US Savings Bonds

Posts Tagged ‘money’

Question: What investment would be best? We have $4K for our emergency fund–$ needs to be liquid but earn interest?

We have $4,000 we want to keep reasonably liquid as an emergency fund but we’d like to earn the best interest on it that we can without risking losing the principal. The stock market is out–too risky for us. Savings Bonds are not liquid enough for us plus interest is not that good. Interest on T-bills is not that good either. Seems like CDs or money market are the only real options…with CDs perhaps being the better of the two options for us. Does anyone have any other suggestions?

Answer: Put the money into an internet bank. They pay as much interest as a CD would, but you can get the money anytime you need it. There are no fees, which you would have to pay if you put the money into a money market fund. It is also very easy to transfer money in and out of the account. For more on this including links to internet banks, click on http://www.vilkri.com/pubreader.php?page=internet_bank

Corruption in America’s Banks 1/3

Question: Are US Series I Savings Bonds a Good Investment?

The IRS allows you to purchase them with your tax refund. Is this a good idea? What is current fixed rate? How is the 6 month inflation number calculated? It is from the CPI?

Answer: Gee Janice. You sure know how to get into the details. It is the CPI-U number published each month by the Federal Bureau of Labor Statistics. CPI-U means Consumer Price Index for Urban Consumers. The Fed usually defines Urban as all large cities plus SMSAs.. SMSA means Small Metroplolitan Statististical Areas. And that means urbanized cities with 50,000 population or more. Is it any wonder that people go nuts trying to understand this stuff.

Anyway. The Series I has two components – the fixed rate you know and the variable rate you should probably just google. If google does not cut it for you then here goes.

The November rate is based on the CPI-U for the previous March subtracted from the CPI-U for the previous September. That difference is then divided by the CPI-U for the previous March. If there is a March to September increase, then you get an increase. If it’s down, your rate goes down. This rate will now apply to bonds from November to April.

The May rate is based on the CPI-U for the previous September subtracted from the CPI-U for the previous March. That difference is then divided by the CPI-U for the previous September. And etc. per previous paragraph. This rate will now apply to bonds from May to October.

Right now I would say a good investment for staying safe and still having a shot at higher rates. Just my opinion on how I see the road ahead.

Professors Xiao, Huo on Current Economy 2/2

Question: During this time of economic crisis, should patriotic Americans buy and hold US Savings Bonds?

Answer: I’ve always bought Savings Bonds for my child, I’ve been doing it for 13 years. Economic crisis or not, those things only increase in value over time.

US National Debt to exceed 14 trillion by end of year? Good time to buy US Savings Bonds? NO!