2021 Second Quarter Commentary

Italian artist Salvatore Garau last month sold an invisible sculpture in the form of a stamped certificate of ownership for $18,000.  Too bad, if the sale had granted ownership via digital non-fungible token (NFT), I’d speculate it’d have fetched at least $180,000.  One can only imagine….

What’s the investment most opposite from an invisible sculpture and can be purchased at an incredible bargain today?  US Series I savings bonds, among the safest of investments, currently yielding 3.6% annually (cannot be redeemed in the first year, a three-month penalty applies within five years of purchase).

I-bonds’ interest rate varies.  It is a fixed rate, 0% for newly issued bonds, plus inflation, which is currently 1.8%.  Get this...an I-bond will earn you 3.6% annualized until October 31, a rate that will change with inflation semi-annually.  Compare that with other interest rates: short-term Treasury bills, 0.1 to 0.5%; high-yield savings accounts, 0.6%; and CDs, 0.2 to 1.0%.

I-bonds’ interest is also state and local income tax-free.  If redeemed to pay for college expenses of immediate family members, I-bonds’ interest could be federally tax-free depending on income level, $97k for a single, $123k for a joint tax return.

You can buy or receive up to $15,000 in I-bonds per year via the US Treasury Direct web site or with your federal tax refund.  If you buy as a gift for others, with the intention to pay for college, be sure to buy in the parent’s name, due to financial aid eligibility and the above tax advantages.
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Right now, I-bonds are the superior low-risk investment … or, you can always buy yourself an invisible sculpture?!?