarantee of doubling your money can make them the much better bond in a period of deflation
Who knows what the rates will be in 10, 20, 30 years. So estimating historically, much does it pay for a 10K, I bond. held to maturity, 30 yrs ? Does compounding work the same with semi-annual payments acheiving huge gains at maturity ? And then. wouldn't there be huge income taxes on that one time payment ?
Thanks, good job.
Jay, Thank you very much for this video. I have a small question, does our Treasury account balance get updated with the interest every month, or all the accumulated interest is deposited at the end of 6 months ?
At the end of 6 months it will show up
Do you have to be living and working in the USA to buy them ?
idk@@dkmyww
So, if you are family.. husband can buy 10k, wife can buy 10k and 5k for tax refund(if any).. rite?
Yes, the limits are per person, so a husband and wife can each buy $10k worth. And each 5k more though the tax return if filing separately. If you file jointly I THINK its 5k total, but I'm not totally sure about that
When you say "zero risk", that's default risk. I'd say there is still risk however. Risk that the REAL inflation rate is undercounted by govt, and that you're still behind, even at 9.62%
There is zero risk of losing the money you put into an ibond.
Tell me something else where that's the case and you can get a better return vs whatever inflation rate you choose to believe in.
Warning! If you ever have to contact Treasury Direct they will not contact you by email and the hold time is usually 2-6 hours! We have been locked out of our account for months!
Ugh I’m locked out now
@@Sunbeam298 I am so sorry. I can only say that when I did get to talk to someone they were very friendly.
My wait time was 45 minutes and I was able to get in immediately after the call.
@@ixrayu39 That's good. Looks like there is some improvement.
The trick to login often and keep your security answers at a safe place. They take hours to reach.