This Government Bond is Earning 7.12% Annually Right Now! | I Bonds Explained
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Most bonds right now are losing money...
Either from interest rate risk, losing money after you pay advisor fees, and in most cases... losing after you factor in inflation!
It's difficult for fixed-income investors to make money in this low-interest-rate environment. The math just doesn't work out when you're earning 2% and losing 4%+ after inflation and fees.
There is one bond right now that is earning far more than 2%, however. In fact, its earning 7.12% on an annualized basis.
It's called a Series I-Bond. These are treasury inflation protected securities.
What are treasury inflation protected securities?
They are backed by the full faith of the U.S. government and are securities designed to hedge against inflation.
I Bonds are very unique treasury securities because they have flexible durations. You only need to hold them for a year before accessing your money but they can be held as long as 30 years.
In this video, we discuss what exactly these Series I Bonds are and how they work. We discuss:
✅ The two interest rates that make up the yield you will actually earn on your I bond
✅ How to purchase I Bonds electronically through the Treasury Direct website vs. purchasing paper bonds. And how the rules change given each purchasing method
✅ The drawbacks and benefits of these inflation hedging bonds
✅ Where I Bonds can fit inside your retirement plan
#retirementinvesting #inflation #SafeguardWealthManagement
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