Rating I-bonds.QA I've been purchasing Series I savings bonds Series I savings bond A nonnegotiable U.S. Treasury obligation that pays semiannual interest based on a combination of a fixed rate established by the Treasury and the semiannual inflation rate as measured by changes in the Consumer Price Index. from the U.S. Treasury U.S. Treasury Created in 1798, the United States Department of the Treasury is the government (Cabinet) department responsible for issuing all Treasury bonds, notes and bills. Some of the government branches operating under the U.S. Treasury umbrella include the IRS, U.S. to balance out the more aggressive/speculative ]investments in my portfolio. How would you rate I-Bonds as an investment? --H. Shepherd Via the Internet As you have applied them, Series I savings bonds are an excellent investment. They can work well as a portion of your total bond allocation in a well-diversified portfolio Well-diversified portfolio A portfolio that includes a variety of securities so that the weight of any security is small. The risk of a well-diversified portfolio closely approximates the systematic risk of the overall market, and the unsystematic risk of each security has been . Also called inflation-adjusted savings bonds Savings bond A government bond issued in face value denominations from $50 to $10,000, with local and state tax-free interest and semiannually adjusted interest rates. savings bond A nonmarketable security issued by the U.S. , I-bonds are a very safe investment because market volatility doesn't affect your principal or earned interest. They offer a moderate yield, plus they provide a hedge against inflation, In markets where inflation is expected to rise, I-bonds get a semiannual rate adjustment based on the consumer price index, which ensures that their fixed rate of return does not erode. With analysts predicting rising inflation in 2006, I-bonds become an even more attractive investment. I-bonds have another benefit: The interest they earn becomes tax-free if they are redeemed to pay for qualified higher education expenses Qualified Higher Education Expense Expenses such as tuition and tuition related expenses that an individual, spouse, or child must pay to an eligible post-secondary institution. , such as tuition and fees at colleges and vocational schools. The interest on I-bonds can also be tax-free if they are rolled into a Section 529 plan for your education or that of a spouse or dependent. An individual can only purchase $30,000 worth of I-bonds a year. They are issued at full face value in denominations from $50 to $10,000. You can purchase I-Bonds online at www.savingsbonds.gov. Mail your questions to Money Matters, BLACK ENTERPRISE 130 Fifth Ave., New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , NY 10011 or send an e-mail to scotm@blackenterprise.com. |
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