The Wall Street Journal gives us some Investment Options For Beating Inflation Want something with zero risk of default? The federal government offers an instrument that currently has a better payout than yields on many TIPS. That's a savings bond called the I Bond, which got a boost as a result of last week's CPI report. Starting May 1, yields on new I Bonds are likely jump to more than 5% from the current 4.28%, based on the March CPI report.
But act now on I Bonds, whose payout combines a fixed rate and an inflation-tracking rate. Investors who snap up I Bonds before the end of the month will be able to lock up a better return. New I Bonds issued after May 1 likely will yield less. The Treasury Department is expected to lower the fixed rate on new I bonds to 1% or less from the current 1.2%, given a general decline in Treasury yields. If you want to purchase I Bonds you can do so by opening a Treasury Direct account online.Labels: Inflation Savings |
You can also buy paper I Bonds at most banks. It takes less than fifteen minutes to do the paperwork, and then the government mails you the bonds. Some folks are having to jump through hoops to prove their identities to purchase electronic bonds so buying paper bonds may prove to be a more convenient alternative.