Hacker News Reader

Comment by 999900000999 | Hacker News Reader

Any real risk in dumping 10k in these and forgetting about it for a decade.

Have these ever lost money ?

7% yield is outrageously good assuming you can't lose money. Then again US currency might be worthless if they default on these.

View on HN

The only risk is losing out on greater gains from investing in a higher yield asset. Keep in mind that the yield on these will probably drop in 6 months, since the dividend is adjusted semiannually. If inflation keeps going the dividend will stay high, but other assets will also appreciate due to inflation.

Currently I'm maxing out my 401k, this seems like a good plan once I hit the 20k annual max.

I have TreasuryDirect set up to purchase $X in I-bonds quarterly. It's been set and forget. I consider them the "medium term" component of my emergency fund, rather than an investment I expect significant yield from. They generally perform better than CDs, worse than corporate bonds, and are inflation protected. They're not too bad tax-wise either. The interest is subject to Federal income tax but not state or local tax. All of the above have their place in a well-diversified savings strategy.

The 7% is adjusted every six months to match inflation. The real inflation-adjusted yield on these is 0.0%. It’s better than cash, but has some short term redemption restrictions.

No risk other than situations in which there will be much bigger problems. They can't lose money.

The bonds can go down in value lol

EDIT: Never mind, these are savings bonds and can't be traded

Because the fixed rate is based on treasurys and the inflation rate is based on inflation, they're essentially locked-in at zero truly real return. Which is not a bad 'floor' position for your portfolio!

Reply on news.ycombinator.com