Attractive Returns for Personal (Non-Retirement).If you are looking for attractive returns for personal (non-retirement) money, and you can afford to leave the money invested for five years or more, then iBonds may be of special interest for you.
U.S.Government's savings bonds Website.Here's a brief description taken from the U.S.Government's savings bonds Website:
"Treasury's inflation-indexed I Bonds are designed to offer all Americans a way to save that protects the purchasing power of their investment by assuring them a real rate of return over and above inflation. I Bonds have features that make them attractive to many investors. They are sold at face value in denominations of $50, $75, $100, $200, $500, $1,000, $5,000, and $10,000 and earn interest for as long as 30 years. I Bond earnings are added every month and interest is compounded semiannually. They are State and local income tax exempt, and Federal income tax on I Bond earnings can be deferred until the bonds are cashed or they stop earning interest after 30 years. Investors cashing I Bonds before five years are subject to a 3-month earnings penalty."
Advantages of iBonds.Here are some of the advantages of iBonds:
- Safety of principal (regardless of market conditions)
- Guaranteed to beat inflation over their life
- Federal Tax Deferral (no taxes due until sold)
- State Tax Free
- Denominations range from $50 to $10,000
- Currently paying substantially more than regular Government bonds
- Earnings may be withdrawn tax-free for certain educational purposes
- Investment is liquid if needed (subject to penalty within 5 years)
- iBonds may be held for up to 30 years
- You must buy them yourself, through banks or Treasury Direct
- There is a 3-month interest penalty if sold within 5 years
- Maximum investment for one person is $30,000 per year
Web Resources.
- For more information on iBonds in
particular http://www.savingsbonds.gov/sav/sbiinvst.htm - More information on Savings Bonds
(including iBonds)http://www.savingsbonds.gov - Where to buy iBonds
http://www.savingsbonds.gov/sav/sbibuywr.htm
