Tax-Savings Tips: September 2022
Tax-Saving Tips September 2022 Earn 9.62 Percent Tax-Deferred Interest with Series I Bonds Inflation is seldom a good thing. But when it comes to investing, the U.S. Treasury Department has an inflation opportunity that’s downright amazing. You can buy bonds that pay 9.62 percent interest—tax-deferred—with no downside risk, and with no state or local income taxes when you cash them in. If you buy now, you earn that 9.62 percent for six months, guaranteed. At the end of six months, the Treasury Department · adds the interest you earned to your principal, and · pays interest on your new principal balance at the new rate it will determine this year, on November 1. Example. You buy $10,000 of Series I bonds on September 24. You earn 9.62 percent for six months for a total of $481 ($10,000 x 9.62 percent ÷ 2). On March 24, your principal balance is $10,481 ($10,000 + 481). Let’s say Treasury sets the November 1 interest rate at