Are you looking for a low-risk investment that can help protect you against inflation? Series I Savings Bonds may be a good solution for you. In this article, we’ll look at what Series I Savings Bonds are, how they work, their benefits and drawbacks, and when it makes sense to buy them.
Series I Savings Bonds are debt securities issued by the U.S. Treasury. They are non-marketable, semi-annually compounded bonds. They are similar to Series EE Savings Bonds, but they have a fixed interest rate that is set at the time of issuance. This fixed rate is usually higher than the rate offered on Series EE Savings Bonds.
Unlike other investments, the interest rate on Series I Savings Bonds is adjusted every six months. It is determined by the inflation rate. So, when inflation increases, the interest rate on your bond will also increase. This makes Series I Savings Bonds a great way to protect your money against inflation.
The other major benefit of Series I Savings Bonds is that you may be eligible for tax breaks if you cash them in to pay for education expenses. This applies to both Series I and Series EE Savings Bonds. To qualify for the tax breaks, you must meet certain requirements.
When it comes time to cash in your Series I Savings Bond, you have several options. You can choose to have the proceeds deposited directly into your bank account, you can use the proceeds to purchase additional bonds, or you can use the proceeds to purchase other investments.
When it makes sense to buy extra paper Series I Bonds with your tax refund depends on your financial situation and goals. If you’re looking for an investment that helps you protect against inflation, Series I Savings Bonds may be a good solution. They also offer other benefits, such as tax breaks for education expenses, so it’s worth considering whether they are right for you.
Overall, Series I Savings Bonds are a great way to protect your money against inflation and earn a fixed interest rate. They offer tax breaks for those who qualify, and the proceeds can be used to purchase other investments. However, they are not a risk-free investment, and it’s important to understand the risk involved before investing.