A solid investment
Don't invest in a safe; invest in making more money.
IBonds are U.S. Treasury bonds with interest rates that are adjusted for inflation. They are engineered to make sure you always make a real profit, so they never lose value. The interest rate on IBonds right now is 5.64 percent, much higher than a traditional savings account.
So where can you get your hands on some?
Buy IBonds online
Well, it just so happens you can get some at TreasuryDirect, the U.S. Treasury’s web site that lets you do all-online financial transactions. The same way you can get a no-fax payday loan or apply for credit cards without leaving your computer, you can purchase Treasury bonds that will start earning money for you right away.
How to set up an account
Before you set up your TreasuryDirect account, make sure you have these things handy:
- Social Security Number (Taxpayer Identification Number)
- Driver’s License Number or State ID and Expiration Date
- Bank Routing Number and Account Number
- E-mail Address
- A browser that supports 128-bit encryption
When you get to the TreasuryDirect site, click on “TreasuryDirect” under the “Open An Account” menu at the right.
For your eyes only
Only you can open an account for yourself. The site specifically says:
We do not currently permit a legal representative, legal guardian, or trustee to establish an account on behalf of an estate, decedent, trust or incompetent person.
However, there is a different section on purchasing Treasury bonds as gifts.
You don’t need to be rich
You can buy an IBond for as little as $50. While that one $50 bond won’t make you a lot of money, you will make two to three times as much in interest as you would if you put that money into a bank savings account. If you buy one for $50 every month, or even every quarter, that will really add up over time.
The drawback, of course, is that you won’t be able to get to that money for a year after the bond is purchased. And there is a penalty for cashing it out in fewer than five years. But, if you are serious about long-term savings, and you want to make some profit, IBonds are a good way to go.
current rate is 0%, nada, zip, zilth. You should update this article it is misleading showing outdated rate.
Hmmm… that’s definitely something I should look into. My checking account with Wells Fargo pays no interest. And I believe my savings account only pays 0.5% interest per year! There’s clearly no way I’d benefit with a rate like that. Thanks for posting, Elizabeth.
iBonds – interesting. It used to be that you could only get Treasury bonds at banks or depositories, but over the internet makes sense, if there’s the proper security encryption. The Treasury is joining the 21st century..if only we could get Geithner to learn how to properly fill out a tax form, we could be in good shape!