How to Earn an Inflation Proof 6.89% Yield

Nov 01, 2022
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We’ve seen substantial demand for inflation proof I-bonds.

So much so, investors crashed the U.S. Treasury’s Treasury Direct site.  All as investors rushed to buy Series I savings bonds, which had a yield of 9.62%.  

These bonds are a type of U.S. savings bond that were designed to protect your cash from inflation.  With consumer prices still red hot, investors are turning to higher-returning, lower-risk investments, such as iBonds.  

According to The Wall Street Journal, “I Bonds are guaranteed by the federal government. The bonds pay a fixed rate that is set by the Treasury, plus an inflation-adjusted rate that is determined by the change in CPI over the past six months. Thanks to the upward trajectory of CPI, I Bonds have become a top yielding U.S. asset, even though they carry virtually no risk of principal loss.”

At the same time, according to CBS News, “I-bonds come with some significant limitations. First, one person can buy only up to $10,000 worth of bonds a year, with an additional $5,000 allowed if they use a tax refund for the purchase. For married couples, that limit doubles. Parents can also buy I-bonds for their children (under age 18), although they need to set up separate accounts for each kid.”

Another unfortunate issue is that these bonds no longer yield 9.62%.

Now, for the next six months, you can still invest in these bonds, but you’ll now receive a yield of 6.89%, which is still respectably high.  Plus, these are backed by the U.S. government.  They don’t lose value, and they earn monthly interest.  

As long as inflation remains high, so should the yield on these bonds.