Treasury bond
Hi Terry,
I have been following your WGN segments as they pop up. I do understand some safe things to do with “chicken” money and T bonds.
So I jumped into the investment circle of t-bonds.
My first one purchased for $100 is a 5 year TiPS bond. I was looking for your recommendation but as a t-bond “newbie” would like some “pointing to the rught bond recommendation”. By that I mean the most bang for the buck at a $100 a crack
One final thing, is there a calculator that tells me roughly what that will pay off?
And in the end does it just stop or does it continue. Or does it just end and returns my dividends?
Sorry much to learn in this newer investment category.
Thanks for any advice! Enjoy the rest of your holiday weekend.
Terry Says
Honestly, I don’t think you purchased a 5-year TIPS bond — especially if you bought directly from your account at TreasuryDirect.gov. I suspect you purchased an I-bond, which must be held 5 years. And at the conclusion if you cash it in, you pay ordinary federal income taxes on the accrued interest. Since the interest rate on I-bonds changes every 6 months, you don’t know what the ultimate cash-in value will be until it happens!
Read this: https://www.terrysavage.com/i-bonds-everything-you-must-know/
If somehow you got to someone who sold you a TIPs security, please write back. Typically those should not be purchased outside a retirement account, because you pay taxes on phantom interest along the way. That’s why I doubt you bought a TIPS
