U.S. interest rates have soared everywhere but savings accounts

Post by cbhl » Sun, Apr 24, 2022, 3:59 AM UTC

everybodyknows wrote: post #280

twblalock wrote: post #256

After one year, I-bonds are pretty similar to savings accounts and they are indexed to inflation. Your money won't grow, but it won't shrink either -- and as Treasury bonds they are the lowest-risk investment that exists. If you buy some today, they will pay 7.12% for the next 6 months. After that they will probably be adjusted to pay even more, based on the current inflation rate. There are two major catches: you ha…

For anyone who filed a 4868, and expects a refund, note that up to $5000 of it can be claimed in the form of paper I-bonds. This limit is independent of the $10000 online bond limit. There is a nuisance factor in that some portion will be delivered in small denominations -- down to $50. If you're using TurboTax, the necessary checkbox is well hidden. Look for a "more options" tab or some such, IIRC.

Post by deanmoriarty » Sun, Apr 24, 2022, 4:05 AM UTC

quickthrowman wrote: post #168

ac29 wrote: post #145

Earlier quoted context omitted.

I think you're underrating the liquidity of treasuries. For all practical purposes, a treasury is as liquid as a savings account. Yes, the market will take a little bit in the bid/ask spread. Note: I am not suggesting holding long term treasuries as a substitute for a savings account here, though a ladder of short term treasuries could be an alternative when conditions are favorable, like now.

Yes treasuries are liquid, but a 100 bps rise in yield in a 10y bond means the face value is 10% less. Duration risk is (bps yield increase * years) where 100 bps is 1%. Duration risk matters a lot less with the shorter dates issues.

Post by [deleted] » Sun, Apr 24, 2022, 4:08 AM UTC

cbhl wrote: post #281

everybodyknows wrote: post #280

Earlier quoted context omitted.

For anyone who filed a 4868, and expects a refund, note that up to $5000 of it can be claimed in the form of paper I-bonds. This limit is independent of the $10000 online bond limit. There is a nuisance factor in that some portion will be delivered in small denominations -- down to $50. If you're using TurboTax, the necessary checkbox is well hidden. Look for a "more options" tab or some such, IIRC.

This seems like oddly-timed tax advice -- the filing deadline (without extensions) was Apr 18 and today is Apr 23.

Post by dllthomas » Sun, Apr 24, 2022, 4:12 AM UTC

imtringued wrote: post #140

smm11 wrote: post #94

Trickle-down only works when it isn't for 'consumers.'

I think it is pretty common knowledge that money has diminishing returns. What I find absurd is that people actually bought the trickle-down nonsense. It's almost on the same level as flat earth. It's sooo obvious that this isn't how the economy works. If you want to give money away, give it to those who actually need it not those who need it least.

Post by twblalock » Sun, Apr 24, 2022, 4:18 AM UTC

Bluecobra wrote: post #288

twblalock wrote: post #256

After one year, I-bonds are pretty similar to savings accounts and they are indexed to inflation. Your money won't grow, but it won't shrink either -- and as Treasury bonds they are the lowest-risk investment that exists. If you buy some today, they will pay 7.12% for the next 6 months. After that they will probably be adjusted to pay even more, based on the current inflation rate. There are two major catches: you ha…

In addition to I bonds you can also buy up to $10K in EE bonds per year as well. These double in value, but you have to hold on to them for 20 years until they mature. I treat this as as retirement savings. For example, if you buy them when you are between 40 and 50 years old, you will have $200K of risk free money by age 70. Also, both I bonds and EE bonds are tied to the individual. If you are married your spouse c…