Are you a municipal government, a large business, or a homeowner with perfect credit and plenty of equity? If so, record-low interest rates are your friend. For savers, however, low interest rates are infuriating.
This week, NPR’s All Things Considered profiled a family of six with excellent credit that can’t refinance their home because it’s underwater; meanwhile, their savings account is paying 0.8%–less than the rate of inflation. Host Audie Cornish asked MintLife columnist Matthew Amster-Burton for his advice.
Unfortunately, said Amster-Burton, 0.8% APY is about as good as you’re going to get right now from an online savings account. But there are several other options to consider before putting the kids to work burying cash in the sandbox.
Series I US savings bonds (I-bonds for short) are great for any savings goal one year or more into the future. You can buy them directly from the government at TreasuryDirect.gov and they never pay less than the inflation rate.
Right now, for example, I-bonds pay 2.2%, which is better than most 5-year CDs, but much more flexible.
For Amster-Burton’s other recommendations and his attempt to find a silver lining on a very cloudy day for savers, listen to the NPR radio segment below (iOS and Android users can listen via the free NPR News app):