Wednesday, January 25, 2006

Financial tip o' the day: If you're looking for someplace safe for medium-term savings, you might want to know that I Bonds are paying 6.73% interest until April. No long-term guarantees as to the interest rate is adjusted semi-annually (they pay 1% plus the rate of inflation as calculated by the consumer price index), and furthermore you can't make a withdrawal for the first year, and withdrawals within five years are subject to a two-months-interest penalty. But still, this seems a good place to park some money you don't plan to need immediately (I keep the savings I budget for medical emergencies in I Bonds). And with a $25 minimum investment, one can start small.

Of course, the reason they pay 6.73% is that inflation was up 5.73%. So basically I'll make an extra dollar on my savings, because I have to pay an extra five bucks every time I buy a tank of gas. So I guess I should really hope the interest rate plummets the next time the inflation adjustment is made, as that means my daily commute has become more affordable.

No comments: