http://thefinancebuff.com/2009/10/i-bonds-hold-or-sell.html like a friend telling you about money ... Thu, 11 Mar 2010 22:05:17 -0600 http://wordpress.org/?v=2.8 hourly 1 http://thefinancebuff.com/2009/10/i-bonds-hold-or-sell.html/comment-page-1#comment-2806 Mr. GoTo Sat, 17 Oct 2009 15:40:32 +0000 http://thefinancebuff.com/2009/10/i-bonds-hold-another-year.html#comment-2806 You mention that I-Bonds are free from state income tax but it's also important to note that federal income tax on the interest is deferred until you redeem them. This is a huge advantage over CDs for example. You mention that I-Bonds are free from state income tax but it’s also important to note that federal income tax on the interest is deferred until you redeem them. This is a huge advantage over CDs for example.

]]> http://thefinancebuff.com/2009/10/i-bonds-hold-or-sell.html/comment-page-1#comment-2803 enonymous Fri, 16 Oct 2009 20:31:55 +0000 http://thefinancebuff.com/2009/10/i-bonds-hold-another-year.html#comment-2803 Since I hold my I bonds as part of my emergency fund, I'm more than happy for it to grow at 1.2% + inflation over the next 20+ years. The put option of dumping them and rebuying only becomes useful if the fixed rate rises above 1.2% (all of my I bond holdings are 1.2% or slightly greater in fixed rate - I missed out on the early jubilee with the super high fixed rates!). A short period of 0% growth is better than the alternative of an unknown real yield in the long term. Moreover, the fact that I-bonds are completely tax deferred until they are redeemed (and they are 100% liquid - and rapidly) makes them a no brainer for emergency fund money. I would strongly advise those who hold I bonds at 1% or greater fixed rates to stick with them - especially if they are in a high tax bracket. They are one of the few good deals left out there. Since I hold my I bonds as part of my emergency fund, I’m more than happy for it to grow at 1.2% + inflation over the next 20+ years. The put option of dumping them and rebuying only becomes useful if the fixed rate rises above 1.2% (all of my I bond holdings are 1.2% or slightly greater in fixed rate – I missed out on the early jubilee with the super high fixed rates!). A short period of 0% growth is better than the alternative of an unknown real yield in the long term. Moreover, the fact that I-bonds are completely tax deferred until they are redeemed (and they are 100% liquid – and rapidly) makes them a no brainer for emergency fund money. I would strongly advise those who hold I bonds at 1% or greater fixed rates to stick with them – especially if they are in a high tax bracket. They are one of the few good deals left out there.

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