34 responses

  1. cashflowmantra
    November 10, 2011

    Great information. I learned something new today and appreciate it a lot. Thanks.

    • moneycone
      November 11, 2011

      There is money to be made even in the most boring of investments CFM! Glad you like the post.

  2. Ashley @ Money Talks
    November 10, 2011

    Great post. I need to learn more about bonds… you kinda have me sold. I know I’m supposed to leave my e-fund in savings but with such itty bitty returns I’ve been thinking of moving it. Even if we had to get some money out I’d be willing to lose the 3 months of interest. It would be for an emergency, I’m not going to cry about a little interest.

    • moneycone
      November 11, 2011

      The current IBond rates are not that great, but compared to the paltry interest CDs offer, they look pretty good!

  3. Christa
    November 10, 2011

    I love savings bonds. I never got them as gifts growing up, but my husband did, and having them to cash in when we ran into money problems in our early marriage was a godsend. Plus, you’re very right that the interest is looking pretty good right now!

    • moneycone
      November 11, 2011

      Yes Christa, IBonds serve as wonderful gifts!

  4. Hunter – Financially Consumed
    November 10, 2011

    I have to agree, and like your presentation by the way. Bonds definitely have their place in a balanced portfolio.

    • moneycone
      November 11, 2011

      True Hunter. I wouldn’t advice anyone to move all their money to IBonds, but IBonds are better than CDs right now. Plus they are free from state and local taxes.

  5. Roshawn @ Watson Inc
    November 10, 2011

    I received savings bonds as a gift as a child. They were great when I cashed them out 15 years late. I still have some left. Thanks for reminding me of this savings tool ;)

    • moneycone
      November 11, 2011

      That is a very thoughtful gift indeed Roshawn! The gift that keeps on giving (till you cash it out!).

  6. krantcents
    November 10, 2011

    TIPS as a mutual fund are yielding close to 10% YTD.

    • moneycone
      November 11, 2011

      With TIPS you run the risk of reducing your capital. With IBonds and CDs, you don’t.

  7. DIY Investor
    November 10, 2011

    Nice overview of an often over looked investment product.

    • moneycone
      November 11, 2011

      Thanks DIY!

  8. Darwin’s Money
    November 10, 2011

    I love that Ally advertises their 1% rate as “HIGH YIELD”. That’s hilarious. You’re offering an income investment that is losing money to inflation. And that is considered High Yield. I guess you can call anything high yield.

    • moneycone
      November 11, 2011

      Comapre Ally’s rate to :

      WellsFargo: 0.05%
      Chase : 0.25%
      BofA: 0.35%

      That’s 3 times BofA’s rate and 20 times Wells Fargo’s.

      It’s all relative Darwin.

      You make a good argument about losing money due to inflation. That’s why this post is about why you should invest in IBonds, that *keeps* up with inflation and not CDs! ;)

  9. Untemplater
    November 11, 2011

    Informative post Money Cone! That 3.06% sure looks good! I’m guilty of putting a lot of my savings into CDs. Rates are so low that I haven’t even bothered this year yet but I’ll have to consider I-bonds now as a good alternative. -Sydney

    • moneycone
      November 11, 2011

      As I mentioned, if one had invested money only in IBonds during the lost decade, he/she would’ve gotten a pretty decent return.

      Not saying you should, but something to think about.

  10. Eric
    November 11, 2011

    I often think about EE bonds but I bonds never really come up. You make a really good point here. And now that Treasury Direct is going to be easier to use, it could be a great option.

    • moneycone
      November 12, 2011

      They’ve made owning an IBond real easy! There are no commissions or fees either. I wish more folks would make use of this.

      I want to get a paper IBond as a souvenir, since this is the last chance I have to get Paper bonds!

  11. retirebyforty
    November 11, 2011

    I have about 8% of my portfolio in bonds, but I never purchased them myself. The company match and Mrs. RB40′s retirement plan has bonds in them.
    I’ll keep this in mind before I buy any CD though.

    • moneycone
      November 12, 2011

      Very glad to hear that RB40! Obviously, you’ve thought through your asset allocation well.

  12. BeatingTheIndex
    November 12, 2011

    Interesting post MC, I have about 40% of my retirement savings in a short term bonds ETF which pays a similar 3%.

  13. 101 Centavos
    November 12, 2011

    Good post, MC. I suppose this would be a good cash alternative in a Roth IRA.

  14. Kris @ Everyday Tips
    November 12, 2011

    MoneyCone, thank you so much for this post. I have been trying to think of a way to allocate some cash, and IBonds might just be the vehicle I am looking for.

    Great post!!

  15. KenFaulkenberry
    November 12, 2011

    I-Bonds are a great place for savings (as opposed to investing). I have been purchasing I-Bonds for over 10 years but did not know you could request your tax refund as an I-Bond.
    Thanks for the useful information!

  16. The Biz of Life
    November 13, 2011

    Just keep in mind the interest rate resets twice a year for the duration of the I-bond. So the 3%+ rate is only good until January, at which time it could reset higher or lower. Your principal is not at risk but the interest rate will be variable over the life of the investment. The main risk, in my opinion, is that real inflation will be higher than gov’t reported inflation.

    • The Biz of Life
      November 13, 2011

      I meant to say the rates reset in May and November.

  17. Barbara Friedberg
    November 14, 2011

    Hi Money, I’ve been writing about I bonds and TIPS as well. There really the only place to get some safe yield today and keep up with inflation!

  18. Dave
    November 15, 2011

    Yeah, leaving cash in CDs doesn’t help you too much. I Bonds could be a good alternative for many people

  19. Maggie@SquarePennies
    November 15, 2011

    MC, this is great information and very timely. Thanks so much!

  20. Paula @ Afford Anything
    November 16, 2011

    I definitely learned something new today! I didn’t know any of that info about I-Bonds. It does sounds like a decent emergency fund option, as Ashley pointed out — if you have to withdraw for a real emergency, you’re not going to cry about losing 3 months interest.

  21. Buck Inspire
    November 20, 2011

    Love your point about not losing money and fighting off the inflation erosion! How do you find all these alternatives?

  22. Untemplater
    May 21, 2013

    I totally forgot about I-bonds so I’m glad I stumbled on this article again. I’m going to ask my advisor if he has any recommendations on I-bonds as I’m trying to invest some more money. Just doesn’t make sense to hold cash these days!

Leave a Reply

 

 

 

Back to top
mobile desktop