Ever dream of being a Bond Girl? 💋 Who wouldn’t want to canoodle with James, do a backflip while twirling some nunchucks, and yacht off into a glamorous sunset? 💃🚤
Well, if that’s outside your reach, you could always be a…SAVINGS Bond Girl. With the way Series I bonds hedge inflation, you might really feel like you’re getting away with murder. 🙃
Here’s Five Fast Facts on Series I bonds:
- 🌟 Star Saver - Issued by Uncle Sam, Series I bonds are a type of savings bond where you loan money to the government and earn interest. They work kind of like a Treasury bill, but what sets them apart is their combo of both fixed and variable-rate interest.
- 🔒 The Fix is In - The fixed rate on a Series I bond gets locked in when you buy it and stays the same for the life of the bond. Fixed rates are set every six months on May 1st and November 1st. Right now, the fixed rate sits at 1.10%.
- 🤸 It Varies - The variable rate (or inflation rate) on Series I bonds is based on the Consumer Price Index for All Urban Consumers and varies throughout the bond’s lifetime. It’s also reset every six months on May 1st and November 1st. When inflation is high, the rate increases. When it’s low, it decreases. The composite rate (fancy name for both fixed and variable rates combined) hit a high of 9.62% in the May to October 2022 period.
- 💲 Talkin’ Taxes - Any interest you earn on Series I bonds is free from state and local taxes. However, you still have to pay federal taxes and estate, gift, or inheritance taxes depending on the situation. One way to skirt the federal income taxes is by spending the interest you collect on qualified higher education expenses.
- ⏳ Waiting Game - Like a certificate of deposit from the bank, you’ll have to hang onto your Series I bond for a while to get the max reward. Series I bonds mature at 30 years and the interest isn’t paid until you redeem it. If you need to cash out, you have to wait at least 12 months from purchase. You’ll also get slapped with three months’ worth of interest if you cash out within the first five years.
🔥Bottom line: Want to dive into more nerdy Series I details or want to buy some? Head to the government’s Treasury Direct website for all that and more. Need to beef up that emergency fund? Head to this article for five hacks to supercharge your savings.
Do you buy savings bonds?
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