I-Series savings bonds are an ideal gift, not only for future generations, but also for investors who want to add inflation protection to their product portfolio.
Ibonds are one of EE series savings bonds, which have many similar characteristics.
Like EE series savings bonds, iBond can be directly owned by minors, and other assets such as stocks and real estate should be held in trust. This makes them a good gift for future generations. Like savings bonds, I-bond proceeds used to pay college fees are exempt from federal tax when the owner (and his fees) meet certain criteria.
According to the consumer price index (CPI), bonds pay a fixed interest rate and another interest rate that changes according to the current inflation rate. With the support of the United States government, they have provided unique protection and guaranteed that it will never be damaged. If the economy enters a period of deflation, the annual interest rate of Aibao will never be lower than 0.00%.
The face value of Ibons is as low as $25. At present, it can only buy $10,000 a year. Bonds are not traded and are intended to be held as long-term investments. Their maturity is 30 years. Investors can realize within 12 months after the purchase, but if they realize within 5 years after the purchase of I-bonds, they will lose 3 months of interest. Like savings bonds, when you hold a bond, the interest generated by the bond does not pay interest. Interest will accrue when you sell bonds or when bonds mature. The good news is that Ibonds pays interest irregularly, so the owner does not pay tax before the sale or the bond matures.
Ibonds are taxed at the federal level at the time of sale, but do not have to pay state or local taxes. Because of this, it is often pointless to detain them within the IRA.
Ibonds pay interest irregularly, so it will generate income when selling. For those who want to pay their living expenses with the current interest of bonds, this is not a good choice. However, the long-term maturity and inflation protection function of Ibonds are very suitable for young family members.
Visit the TreasuryDirect website to learn more about Ibonds and purchasing methods.
