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Submitted URL: https://fun.riadatabase.com/MDAxLVFZVy01NTgAAAGIkXXrEwJ7i97eUnKupj1wfW_Q4MttHy3fPAv_erBdcJRfntoqZ7tt4jfoEovm2MjECI8y2n8=
Effective URL: https://www.vaneck.com/us/en/blogs/income-investing/i-bonds-question-and-answer/?mkt_tok=MDAxLVFZVy01NTgAAAGIkXXrE6Zm4q...
Submission: On December 12 via api from US — Scanned from DE
Effective URL: https://www.vaneck.com/us/en/blogs/income-investing/i-bonds-question-and-answer/?mkt_tok=MDAxLVFZVy01NTgAAAGIkXXrE6Zm4q...
Submission: On December 12 via api from US — Scanned from DE
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Contact Us Our Firm Contact Us * US Investor Services * US Client Services * International * VanEck Store Our Firm VanEck Store * Shop Now * Subscriptions * Insights * Income Investing I BONDS: QUESTION & ANSWER November 22, 2022 Read Time 3 MIN Share * LinkedIn This link opens a new window * Twitter This link opens a new window * Facebook * Share With a Friend * Print Share Page SHARE WITH A FRIEND All fields required where indicated (*) Your First Name Your Last Name Your Email Address Friend's First Name Friend's Last Name Friend's Email Address Share BY SUBMITTING YOUR EMAIL YOU ACKNOWLEDGE THAT YOU HAVE READ THE ONLINE PRIVACY POLICY I bonds are a safe and easy way to save for the future and offset the negative impact of inflation over time. Inflation is often referred to as a “silent thief.” And for good reason. If inflation is running at 3% per year and a person has $10,000 in savings, then after one year their savings will be worth $9,700 in terms of purchasing power. In other words, inflation has reduced the real value of their savings by 3%. This can be a particular problem for people who are retired and relying on their savings to support themselves. I bonds are an effective way to help investors mitigate the negative impact of inflation over time. * What are I bonds? * What are the benefits of I bonds? * How do interest payments work? * Are I bonds taxed at the federal level? * How do you purchase I bonds? WHAT ARE I BONDS? I bonds are a type of savings bond that are issued by the United States Department of the Treasury. I bonds are unique in that they offer both a fixed rate of interest and an adjustable rate of interest. The fixed rate portion of the I bond is set at the time of purchase and remains fixed for the life of the bond. The adjustable rate portion is based on inflation, as measured by the Consumer Price Index (CPI), and is updated every six months. WHAT ARE THE BENEFITS OF I BONDS? The fixed rate remains constant for the life of the bond, while the adjustable rate fluctuates in response to changes in inflation as measured by the CPI. So, if inflation ticks up, an I bond will pay a higher interest payment. As a result, I bonds provide a relatively safe way to protect savings from inflation. In addition, I bonds are exempt from state and local taxes, making them an attractive investment for many people. HOW DO INTEREST PAYMENTS WORK? Interest accrues monthly and is compounded semiannually. However, investors do not receive interest payments until the bond is redeemed, and you must own an I bond for one year before it can be redeemed. In addition, if you redeem the bond within the first five years after purchase, you will incur a penalty that is equivalent to the last three months of interest on the I bond. ARE I BONDS TAXED AT THE FEDERAL LEVEL? I bonds are exempt from state and local taxes. In most cases, investors owe federal taxes on the interest earned from I bonds. However, interest earned on I bonds can be excluded from federal taxes if it is used for qualified education expenses, a feature that makes I bonds a good tool for college savings. Because interest payments are not made until the bond is redeemed, investors have the option to defer reporting the interest for tax purposes until the year in which interest payments are distributed. HOW DO YOU PURCHASE I BONDS? I-bonds can be purchased in denominations of $50, $75, $100, $200, $500, $1,000, and $5,000. I-bonds have a maximum maturity of 30 years and can be redeemed after one year. Generally, you can purchase up to $10,000 of I-bonds in a calendar year. However, this limit applies to entities, not individuals. If you own different trusts and limited liability companies, each of these entities can purchase $10,000 of I bonds per calendar year. I-bonds can be purchased online, through a bank or broker, or by mail. To receive more Income Investing insights, sign up in our subscription center. RELATED INSIGHTS Income Investing Video HOW TO CONSTRUCT A FIXED INCOME PORTFOLIO FOR 2023 December 09, 2022 Income Investing Blog IS HIGHER INCOME FOR REAL? December 05, 2022 Municipal Bonds Blog NEW MUNICIPAL ISSUANCE: SUPPLY CONSTRAINTS TO PERSIST? December 01, 2022 IMPORTANT DISCLOSURES Please note that VanEck may offer investments products that invest in the asset class(es) or industries included in this communication. This is not an offer to buy or sell, or a solicitation of any offer to buy or sell any of the securities mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results. Information provided by third-party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. Any opinions, projections, forecasts, and forward-looking statements presented herein are valid as of the date of this communication and are subject to change without notice. The information herein represents the opinion of the author(s), but not necessarily those of VanEck. All investing is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future performance. Van Eck Securities Corporation, Distributor, a wholly owned subsidiary of Van Eck Associates Corporation. 666 Third Avenue | New York, NY 10017 RELATED INSIGHTS 1 - 3 of 5 Income Investing Video HOW TO CONSTRUCT A FIXED INCOME PORTFOLIO FOR 2023 December 09, 2022 Income Investing Blog IS HIGHER INCOME FOR REAL? December 05, 2022 Municipal Bonds Blog NEW MUNICIPAL ISSUANCE: SUPPLY CONSTRAINTS TO PERSIST? December 01, 2022 Income Investing Blog IG BONDS: VALUATION AND SELECTIVITY MATTERS November 14, 2022 Income Investing Webinar BONDS ARE BACK: INCOME IDEAS FOR RIGHT NOW November 10, 2022 INCOME INVESTING More from this category View More 1 - 3 of 5 Income Investing Blog IS HIGHER INCOME FOR REAL? Fran Rodilosso Head of Fixed Income ETF Portfolio Management December 05, 2022 VanEck’s Fran Rodilosso recently joined Bloomberg Real Yield to discuss inflation, the Fed and the positive outlook for fixed income investors heading into 2023. Municipal Bonds Blog NEW MUNICIPAL ISSUANCE: SUPPLY CONSTRAINTS TO PERSIST? Tamara Lowin Senior Municipal Credit Analyst December 01, 2022 During the remainder of the year, demand for tax-exempt income is expected to continue to outpace the supply of new municipal issuance, increasing the likelihood of solid performance into 2023. Income Investing Blog IG BONDS: VALUATION AND SELECTIVITY MATTERS William Sokol Director of Product Management November 14, 2022 With investment grade corporate bond yields providing meaningful income and with elevated market volatility, we believe there are now opportunities in mispriced bonds with attractive valuations. Income Investing Blog CARRY BOOSTS FIXED INCOME RESILIENCE IN LIKELY FED SCENARIOS Fran Rodilosso Head of Fixed Income ETF Portfolio Management November 10, 2022 What happens to fixed income returns if there is a Fed pause, pivot or hawkish surprise? Thanks to currently attractive carry, we believe fixed income may be resilient in various scenarios. Asset Allocation Blog INC: QUESTION AND ANSWER November 03, 2022 @ Subscribe STAY INFORMED SUBSCRIBE TO INCOME INVESTING Email Address* First Name* Last Name* Investor Type (Select) Asset Manager Custodian Financial Advisor Individual Investor Institutional Insurance Retirement RIA (Select)Asset ManagerCustodianFinancial AdvisorIndividual InvestorInstitutionalInsuranceRetirementRIA (Select) Country -- Select an option -- United States American Samoa Guam Northern Mariana Islands Puerto Rico United States Minor Outlying Islands Virgin Islands, U.S. -- Select an option --United StatesAmerican SamoaGuamNorthern Mariana IslandsPuerto RicoUnited States Minor Outlying IslandsVirgin Islands, U.S. United States Subscribe Now By subscribing I acknowledge that I have read the Online Privacy Policy. 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