Women's Institute For A Secure Retirement

Looking for a gift idea you can feel good about? Well look no further than I Savings Bonds. One thing to be thankful for today is the new and improved interest rate on I Savings Bonds. While I Savings Bonds were earning 4.28% this time last year, the interest rate has increased to a whopping 5.64% through April 30, 2009. I Savings Bonds are government-issued bonds that earn interest each month, and the interest is compounded every six months. The I Bond is currently providing a higher return than the EE Bond. Since becoming available, the I Bond has been very popular; sales of over $3.2 billion were reported in the first year.

Here are a few things you should know about the I Bond:

• You can buy I Bonds at face value; for example, you would pay $50 for a $50 bond.
• Earnings are exempt from state and local income taxes
• Federal income taxes can be deferred for up to 30 years, or until you cash them in, whichever comes first.
• You can earn interest on them for up to 30 years and can cash them out after 5 years without losing interest (You will lose three months’ interest if you cash them in sooner.)
• You can now buy savings bonds with automatic deductions from your checking or savings account on a regular basis through the Easy Saver plan, or on the Internet.

I Bonds are a great gift for kids! You can show them how to calculate the value of their savings bonds every year. For more information on I Bonds, go to www.savingsbonds.gov or call 800-487-2663.

This entry was posted on Thursday, November 27th, 2008 at 3:05 pm and is filed under Holiday Spending, Investing, Savings, Thanksgiving. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.