Personal Investments • Series I bonds vs. conventional if inflation is low or normal

Are series I bonds the superior long-term option in taxable - compared to conventional bonds - as long as the I bonds have some level of fixed rate - ?

And/or, what if inflation goes back to 1-2% and if there is no fixed rate on the I bond batches - ?

Context:
I am considering additional fixed income in my taxable space. I can provide more details there if pertinent.

I am aware of most rules for the I bonds - e.g., 1 year lockup, 5 years of having a 3 month interest penalty for early withdrawal.

I am deciding between opening up revocable trusts to buy more I bonds or sticking to the annual allotment and buying conventional bonds in taxable. I would probably use an investment grade national municipal bond fund / ETF based on my after-tax math. I already hold a reasonable amount of US Treasury ETFs for added “safety” / liquidity, etc.

I may need to - though I hope I will not - tap these funds as they are “backup” funds (more like an emergency fund but not something I plan to keep super liquid / without worrying about returns over time). Otherwise: the holding period is “indefinite”.

Statistics: Posted by BuyAndHoldOn — Fri Sep 27, 2024 2:54 pm — Replies 2 — Views 261

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