Low-risk saving just got considerably more lucrative. Forget cryptocurrencies and junk bonds, individuals can now get a whopping 7.12% direct from the U.S. government.
That’s the new rate for Series I savings bonds bought from the U.S. Department of Treasury from now through April 2022 -- the second highest ever offered.
Rising inflation is responsible for the eye-popping headline rate. Labor shortages have pushed wages up, and the ongoing pandemic continues to wreak havoc on the supply chain, a combination that’s led to higher prices across the U.S.
The interest rate on the Series I bond is set twice a year based on recent changes to the the consumer price index for all urban consumers, so November’s pricing is based on the change from March to September. The rapid surge in inflation means you’ll now get double the six-months-ago offer of 3.54%.
With interest rates still at crisis-era levels, it’s one of the few places individuals looking for inflation protection can turn without getting into higher risk investments.
The interest rate is guaranteed for the first six months and after that will rise or fall depending on inflation. You have to hold onto your investment for at least a year, and if you exit before five years, you’ll lose three months of interest.
The maximum investment is $15,000 per calendar year, they aren’t tradeable, and purchases are limited to U.S. citizens, residents and employees.
This article was provided by Bloomberg News.