Stash Some Cash at 9.62% Before October 31?

annualized 9.62% interest rate for 6 months

I Series US savings I bonds (I bonds) purchased before 10/31/22 are paying an annualized 9.62% interest rate for 6 months. The rate decreases in November to an estimated 6.48% for the next 6 months. If you are looking for a place to park cash for more than 12 months, you may want to consider purchasing I bonds before the end of October (no later than 10/28/22).

Go to treasurydirect.gov to purchase directly from the U.S. Treasury.

Points to Ponder:

  • I Series savings I bonds include a fixed rate and an inflation-adjusted rate, adjusted every 6 months.
  • These are 30-year I bonds but can be cashed at any time after 12 months.
  • You will pay a penalty for cashing in within the first 5 years. The penalty is equal to the last 3 months of interest. So, if you hold for 15 months, you will receive interest for 12 months.
  • You can purchase up to $10k per individual social security number or entity federal identification number. For example, a family of 5 could purchase $50K plus gifted amounts.
  • You can purchase additional amounts, up to $5k per individual social security number or entity federal identification number in paper I bonds via tax refunds.
  • Paper I bonds pre-2008 can be converted to electronic I bonds in your Treasury Direct account.
  • You can gift I bonds to increase the amount that can be purchased at the current high rates. Gifted I bonds will be held in your gift box until the beneficiary “receives” them.
  • I bonds are exempt from state & local taxes.
  • For more information, see 31 Code of Federal Regulations sec 363.16.
  • Gifts are irrevocable. The holding period starts when they are purchased, not when they are received. Gifts received count towards the annual purchase limit.

Disclaimer: The information provided above is not meant to be legal or tax advise. You should consult your CPA and attorney to determine the best course of action for your situation.

~Mitzi E. Sullivan, CPA

Mitzi E. Sullivan, CPA is a cloud based professional services provider specializing in cloud accounting.

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