The Treasury sells savings bonds that are at 7.12% right now. It's not the same thing as a savings account and you can't put a million dollars in, but you can still get a good interest rate on smaller amounts.
US Treasury bonds are currently yielding more than 2.5% and are generally considered pretty safe. And even though a bank account is a terrible place to stash so much money, I think you'd find a better than average interest rate if you did have $2 million to stick in the bank.
Take a look at U.S. Treasury's Series I bonds [0][1]. You can buy up to $10K/social security number/year + extra $5K (if you use your tax refund to buy it). The interest rate is based on the inflation and is currently at 6.89%.
US Treasury Series I Savings bonds are currently paying 4.6% per year (their rate rises with inflation), income is tax exempt until redeemed, and can be redeemed at any time after 1 year.
I think you'd be better off going to the nearest bank with your $1,000 and buying an I bond. It's not a popular thing to do (only grandmas seem to like these things), but it's a pretty much slam dunk investment with zero risk.
Treasury bills are a great option. A 3 month treasury pays over 5% and they are exempt from state income tax. There is not meaningful interest rate risk in a bond that matures in a few months, but you can still sell before maturity if you need the money. So in almost any scenario you can come up with, it’s better than the savings account.
The yield curve is inverted so short term treasuries are great right now. There’s little reason to have a typical savings or money market account or even a money market / bill fund when you can just put together a 3 month treasury ladder and get 5.25+%.
Longer term treasury bonds don’t seem so smart given the threat of sustained inflation. If you’re looking for longer term fixed income, maybe TIPS or Series I bonds are a good choice. I bond rates aren’t as great as they were a few years ago, but until end of this month you can take advantage of 5.27%, including a fixed rate component of 1.30% which is a 17 year high. You‘ve got a bond that will beat inflation by 1+% for 30 years. Not too bad.
If you're a US citizen, "I Series Savings Bonds" are fantastic emergency fund vehicles. You can cash them out instantly after holding them only one year, mine are paying just under 2% right now.
For quite a long time now money has been cheap and there has been a lack of investments with good returns; i.e. you could get very safe investments at 1% return or less. 7% is a relatively huge yield for safe bonds (the standard US treasury 12month security rate seems to be 0.12% now, much lower), so it seems a bit surprising.
Not exactly what you're looking for, but in the US I series bonds are currently paying >7%. The biggest downside is you have to hold them for a year. The other issue is you're limited to buying $10k in a calendar year.
Nothing other than the fixed yield on savings bonds has been lousy for the last 15-20 years.
It’s backed by the full faith and credit of the US government and interest isn’t taxed until redemption, so it’s probably the safest/simplest investment for a retail saver that’s out there.
It's a steady and safe stream of income, and the bonds themselves would be rated as safe enough. After that it's all about the interest rate, and in today's market those are really low.
Not all government bonds are worthless against inflation!
You can purchase up to $10k in Series I bonds every year that carry a fixed rate (currently 0) + a variable rate set by inflation (CPI) that is adjusted semi-annually. I bonds purchased right now are yielding 3.5% (due to recent CPI data) for the next 6 months. They are an excellent place to park some cash/emergency fund with some caveats (no redemption for 12 months, lose 3 months of interest if you redeem before holding for 5 years)
Unless you're literally buying government bonds (that are yielding very low and sometimes negative returns) your savings will still translate to increased spending elsewhere.
You can buy very safe investments like treasury bonds. Of course they won't give you the 8% risk-free returns you're looking for, but that's the point, nothing will.
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