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November 11, 2016 by Michelle Morris

I-Bond Interest Rate Alert

Hello!

Every 6 months, on the first business day of May and November, the interest rate on your Inflation Linked Savings Bonds (I-bonds) changes based on inflation as measured by the Consumer Price Index.
The current inflation adjusted interest rate
for your I-bonds is: 2.76%

 
This will be added to whatever fixed rate your individual I-bonds carry.

Inflation has been tame recently, so I-bonds are not paying a lot. However I still like them for five reasons:

  1. I-bonds are inflation protected = you don’t lose purchasing power.  If inflation climbs so will the interest rate
  2. I-bonds are principal protected = you cannot lose money
  3. I-bonds are tax deferred = you don’t pay any federal tax on the interest until you cash the bond
  4. I-bonds are state income tax free
  5. I-bonds have an education tax exclusion = qualified taxpayers can use the bonds to pay for qualified education expenses tax free

To my knowledge there is nothing else available today with this unique combination of features.
Building a position in I-bonds over time (purchases are limited to 10K per social security # per year) as a part of a well diversified portfolio is a great opportunity to add inflation protection to your portfolio with no risk of principal loss!

Best,

Signature

 

 

 

Michelle Morris, CFP®, EA
BRIO Financial Planning

Topics: Filed Under: Investing

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From the Blog

  • Capture Those Dollars!
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Investment advisory products and services are offered through advisory representatives of BRIO Financial Planning, an investment advisor registered with the Commonwealth of Massachusetts.

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Contact Us

Michelle Morris, CFP® EA
BRIO Financial Planning
1073 Hancock St. #101
Quincy, MA 02169

michelle@briofp.com
617-934-0419 (phone)
617-934-1933 (fax)

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