I Bonds Explained - EVERYTHING You Need To Know About I Bonds
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- Опубліковано 17 чер 2024
- Explaining everything you need to know about I-Bonds! Tired of inflation eating away at your cash savings? I Bonds may be the answer to high yield savings accounts that are anything but high-yield.
I bonds have a variable interest rate that changes to beat inflation so your emergency fund cash doesn't lose its value while you hold it!
*Interest Rates Mentioned In this video were accurate at time of recording*
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Buy I-Bonds direct from the government: treasurydirect.gov
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0:00 - Intro
0:58 - What are I Bonds?
2:12 - Are I-Bonds Safe?
3:17 - Negatives to I Bonds
4:03 - How are I-Bonds Taxed?
4:52 - Where to Buy I Bonds
5:16 - How Much Can I Invest into I-Bonds?
6:34 - How Is The Interest Rate Determined on I Bonds?
7:55 - I Bonds vs Series EE Savings Bonds
8:44 - I Bonds vs TIPS (Treasury Inflation Protected Securities)
9:46 - Best Uses for I-Bonds
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#ibonds #emergencyfund #savingsbonds
A bit about my credentials...I have a B.S. degree in Finance, I've spent my entire career working in various corporate finance roles, and have been an active stock market investor for over 20 years. While all of this means I know what I'm talking about (most of the time!), it does not mean you should act solely on my word alone.
I am not intending to, nor licensed to give personalized financial advice. I'm merely trying to share my knowledge and experience so that you are able to make better financial and investment decisions for yourself based on your own research!
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DISCLAIMER: Jay Fairbrother, including but not limited to any guests appearing in his videos, are not financial/investment advisors, brokers, or dealers. They are solely sharing their personal experience and opinions; therefore, all strategies, tips, suggestions, and recommendations shared are solely for entertainment purposes. There are financial risks associated with investing, and Jay Fairbrother’s results are not typical; therefore, do not act or refrain from acting based on any information conveyed in this video, webpage, and/or external hyperlinks. For investment advice please seek the counsel of a financial/investment advisor(s); and conduct your own due diligence.
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• I Bonds Explained - EV...
Buy I-Bonds TODAY at Yotta Bank jayfairbrother.me/Yotta
What about the price fluctuations in the price of ibonds? Suppose they return 7% but also fall that much in price? Is that a valid point to think about?
@@MakuLabs interest rate is locked in for 6 months at a time and changes based on CPI (consumer price index). The underlying value of I bond does not fluctuate. How much you buy is exactly you will get back plus interest (compound) when you sell.
@@freelyroaming thanks
do you know if can i buy these from Canada?
@@roseoverdose6451 Unfortunately you can't. Need to be a US Citizen or Resident
I Bonds are now up to 9.62 percent. I just bought $10,000 to save for my daughter's college education.
Thanks! Need to look into this much more
This is really great information! I didn't know about these. I will definitely have to look into them when I decide to add more bonds to my portfolio. Thanks! 👍
Short and sweet but very detailed info. Thank you !! Didnt know anything abt iBonds earlier.
I recently bought iBonds but I didn’t know about the tax break if used for college tuition. Great to know, thanks!
Great video! thank you for all the information it was clear and to the point. Helped me understand and buy my first I-Bond!
Thank you so much sir. Your explanation was very easy to understand for someone who has zero knowledge like myself.
This was an excellent video. I’ve been wondering about ibonds and tips for a while and you cleared it all up. Thank you 👍
I heard about the whole details but this video has explained everything you need to know with all information one need.
Glad it was helpful! Thanks for watching!
Woah this video was on-point and effective. Subscribed!!
I have been telling my family and friends about this 7.12% I bonds. So far only one family member plus myself have taken advantage.
Hmm... this is great information. You really are a fair brother!
This is very helpful! Thank you for sharing
Thank you for this information! I didn't know wtf I was doing, so I did nothing at first... This is a great start- now I can start by putting some of my savings in this and then probably ease into a 2 or 3 fund portfolio.
Nice summary of I Bonds. Thanks 🙏
I like how you updated the title! Very good video.
Thanks, Jay! I'll be on the Treasury site in a few minutes.
Jay I love the knowledge you share with us! Because of you, I bought my ibonds for myself and my business a few days ago, and I invest in JEPI every month faithfully for myself and my business. I’m so grateful the algorithmic energy sent you my way! Thank you 😊
Yes. Very informative. I am definitely going to put some money into this. Thank you!!
Thanks for the video, how could I never heard about them before?!
You explained this very well
Excellent information. Thanks.
Thanks for this video...I purchased a I-Bond instead of a renewing my CD!
Great vid! WSJ recently had an article echoing Jay’s presentation. I bonds aren’t for everyone but if you can afford it, you’ll be earning a higher return than what the banks/CU’s are offering.
My tax guy brought me to this matter, and I just signed up and bought one to test it out. Definitely more appealing than my "high interest savings account" which is not really high interest. Definitely appealing.
Thank you ☺️. I learned a lot 😊
Thanks. Great video.
Thanks. Never heard of this. Pretty excited.
Great info! Thanks!
Thank you for this video 🙏🙏🙏
I shared this with my kids. Thanks for the easy to understand video.
I did too , 2 sons in their 30s with families. Wife and I , both retired are going to do it asap. I suspect that the interest rate will INCREASE as Inflation is WORSE in the past 6 months. The Bonds interest rate is based on the previous 6 months Inflation rate. Only risk I see is in the potus, if he doesn't Sink us entirely. I'll reserve other references to the pathetic potus to other Forums.
It is insane how this is the first time I hear about these. I just maxed out for the year along with the wifey. We are saving for a downpayment on a future home within a 3-5 year period.
The only seller and buyer is the USA government. And they dont do advertising for this.
Now...if it was stocks, real estate, cryptocurrencies....then scam artists have every reason to hire an army of publicists to get their propaganda out about how awesome Lehman brothers stock and enron is.
It's be way better to just buy a house and lock in a 3% loan.
@@shawnd567 we are in a massive bubble.
Bershire Hathaway has $150 billion parked into T bills earning close to zero.
Why would Warren Buffett do that? Because you need cash to buy in a fire sale.
Buy low, sell high.
Not buy high, and psnic sell at the low.
I think the only reason we know about em first time is the unique economic situ. I e. , The high inflation!
Nice video and I just purchased my first I Bond!
Jay, your video was outstanding. You were able to make this novice really understand I Bonds. Thank you for your thorough explanation that was done in terms I could understand and digest!
Great Video thank you very much!!!
These sound super interesting Jay, never heard of these before
Great video. Thank you!
Very nicely explained.
Just bought these for the first time. And now looking to January to see what inflation is doing. Administration is putting in place a number of approaches to curb inflation. We’ll see how successful they are.
Wow! This is good info... thanks 😊
A nice, clear and informative presentation. Not one cough, uuum or aaar .. Good job Jay. I only learned about I-bonds, courtesy of my AARP magazine. I had never heard of them and thought the 7.12% interest was a joke. We are looking at these very seriously.
Glad I could be helpful, thanks for watching!
Thanks for the clear explanation
Happy to help!
Great explanation of I bonds.
My coworker just told me about this and I'm really considering it.
This is an incredibly helpful video. It seems like IBonds are the best safe haven for funds in a high inflation environment.
Yup
Nice video man
Appreciate it! Thanks for watching
Thanks, good job.
I Really appreciate the quality of the video as a whole 1.1B% 🤝 this was short and straight to the point and also made me feel more confident in investing. Having 5 kids and knowing this is golden 🏆 thank you so much and may God bless you and everyone else reading this beyond your imagination!
Great explanation! Thanks!
Glad you enjoyed it!
Thanks Jay for the video. Very clear illustration.
Glad it was helpful, thanks for watching!
@@JayFairbrother Thanks. You're welcome.
This is fantastic. Thank you for this video.
Glad you enjoyed it, thanks for watching!
excellent video! Extremely imformative! I'm going to put $1000 in an I-Bond this week
Great video. I wonder how much interest in average bonds historically gave. If it gave more than CD at any given time, investment in these bonds is no-brainer!
Excellent information about an investment option that does not get enough attention. I may have missed it, but another variable with TIPS is that the value of the principal can fluctuate in value. Beautiful when it's going up, buy not so much when it's losing value.
I think I mentioned TIPS in there, or I may have edited that out, I can’t remember now 😅
@@JayFairbrother You did mention them. I don't think you mentioned that the principal is not fixed, like it is with an I Bond
Looking forward to your next video!
I invested in i-bonds back in the year 2000 when the interest rate was 7.2%. Now my money has more than doubled. The best time to buy i-bonds are May and November when the interest rates re-adjust. I have some i-bonds I bought back in 2002 that are earning 10% interest which were purchased in May and November of 2002.
your "money" has doubled....so has REAL inflation
@@benchoflemons398 Unless you invested in 2000 and then needed your money back out in 2009 because you lost your job or wanted to take advantage of low real estate. Remember this is a no risk/ super low risk investment. The stock market is a totally different animal. Obviously you are going to earn more with risker investments, but why buy in at the top when you can buy in at a lower price?
I did too in year 2001, locked in 3% fixed rate for 30 years. My college real estate investment teacher told whole class, i listened
Clear and easy to understand is not always the case with these finance videos but you did a great job, thank you!
Thanks, I really appreciate that!
Very clear I agree
Thank you for the TIPS (no pun intended)
I've got some money on the sidelines that I'm not comfortable putting into the market right now, so this sounds like a good option for the next year or two.
That was my situation and exactly why I put some money into I bonds 👍
Thanks for the video I saw on reddit that I bonds were giving 7% and it sounded too good to be true. Thanks for explaining what they're all about!
Yeah, totally legit! The treasury direct website to buy ibonds on looks a little sketchy, but what do you expect from a government website? 😂
@@JayFairbrother Also very clunky. Their login process is horrible as you have to use a virtual keyboard to key in your password - which is not case sensitive! But those aren't deal breakers for a 7% return.
@@JayFairbrother Does the interest on the 10k I invest stay 7.12% until 30yrs if I decide to hold till then?
@@tilakv No. It adjusts twice per year, basically on CPI.
This was definitely a quality video with everything explained well. Thank you for posting!
How often is the interest compounded and added to your iBond? Monthly? At the 6 month interest reset mark?
Hi Jay,
I bought 10K worth of I bonds about a month ago right after the 7.12 Rate adjustment. This is a great vid, thanks for explaining it in more detail that I had before.
What's been your gain thus far?
Thank you for the great video! Quick question, at the 7:00 mark, you have a table that shows if I buy a bond in February, new rates will take effect February 1 and August 1st. Does that mean the 7.12% rate is set until August 1st or will my rate change May 1st?
7.12 is set through May, then it will adjust up or down depending on the inflation data that comes out then
Great videos. Seems like nows the time to buy some I bonds
Especially now that it looks like the interest rate will be going even higher than 7.12% starting in May!
With how negative real interest rates are right now. These Series I bonds make a lot of sense. If not for negative real yields, either savings accounts or corp bonds would make more sense. Rates are just too low for where inflation is.
Excellent information I would post the government site too.
Thanks! Just opened an account
Jay, Thank you very much for this video. I have a small question, does our Treasury account balance get updated with the interest every month, or all the accumulated interest is deposited at the end of 6 months ?
At the end of 6 months it will show up
Do you have to be living and working in the USA to buy them ?
idk@@dkmyww
I think you missed a feature or two. Interest rates are assigned to an I Bond investment on a six month cycle based on the anniversary month of purchase. I bond rates are adjusted May 1 and November 1 each year. Bond interest rates are whatever they are at the time of purchase but continue for 6 months, at which time the updated rate is applied. (Anniversary dates are adjusted to the first of the purchase month.) Thus a Bond may earn less than the current rate if purchased after the first month of a cycle. Conversely, if the Bond rate goes down, the Bond will earn above current rate until the 6 month anniversary. Thus spreading purchases out could be beneficial by delaying affect of decreases.
He literally said that
Hey Jay, can we keep these i bonds even if we are out state for a year or two after investment made due to visa status?
Great video!
Thanks!
Only risk I see is that if severe hyper inflation occurs you get the average inflation rate over the prior six months. This means you get behind the inflation curve, that could be bad. That said I am still going to max out on these gems as I think hyper inflation in near term is low, and like the risk free aspect in this crazy financial world.
Good point
Is it accrued interest? Or compounded interest?
Who knows what the rates will be in 10, 20, 30 years. So estimating historically, much does it pay for a 10K, I bond. held to maturity, 30 yrs ? Does compounding work the same with semi-annual payments acheiving huge gains at maturity ? And then. wouldn't there be huge income taxes on that one time payment ?
DO you earned that percentage monthly or every 6 months? After the 6 months do you earned compound interest?
Is there any benefit to purchasing say 10, $1,000 bonds over 1, $10,000 bond?
Excellent explanation of this Buried "Treasure" from the Treasury Dept. As a Retired guy (and wife), looking for some additional income to supplement our retirement income with which seems like no risk (unless out current Administration goes Topsy Turvey). I'd like to see more of these advising videos. Looking for solid ETFs or Individual Stocks for good Dividends (AT&T, Exxon Mobil, etc.). THX again.
Thanks! I've got a number of videos on the channel regarding dividend etfs and stocks, check some of those out. Let me know if there's anything specific you want to see!
Quality content!
Thank you! I appreciate it!
One warning. Be very careful to enter all information on the website accurately, or exactly as it appears on official government documents. There is a small, insignificant error on my wife's driver license. Our street name says Lane instead of Street. It's like we live on "Green St." and on her driver license it incorrectly says, "Green Lane". When she went to buy a bond she correctly put "Green St." Without explanation or a chance to fix it, she was unceremoniously locked out of her account, and it is a ROYAL pain to get it unlocked. You have to mail in a request with a guaranteed signiture from a broker! We live in a rural area, no broker in sight. Notary not good enough. Back and forth, back and forth for over a month! If your driver license is wrong, put what is says, right or wrong!!
What if you update your license address? How will that work?
Exactly my thought. Update your DL
Great video! Do you think should buy I-Bonds for kids or under parents' name?
If the I-bonds are expressly for the kids you can do that like people do with typical savings bonds I imagine. Otherwise I’d just buy them in your name
This was a great video. Do you think series EE or I Bonds are better?
I prefer I Bonds over EE bonds. I just think they’re more flexible and will provide better returns in the majority of scenarios
Wats the next rate going to be
Is it going higher after this month
Great information! Is there anything similar to iBonds for amounts over 10k?
TIPS are similar in that the rate adjusts with inflation, but your principal isn’t as protected as with i bonds
You remind me of an SNL actor in looks. Thanks for video.
Brad Pitt was in SNL? 🧐
Good stuff
Great video Jay. I had the EE bonds through my job and had them for years until I needed additional funds, so cash them in and the interest was great. If I knew about the I bond the interest would of been off the chain. You live and learn. This was a great breakdown between the different bonds. Definitely keeping this video on my watch list 👍🏾
Thanks Ken! I bonds are a great tool, I wish I knew about them sooner as well!
@@JayFairbrother why is this the first time i hear about this?
My wife had Series EE paper bonds. in 1992, her mother gave her 12 , $1K Savings Bonds (1992) which are maturing in 3 months. They were purchased at a Discount (50%) for $6K. The current value now after 30 years is $2035 each. Yes, Federal Taxable, but State tax free. In NY thats' about 11-12% Not bad for "forgotten" money , bonds sitting in a safe deposit box. To me, $10K (for each of you -hsuband & wife) at 7.12% interest for investment of low risk cash, is certainly better than .02% you get in a Money Market Account at any bank... even a 1 year CD at Apple Bank is a Whopping 0.90%. Apple Bank is a NY local bank paying the best CD rates I can find.
At least you saved in the first place 👍🏽 there’s always a greater return somewhere else
Great Vid
If you cash them I bonds after 5 years, what kind of return do you get?
Just bought these for the first time . Pretty simple process with lots of information on the site. You can’t exactly move your savings over because it is limited (as he says ) to 10k but I guess you could set these up as a ladder to keep liquid from being impacted by inflation.
It's 10k per SSN. Just fyi.
@@Akira282 😂 what are you suggesting? 😂
@@Akira282 How many SS numbers do you have?
@@alansach8437 I assume he is talking about spouses.
Saving for a down payment on a home. Investing in series i bonds to keep some of it protected against inflation.
Whats actually funny is I saw a few articles about this a few days ago and was considering putting some of my emergency fund in I-bond
Yeah I had too much earning .5% in savings so I’ll gladly take 7% on money I don’t want in the stock market right now
@@JayFairbrother What's the range of interest rate that the government can put on these bonds? I mean, the first 6 months sound pretty good with 7.12% but can they make it like 1% after 6 months?
@@dtsec I have holding IBonds for the last 20 years. The rate changes every six month. However, I know that the rate is always high than the 5 year CD available, maybe 1% higher.
@@dtsec The interest rate depends on the inflation rate, which is tied to the Consumer Price Index. Historically, for example, inflation ran over 13% in 1980, and dipped below zero briefly in 2009. If inflation reaches 13% again, I bonds will pay 13%. If inflation disappears entirely, then I bonds will earn zero percent. They will never earn less than zero, however--even in a deflationary environment. To answer your question, yes, it's possible the interest rate will be 1% next May (when the rates are reset)--but it's not likely. The range is anywhere from zero to whatever you think the upper limit for inflation might be.
I just bought 10k on Dec 30 and another 10k on Jan 3rd. So 20k in. Better than sitting in my ally for 0.5%. In my view it's liquid after 1 year so there is no downside compared to ally.
Great video. Should I buy it today, or wait until May 1? The rate is 7.12% today, and will be likely 9.62% if buying in May.
Posting a video tomorrow that answers just that 😉
Only ever heard of these never had one given to me. HR Block added it as a choice when filing taxes so I decided to look them up.
Did you end up putting any of your tax refund into them?
Can you please make a video showing what a person can (approximately) expect to earn given their investment?
Is this compound? Meaning, am I making interest on the interest I earn? Thank you.
It does!
Great video. I have a fair $ amount in i-bonds and they have adjusted. My only question is why some older bonds didn't adjust to %7? Only newer ones.
They should adjust…depending on when you bought them, they’ll give you 6 months of that initial rate first.
@@JayFairbrother You were right, they all hit. SOme hit 9.72%
No brainer. Inflation is here to stay. Done at max. Wish I could buy more. You can bet I will on January 1st!