Unusual Interest Rate Opportunity, 7%

You’ve heard of teaser rates right? Those special deals offered by banks or credit card issuers to give you a super good deal to entice you to move your business to them. There’s always fine print. For a limited time only, rates return to normal after ‘X’ months. You read the fine print some more and realize that also after ‘X’ months you can hop to the next lily pad for the next guy’s teaser rate. It’s a little bit of effort and businesses are counting on most takers not bothering to move their business again.

On the other hand, for people willing to put in a small amount of effort, you really can make a little bit extra money taking advantage of those special offers.

Circumstances have aligned such that the U.S. Treasury now has an unintentional special offer teaser rate. You can earn a 7% annual interest rate on your savings for the next six months. How? I-bonds. “I bonds have an annual interest rate derived from a fixed rate and a semiannual inflation rate.” If you buy now, before I-bond interest rates go through their semi-annual reset, you can lock in that 7% rate. Are there catches? Of course. You basically can’t get your money out for the next twelve months, even with a penalty. It’s REALLY locked up. Also, the limit is $10,000 per person. If you have a large investment portfolio with a significant cash position, $10,000 may not make that much difference to you. Everyone should have such problems.

The bottom line is that you can earn $350 interest on $10,000 for the next six months if you can afford to lock it up for a year. If you’re getting a significant tax refund, you can receive it directly in up to an additional $5,000 of I-bonds.

It takes maybe 15-30 minutes worth of effort now and less when you decide to redeem next year or at a later time. Get your checking account information and your driver’s license and go to treasurydirect.gov to open up an account. Once that’s done, purchase $10,000 worth of I-bonds. There. You’ve earned yourself $350 for much less than an hour’s worth of work. Now that you know how to do this, you can help family members open up accounts too. Do you have parents or adult children that can take advantage of this? Help them as well. Do you have a trust or a business? Every entity you control can open up an account.

There are more details but the information is readily available on treasurydirect.gov. Feel free to call me or email me to discuss.