US Savings Bond Rate
Following the US Savings Bond rate is a smart way to learn how your money is working for you or if it's working for you. All
our lives, we've been told to save money for a rainy day. Financial advisers and planners will tell you to try to keep between six and twelve
months of income (after taxes) to invest in a savings plan like a money market. This sounds great on paper; however, saving money is getting
harder every day with the economy as it is.
In spite of the tough times, prudent savers continue to put a little of their paycheck into a savings account for an emergency. Things break
down in our home, our cars need maintenance or we have medical & dental emergencies. Often we're faced with unexpected expenses that can't be
put off. When these things occur, we're happy we managed to save some money.
The question that arises a lot is where to put the money while we're saving it. Obviously, we're not going to keep it under our pillow. You'll
want to put it somewhere where it can make money for you. If you check out the US Savings Bond rate, you'll find savings bonds are a great
investment for the future. It's a fact that we don’t spend what we don't have. By investing in US savings bonds, you're guaranteeing a nest egg
for yourself for retirement or for your children.
Before you decide how to invest your money, do some research on the different options available for saving money. You don't want to invest in
the first available option. Whereas money markets used to be a great investment, they're now paying very low interest rates. With savings and
checking accounts, you're lucky if you get 1 to 2% interest. With inflation as it is today, it could quickly become less.
A form of investment worth looking into is "bond ladders", which is purchasing different kinds of bonds that each have staggering maturities.
This method will smooth out your cash flow and minimize risk to your interest rate. Another purpose of bond laddering is to increase the
liquidity of your higher paying investments. After careful review of the US Savings Bond rate, I-Bonds are a choice for many.
I-Bonds, which are backed by the U.S. Government, are a new type of liquid savings bond that can be purchased and sold online at the US
Treasury's website. They not only earn interest but also give your savings protection from inflation while you own them. The current US Savings
bond rate for I-Bonds is 3.39%.
Once you purchase I-Bonds, you cannot sell them for one year. So you don't want to invest all your savings in I-Bonds and have it all tied up
where it can't be used in an emergency. This is where laddering comes in handy. If you have $5,000, invest 10% of this money, $500, in I-Bonds.
Put the remaining 90% in a savings or money market, where it will still be available to you. When the year is up, invest another 10% in I-Bonds,
leaving 80% in your savings. Keep in mind that your first I-Bond can now be sold so you actually have 90% of your savings available for
emergency, and you're still earning interest.
I-Bonds can be purchased from the Treasury Direct without any transaction fees and can be transferred from your bank account. After
researching the US Savings bond rate, you'll see that I-Bonds are a great investment.
| 