Where can I get a decent rate of return on my investments without the risk of the stock market or the bond market, when interest rates rise?
There is an investment available that very few people are aware of, and it offers these perks:
1) it has a U.S. Government guarantee of no loss of principal.
2) The rate of interest changes every 6 months and increases during higher inflation periods.
3) There are no state or local taxes paid, and only federal taxes paid in year of withdrawal.
4) The minimum investment is $25, and investments can be made up to the penny ( eg. $50.23)
5) Maximum investment is $10,000 per year per social security number.
6) Additional $5,000 per year per social security number can be invested with tax return.
7) Can be redeemed after one year.
8) if redeemed within 5 years of purchase, there will be a penalty of the last 3 months interest. For example, if cashed in 18 months after purchase, investor would receive 15 months interest in addition to original investment.
9) Ideally suited for low risk savers, retirement income supplements, a gift for relatives or friends or a vehicle used as savings for educational expenses.
10) Investment can only be made online at treasurydirect.gov
11) The name of the investment is an I Bond (pronounced eye-bond)
12) The current yield is 1.94% and will be adjusted again in November based on inflation numbers.