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Buy I Bonds BEFORE The 9.62% Interest Rate - Here's Why! - YouTube
Channel: Jay Fairbrother
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how's it going everybody welcome back to
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the channel my name is jay and inflation
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numbers just came out for march 2022
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that means we now have the six months
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worth of inflation data needed to set
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the new i-bonds interest rates that will
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begin may 1st of 2022 so we'll go over
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what that inflation data looked like how
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we can use that to determine what the
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new i-bond interest rates will be why
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some of you may not see this new rate on
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may 1st and most importantly why you
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shouldn't wait until may 1st to buy your
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eye bonds and you should do it now so if
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that sounds good to you hit the like
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button on this video subscribe to the
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channel and let's get into it so as i
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said at the opening march 2022 inflation
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data just came out today as i record
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this and inflation in the month of march
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was a whopping 8.5
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now obviously that is not good news for
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any of us for life in general but what
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it is good news for
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is our i bonds and our i bond interest
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rates so the current rate we've been
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receiving on ibonds has been 7.12
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already the highest interest rates ibons
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have ever paid out and now with march's
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inflation data in we now have the six
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months of data we need to extrapolate
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what our next interest rate on ibonds
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will be now i want to stress this is not
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official yet but it looks like the new
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interest rate for i bonds starting may
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1st 2022 will be
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9.62 percent that's right a 100
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risk-free 9.62
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interest amazing right your principal is
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always 100
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safe the only catch is you must hold for
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at least one year and if you sell
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between one and five years you forfeit
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three months interest and this goes for
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all i bonds regardless of when you
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purchased them any i-bonds that you hold
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will receive the 9.62 interest rate for
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six months and if we take a look at this
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chart that was put together by the tips
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watch blog we can see how we got to that
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9.62
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and how that works is we look at the
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monthly percentage change in the
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inflation rate over the past six months
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so from october 2021 through march 2022
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and that six-month change came out to be
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4.81
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which annualized to a full year is our
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nine point six two percent and if you
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doubt that math you can look down below
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on this chart and see what it was for
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the previous six months how we got to
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our current seven point one two percent
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now it's important to note that not
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everyone will see this new 9.62 interest
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rate on their i-bonds beginning may 1st
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that's because depending on when you
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bought your i-bonds you'll still be
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receiving the prior interest rate now
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this is something i really wasn't clear
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enough on in my original video about
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ibons which you can find up here and
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down in the description if you've missed
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it but when you purchase i-bonds you
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receive the current interest rate when
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you purchase them for six months so if i
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buy i-bonds right now in april of 2022
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i'm going to get six months of the
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current seven point one two percent
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interest rate and then i will receive
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six months of the nine point six two
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percent interest rate we all think it is
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going to increase to starting in may now
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what we've been talking about so far is
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the variable interest rate on the i
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bonds but as many of you already know
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there are two interest rate components
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that make up i bonds the variable rate
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which changes with the inflation rate as
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we've been talking about and the fixed
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rate to the ibons the fed has begun to
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raise interest rates to try and combat
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the inflation we're seeing but i don't
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think we're going to see any change in
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the fixed rate of i-bonds anytime soon
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it's been zero for a long time now and
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the fed has really just begun to slowly
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increase interest rates we haven't seen
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that carry over into things like high
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yield savings accounts yet so i wouldn't
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expect to see an eye bonds so don't be
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hung up on the fixed portion of the
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interest rate if you're gonna buy eye
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bonds i think you should do it now get
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in before may 1st if you can and the
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reason for that is because like i
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mentioned earlier you lock in 6 months
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at the current interest rate which is
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7.12
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and then after that you will get six
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months at the 9.62
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interest rate
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that means for your first year holding
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your eye bonds you can lock in a one
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year interest rate of roughly eight and
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a half percent and remember that's eight
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and a half percent on your money with no
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risk and the reason i say you should buy
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eye bonds before the interest rate
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adjusts in may 1st and lock in six
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months at 7.12 percent is because a lot
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of economists are speculating that
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inflation is peaking right now
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that these are the highest inflation
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numbers we're going to see and over the
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next six months to the year they
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gradually or maybe even rapidly start to
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decline will that happen
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who knows but even if the inflation rate
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does move higher and i bonds again
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adjust higher in october of 2022 we're
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still gonna get six months of that rate
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as long as we're holding our eye bonds
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so you don't have to worry about missing
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out on even higher interest rates in the
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future so all you're doing is locking in
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six months at the already record high of
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7.12
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and because we know even though it's not
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official that we're looking at 9.62 for
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the following six months by buying ibons
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now in april of 2022 you can guarantee
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yourself a roughly 8.5 interest rate
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over the next year and i will gladly
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take a known eight and a half percent
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interest rate for the next 12 months
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over waiting till may 1st locking in six
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months at 9.62 percent and then not
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knowing what's going to happen in the
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six months after that so take the rates
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now you're going to get them when they
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change in the future anyways if by
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chance you're waiting to the last minute
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and you haven't filed your 2021 tax
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return yet
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remember if you're getting a refund you
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can use that to buy an extra five
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thousand dollars worth of eye bonds
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above the normal ten thousand dollar
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limit
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so waiting to the last minute may have
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worked out for you if you want to buy
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extra i bonds at these rates let me know
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what you're gonna do are you gonna buy
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eye bonds now in april are you gonna
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wait until may did you already max
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yourself out for the year leave me a
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comment let me know hit the like button
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again down in this video it helps spread
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it to other people who need to know that
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this interest rate is going higher thank
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you as always for watching i appreciate
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you and i will see you in the next video
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