I-bonds are a worthwhile investment
Question: There was a time that Marketplace Money was very pro I-bonds. I haven’t heard them mentioned in years. This year, when I submitted my tax return, I was given the option to purchase I-bonds with my refund. Thoughts? Rebekka, Los Angeles, CA
In Risk Less and Prosper: Your Guide to Safer Investing, authors Zvi Bodie and Rachelle Taqqu (finance professor at Boston University and financial consultant, respectively) give a strong endorsement to owning I-bonds, especially for small savers.
Here is their list of key features. I-bonds …
- Provide security because they are U.S. Treasury securities backed by the full faith and credit of the U.S. government.
- Sell at face value, as a type of savings bond.
- Do not trade in the market.
- Offer liquidity and can be cashed in any time after 12 months.
- Can never have a redemption value less than the amount that you paid for them.
- Continue to earn inflation-indexed interest for up to 30 years.
- Allow investments as small as $25.
- Have a tax advantage.
I couldn’t agree more. I-bonds are a good place to save. So, if it makes sense for you to save your refund, I would definitely consider putting the money in I-bonds.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.