Keeping extra cash in your savings account doesn’t get much return (less than .2% on average) and even the ‘high-yield’ savings accounts are only earning .4%. You are hopefully putting some of your earnings into the stock market (index funds), which is hard to beat for long-term investment earnings. But with savings rates so low, where is a safe place to park your cash, especially if you don’t need it for 5–7 years? You should look at bonds, particularly Series I Savings Bonds from the U.S. Treasury! These bonds are earning over 3.5% return (8x the high-yield savings accounts) and come with tax savings that you can’t get from a bank account. The Series I Bonds are such a good deal that Americans are limited in how much they are allowed to purchase in a calendar year.
Below is an outline of all the benefits and the few downsides of Series I Savings Bonds. I have essentially just summarized the Treasury Department’s TreasuryDirect’s website. The TreasuryDirect website is where you should go to learn more and to create an account and to purchase Series I Savings Bonds.
Basics of Series I Bonds: the good!
- Amount: Series I Bonds are limited to U.S. citizens and only $15,000…
