Over the past several months, stock prices on U.S. exchanges have been moving sideways, gold and other commodities have gotten hammered, and the U.S. housing bubble has been punctured. So where are investors going for solid returns and low risk? Many are buying CDs (that’s certificates of deposits), while others are purchasing money market funds. Let me suggest another alternative that is equally safe, but with higher returns—I-Bonds from the U.S. Treasury. (The "I" denotes that the bond rate is inflation adjusted. The base rate is less than three percent, but a 3.5 percent inflation adjustment is currently being applied).
Currently these bonds are paying 6.78 percent with no risk. Furthermore, you do not have to pay taxes on the interest until you sell the bond. There are two negatives: 1) you can only purchase $35,000 per year and 2) the returns will be adjusted downward when inflation rates once again move lower. But in the mean time, purchase these bonds with maximum safety, deferred taxes, and some of the highest returns available.
To buy on-line, go to the following site:
http://www.savingsbonds.gov/
EPG
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