So, current fixed rate is 0.9%. And current total rate is 4.03%. With oil going up, the Exxon CEO saying the current price for oil isn't fully priced into the market yet, and the effect high gas has on inflation, anything think inflation may rise soon? If so, getting in on an I bond with a fixed rate of 0.9% may be a good deal if inflation goes up.

A few years ago, when inflation was super high, I bonds had a 0% fixed rate, but an inflation rate of 9% or so. I suspect when inflation goes up the fixed rate goes down.

Anyone have any thoughts?

I'm glad you brought this up. I had bought them a few years ago when those rates were high.

To make sure I fully understand, if the fixed rate is 0.90% and you buy right now, and then the variable rate goes up to 7.5% in a year, but the fixed rate goes down to 0%, does mine essentially have a combined rate of 8.4% while those who choose to newly buy-in has a combined rate of 7.5%? (Hopefully what I typed makes sense, lol)

permabull said:

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I have never been a fan. Dealing with the Treasury direct web page and only being able to buy $10k a year means the juice isn't really worth the squeeze. Even even if you max out your spouse and two kids, you are looking at about $130 in interest per month. Doesnt really move the needle much for all the effort involved.

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This...you could find a 'safe' bond ETF, collect the distributions, sell calls against it...and have a better return with easier access and no penalties.

TreasuryDirect is something investors need to carefully consider before investing.

permabull said:

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I have never been a fan. Dealing with the Treasury direct web page and only being able to buy $10k a year means the juice isn't really worth the squeeze. Even even if you max out your spouse and two kids, you are looking at about $130 in interest per month. Doesnt really move the needle much for all the effort involved.

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YouBet beat me to it

Treasury direct USED to have the WORST site on the internet. (at one point you were forced to type in the password using a virtual keyboard - i hope whoever made that decision was fired, but they were probably promoted.)
it has gotten a little better.
Financially, t's better than leaving the money in a savings or emergency account. We had $30K that was sitting in a CD. This was a better option.

I was pleasantly surprised at how quickly they redeemed the bond (2 days) - this was about 2 weeks ago

I got some back when they were up to 9% and left it since then. Decent rates. But haven't bought more.

Hmmm...capital searching for alternative assets. I'd like to introduce you to silver; a metal that has a foot in two different worlds...monetary and industrial. It's a small market with several years worth of supply constraints, regulatory demons, a paper trading casino that doesn't give a hoot about physical supply deficits, and global industries with an insatiable appetite for the stuff. Why, it's almost like petroleum. When it's good, it's very good. And when it's bad, you can lose your damned shirt...just like you can in LNG.

What's not to love about holding a .999 fine coin in your hand, knowing it will always be worth something, rather than a piece of paper or worse a digital piece of paper that's thinner than the air your breath and just as hard to hold onto since there's counter-party risks...even if it is the government...and that probably makes it even more risky these days.

I kid...I kid. Y'all carry on.

A digital bond? What happens if the power goes out forever? Did you even consider that risk?? /f16 bitcoin critics

BucketofBalls99 said:

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I'm glad you brought this up. I had bought them a few years ago when those rates were high.

To make sure I fully understand, if the fixed rate is 0.90% and you buy right now, and then the variable rate goes up to 7.5% in a year, but the fixed rate goes down to 0%, does mine essentially have a combined rate of 8.4% while those who choose to newly buy-in has a combined rate of 7.5%? (Hopefully what I typed makes sense, lol)

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That is how I understand it. Fixed rate was as high as 1.4% a couple years ago. But of course inflation was pretty low at the time.

A $10k limit per investor when I did this a couple years ago. Not worth the effort in my view.

Why not SGOV or VMFXX and not have silly limitations?

Whoa Nellie said:

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A $10k limit per investor when I did this a couple years ago. Not worth the effort in my view.

Why not SGOV or VMFXX and not have silly limitations?

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Because back when I used it the returns were better than both these funds you posted. 9%.

I had $40k in it because it's per investor and if you have an LLC you can count that as an individual. Both my wife and I have LLCs so that's $10k x 4.

I wanted zero risk in losing my principal because it was part of my overall cash strategy yet I didn't need this part of my cash in the window that it had to stay invested to maximize it.

Your comment is short sighted without knowing someone's strategy, horizon, and overall portfolio allocation. There are many avenues of wealth building and this is just one of them that made total sense for some of us in the time period that rates were above historical norm.

YouBet said:

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Whoa Nellie said:

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A $10k limit per investor when I did this a couple years ago. Not worth the effort in my view.

Why not SGOV or VMFXX and not have silly limitations?

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Because back when I used it the returns were better than both these funds you posted. 9%.

I had $40k in it because it's per investor and if you have an LLC you can count that as an individual. Both my wife and I have LLCs so that's $10k x 4.

I wanted zero risk in losing my principal because it was part of my overall cash strategy yet I didn't need this part of my cash in the window that it had to stay invested to maximize it.

Your comment is short sighted without knowing someone's strategy, horizon, and overall portfolio allocation. There are many avenues of wealth building and this is just one of them that made total sense for some of us in the time period that rates were above historical norm.

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Just letting people know that you are limited to $10k per year in I Bonds. This severely limits their attractiveness in my view.

Whoa Nellie said:

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YouBet said:

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Whoa Nellie said:

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A $10k limit per investor when I did this a couple years ago. Not worth the effort in my view.

Why not SGOV or VMFXX and not have silly limitations?

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Because back when I used it the returns were better than both these funds you posted. 9%.

I had $40k in it because it's per investor and if you have an LLC you can count that as an individual. Both my wife and I have LLCs so that's $10k x 4.

I wanted zero risk in losing my principal because it was part of my overall cash strategy yet I didn't need this part of my cash in the window that it had to stay invested to maximize it.

Your comment is short sighted without knowing someone's strategy, horizon, and overall portfolio allocation. There are many avenues of wealth building and this is just one of them that made total sense for some of us in the time period that rates were above historical norm.

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Just letting people know that you are limited to $10k per year in I Bonds. This severely limits their attractiveness in my view.

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Valid but it is per person plus your business, if you have one. And I don't think it's worth messing with unless the rates are where they were back then.