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Make Easy Money with This Investment During the Recession (It Might Be Your Last Chance)

I-Bond Rates are High, but Maybe Not for Much Longer

Disclosure: This post may contain affiliate links.

Yes, it’s possible to make easy money with investing, but not without a little research first.

Whether we’re in a recession or not may be up for debate, but there are several things that are true:

1.) The stock market sucks right now.

2.) Inflation is a pain in the butt.

And —

3.) The Federal Funds Rate increases have helped to completely decimate the returns on many different kinds of investments, including real estate.

Still, there’s one classic investment that is often overlooked: savings bonds.

US Series I Bonds

Look, theses aren’t your grandma’s savings bonds. Instead of those old paper bonds that most people think of, today’s bonds are usually electronic. (At least that’s what the treasury calls it — “virtual” or “digital” seem like better terms to me.)

Interest Rates

The reason that now is a really good time to invest in US Series I Savings Bonds is because the interest rate for this period is just so darn high. Right now it’s sitting at 9.62%! (I challenge you to find rates like that anywhere else right now.)

Where to Buy Get Them

As an individual, you can purchase up to $10,000 worth of US Series I Savings Bonds per year. Here’s where to get them:

TreasuryDirect

Until recently, I bonds were only available directly from The US Treasury. Sure, the TreasuryDirect site is a little old — I can attest that it hasn’t really changed in appearance since 2008 — but if you want direct-from-the-source service, that’s the way to go.

Yotta

However, just last month FinTech bank Yotta launched their new I-Bonds Bucket. Per their FAQs page, Yotta makes this possible by creating a TreasuryDirect account for you.

“Please note that By transferring funds to the I-Bonds Bucket through the Yotta Technologies Inc. (“Yotta”) application, you are permitting Yotta to create an account and purchase US Treasury issued I-Bonds on your behalf through treasurydirect.gov. The I-Bonds will be held in your name.” -Yotta

If you later want direct access to the account that Yotta created in your name, you’ll need to contact them directly for assistance. (Seems like a headache to me, to be honest.)

Tax Return

I should also mention that you actually can still get paper bonds if you want them. It’s just that you can only do so when you’re filing your tax return with the IRS. Even then, you can only get them if you have a return; if you owe money to the IRS, then you can’t buy any paper bonds.

What’s the Rush?

The US Treasury adjusts the interest rates on I bonds twice per calendar year. These adjustments happen every six months, in May and November.

This means that the interest rate on I bonds will change on November 1st of this year. Many expect the new interest rate to actually decrease.

In short, this just means that you have only a week or two left to lock in the high 6-month 9.62% interest rate before it’s gone for good.

A Word of Caution

It’s generally only a good idea to invest money that you don’t absolutely need, and buying savings bonds are no exception to this rule.

When you purchase a Series I bond, you can’t cash it in for at least 1 year. In addition, if you want to cash in your bonds before 5 years is up, then you must forfeit 3 month’s worth of interest as a penalty charge.

So just make sure that when you’re investing in bonds that you’re only investing money that you can afford to part with for 1 to 5 years or more.

Loopholes Anyone?

Remember how I mentioned earlier that you can only buy $10,000 worth of Series I bonds per year? Well, that’s not entirely true. As it turns out, there are a couple ways to get around that limit.

First, it’s true that you can only purchase $10,000 in electronic savings bonds at TreasuryDirect.gov; but the Treasury Department actually allows you to purchase $5,000 of paper Series I bonds with your IRS tax refund too. It’s not one or the other. This means that the true limit for an individual is actually up to $15,000 per year.

Secondly, there is no limit to how many Series I bonds you can gift to other people. Whether it’s a spouse, your children, or someone else — so long as you have their social security number, you can gift savings bonds.

Finally, if you own a business that is considered a separate entity (not a sole proprietorship), you can use your EIN to purchase savings bonds. This way your business will also be able to purchase savings bonds. That, in addition to your personal individual purchases, could effectively double your over all bond investment.

Don’t Miss Out

Time is of the essence if you don’t want to miss out on this record high interest rate. Even if you aren’t able to buy any bonds until after October 31st, it may still be worth it.

Just be sure to check with your financial advisor about which strategies are best for you and if I-bonds fit your personal financial needs.

This article was originally published on OhHeyItsRay.com

Oh Hey, It’s Ray is a real estate investor, entrepreneur, and former real estate agent. She lives happily with her husband and two children in the Pacific Northwest. See more from Ray at her YouTube channel and on Ohheyitsray.com