7% Return?  From the U.S. Treasury?

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Yes, Virginia, Series I bonds sold from November 2021 through April 2022 earn interest at 7.12%. Oops.

These bonds earn interest for 30 years or until you decide to return them.  If you redeem them before five years, you’ll lose interest on the previous three months.  After five years, you can cash them in without penalty.  By the way, you cannot redeem these bonds before one year.

If you have excess cash just sitting someplace, these may make sense.

Oh, yeah, the bad news:  there is a limit per taxpayer of $10,000 worth of Series I bonds per year.

The income you earn is subject to federal income tax, but not subject to state or local taxes – how about that?

Possible good news?  There’s talk the administration could raise the annual cap for Series I bonds fro $10,000 to $100,000 – we’ll follow this.

Where can you buy these?   Alas, not even yours truly, with all my magical powers, can provide these.  You must buy these directly from the treasury using the TreasuryDirect website.

Enjoy!

Jim

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Jim Lorenzen, CFP®, AIF®

Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® in his 21st year of private practice as Founding Principal of The Independent Financial Group, a fee-based registered investment advisor with clients located in New York, Florida, and California. He is also licensed for insurance as an independent agent under California license 0C00742.  IFG helps specializes in crafting wealth design strategies around life goals by using a proven planning process coupled with a cost-conscious objective and non-conflicted risk management philosophy.

Opinions expressed are those of the author.  The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.

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Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® in his 21st year of private practice as Founding Principal of The Independent Financial Group, a fee-based registered investment advisor with clients located in New York, Florida, and California. He is also licensed for insurance as an independent agent under California license 0C00742.

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