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5 Reasons to Consider Series I Savings Bonds Now: Jeff Levine

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There aren’t many positives when it comes to the increased inflation we are experiencing, but the high inflationary environment has made Federal Series I Savings Bonds “significantly more attractive for investors,” according to Jeffrey Levine, chief planning officer at Buckingham Wealth Partners and lead financial planning nerd at Kitces.com.

Fixed income investments represent an “important component in a portfolio because of their ability to cushion against equity market losses,” he pointed out in a Dec. 8 blog post on Kitces.com. But fixed income holdings have “not had much luck during the low-interest-rate environment of the past few years,” he said.

That, however, has changed now amid increased inflation. I bonds are offered via the Treasury Department and are backed by the U.S. government. They can be bought through the TreasuryDirect website. Such purchases are limited to $10,000 each year per person.

What makes I bonds unique is their interest structure, which is made up of a combined fixed rate and inflation rate that, together, make a composite rate, which Levine noted is the actual rate of interest that an I bond will earn over six months.

But because I bonds are “completely illiquid for the one-year period following their purchase (unless a Federally-declared disaster happens), they “would clearly not be an appropriate investment option for anyone who may need access to such funds during that time,” he warned.

See the gallery above for five good reasons why advisors and their clients ought to consider I bonds right now — and, by right now, Levine means before Jan. 1.