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this post was submitted on 11 Nov 2023
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Personal Finance
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Max out your yearly maximum of $10,000 in Series I savings bonds, purchased from the US Treasury.
Or, like others are probably saying, create your own retirement portfolio that allows you to defer income tax payments until you retire.
They're only paying like 3.6% right now. I've been earning more interest in a high yield savings account lately and it doesn't have all the withdrawal penalties.
The current rate is 5.27% Yeah if you withdraw before 5 years you lose the last three months of interest.
https://www.treasurydirect.gov/savings-bonds/i-bonds/i-bonds-interest-rates/
Mine likely have not updated to the new rate yet. I was just on the Treasury Direct site and am still receiving 3.6%.
Recently purchased bonds are paying 5.27 Older ones pay more like 4. https://www.treasurydirect.gov/files/savings-bonds/i-bond-rate-chart.pdf
They're structured to pay barely more than inflation - 0.0-0.5% more through most of this century - which means that even the 5.27% rate on todays bonds will fall when inflation goes back to its 2% target. They're about the safest investment you can make, but you're not going to increase your purchasing power.
The rates will update every 6 months on both ends, but depending on when you buy, your new 6-month rate may lag behind by 1-5 months after they've changed it on their end.