Money Rehab with Nicole Lapin - I Bonds: The Gift That's Always the Right Size

Episode Date: September 6, 2022

The perfect gift doesn't exi....

Money rehabbers, you get it. When you're trying to have it all, you end up doing a lot of juggling. You have to balance your work, your friends, and everything in between. So when it comes to your finances, the last thing you need is more juggling. That's where Bank of America steps in. With Bank of America, you can manage your banking, borrowing, and even investing all in one place. Their digital tools bring everything together under one roof, giving you a clear view of your finances whenever you need it. Plus, with Bank of America's wealth of expert guidance available at any time, you can feel confident that your

money is working as hard as you do. So why overcomplicate your money? Keep it simple with Bank of America, your one-stop shop for everything you need today and the goals you're working toward tomorrow. To get started, visit bofa.com slash newprosmedia. That's b-o-f-a dot com slash n-e-w pros p-r-o-s media. bfa.com slash newprosmedia. Hey guys, are you ready for some money rehab? Wall Street has been completely upended by an unlikely player, GameStop. And should I have a 401k? You don't do it? No, I never do it. You think the whole world revolves around you and your money.

Well, it doesn't. Charge for wasting our time. I will take a check. Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin. Recently, I have been waxing poetic on the value of series I-bonds.

In episode 348, How to Make Money in a Recession, I tell you why I-bonds are such an excellent investment right now. If you didn't listen to that episode, I'll give you some of the spark notes. The series I Bond is the MVP of all bonds right now. Right now for I Bonds, the semi-annual rate based on inflation is 4.81%. So annualized, you will get a composite rate of 9.62%. That is an amazing ROI, my money rehab friends. That ROI is so high right now because the interest rate is based on inflation. That's what I stands for. So investing in I-bonds will help your money keep pace with inflation. If you want to hear the whole episode, of course, I've linked that in the show notes. But even if you didn't listen to that first episode,

you get the idea. It's an awesome investment. But there is a limit. You cannot buy more than $10,000 in I-bonds per year. However, you can give the gift that keeps on giving and buy an I-bond as a present for a loved one, even if you've already hit the maximum $10,000 in I-bonds for yourself. The Financial Buff has a great article on this that I have also linked in the show notes, but here's everything you need to know. There are two stages of gifting I-bonds, buying and delivering. You can buy an I-bond gift at treasurydirect.gov, and in order to buy a bond for someone else on the site, you need their social security number.

So this gift can't be a casual gift that you give someone you matched with on Tinder two days ago. You need to be tight enough that exchanging social security numbers isn't sketchy. Once you buy the bond, it will go into a virtual gift box. And once that purchase is in the gift box, you can't touch it. So there's no changing your mind in deciding that, no, you that I-bond applied to your own Treasury Direct account. Nope. Once it's in the gift box, it's got the recipient's name on it, literally. Next step is delivering the I-bond. After you buy the bond, it will take around five days for processing for that gift amount to be debited from your bank. After that,

you can give the I-bond to your lucky, lucky recipient at any time. There is no expiration date or deadline. But when it does come time to give your I-bond, you'll need the recipient's Treasury Direct account number. And fun fact, because buying and delivering are two separate steps, you can actually buy the gift before someone has made a Treasury Direct account. So if you're giving an I-bond as a graduation gift, for example, you don't need to spoil the surprise and ask them to create an account before buying them the bond. Once you send the bond, that's it. The recipient has the I-bond in their Treasury Direct account, and boom, best gift ever. And here's another fun fact. Even though there's a limit to how much

money you can spend on I-bonds for yourself, there is no limit on the amount of gifts you can send to others. So you can buy $10,000 in I-bonds for 10,000 people. Go crazy. But here's the thing. If you do have more than $10,000 to invest, and if you do, good for you, you're killing it. You can't get someone to buy an I-bond on your behalf in the same year if you've maxed yours out. So if you're thinking, wait a minute, this is a perfect loophole. If I want to buy $11,000 in I-bonds, I could just buy $10,000 in series I-bonds for myself and then ask a friend to gift me $1,000 I-bond and I'll just Venmo them for the $1,000 reimbursement? Not exactly. It doesn't completely work that way.

If you're gifted an iBond, that gift amount counts toward your annual maximum for the year. But there is no restriction on something like that from happening in another year. There's no stopping you and your friend from gifting each other the same amount. And then whammo, you figured out an awesome way to get more exposure than $10,000 to series I-bonds. Call it whatever you want. A hack, a loophole, or just the gift that keeps giving. For today's tip, you can take straight to the bank. If you haven't given yourself the gift of an I-bond just yet, Do it. It is one of the best investments you can

make right now, and you can start with just $25. So there's no excuse. Head over to treasurydirect.gov today. Money Rehab is a production of iHeartRadio. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Mike Coscarelli. Executive producers are Nikki Etor and Will Pearson. Our mascots are Penny and Mimsy. Huge thanks to OG Money Rehab team Michelle Lanz for her development work, Catherine Law for her production and writing magic, and Brandon Dickert for his editing, engineering, and sound design. And as always, thanks to you for finally investing in yourself

so that you can get it together and get it all.