CINCINNATI — With the stock market down so far for the year, bonds down in the face of rising interest rates, and bank CDs still paying around a paltry 1% APR, it seems it's impossible to earn a good return on your money in 2022.
So how would you like to earn 7% to 9% on your money, guaranteed?
Savings bonds look better than ever
Normally if someone promises you a 9% return on your money, most sane investors run, suspecting a scam.
But not in the case of the US government's Series I Savings Bonds.
These formerly boring bonds, based on current inflation figures, are currently paying a nice 7% a year, up from 3% a year ago, when no one noticed or cared.
But here is the best part: according to the Wall Street Journal, they are expected to readjust to 9% in May, due to the latest inflation numbers.
If it sounds too good to be true, they come with a few catches:
- You can't cash them before one year is up.
- If you sell before 5 years, you lose two month's worth of interest.
- If inflation drops to 3% later this year (which some anaylsts say is possible), your bond will readjust down to 3%.
- You can only purchase $10,000 worth, and you cannot buy them in your 401k or IRA retirement account.
Even if inflation drops to 3% or 4% later this year, you will still have earned an average of 6% for the year, which these days is not bad.
Go to the government's website, Treasury Direct, to learn more and order these bonds.
There are few good things about rising interest rates, but rising savings bonds yields are one of them.
As always don't waste your money.
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