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What is the difference between TIPs and Series I Bonds?

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GiveIn this episode, Adam Nash delves deeper into the types of inflation-protected bonds, namely Treasury Inflation-Protected Securities (TIPS) and Series I Savings Bonds. As the CEO and co-founder of Daffy, a not-for-profit community built around a new, modern platform for giving, Adam Nash brings a wealth of knowledge and experience in personal finance. His teachings at Stanford and his leadership roles at Wealthfront and Dropbox have equipped him with a deep understanding of investing and financial growth. TIPS and Series I Savings Bonds are both types of inflation-protected bonds sold by the U.S. government. However, they have distinct differences that can impact your investment strategy. TIPS are a large liquid market, trading every day on the secondary market. They are convenient for building a portfolio as they can be bought individually from the government or packaged up in ETFs and mutual funds. On the other hand, Series I Savings Bonds are part of the Savings Bond Program and come with certain limitations. You can only buy up to $10,000 worth of them online a year, and they must be held for at least one year before selling. Selling them before five years incurs an interest rate penalty. Despite these limitations, Series I Savings Bonds are a good deal because you cannot lose capital investing in them. The government guarantees your principal back, unlike TIPS which can fluctuate with interest rates and the markets. Whether you choose TIPS or Series I Savings Bonds depends on your financial goals and risk tolerance. If you're looking to build a portfolio, TIPS might be a better choice. If you're looking to stash away some money for the long term that is saved from inflation, Series I Savings Bonds could be the way to go. While investing is an important part of financial growth, giving back is equally important. Daffy, the Donor Advised Fund for You™, simplifies your giving process. With Daffy, you can easily donate to almost every US public charity, track tax-deductible contributions, and access donation receipts all in one place. Daffy waives all membership fees for members with less than $100 in their fund, making it an accessible and affordable option for everyone. So why not start your giving journey with Daffy today?

Please note that the information contained on this page is for educational purposes only and should not be considered tax advice. Any calculations are intended to be illustrative and do not reflect all of the potential complexities of individual tax returns. To assess your specific tax situation, please consult with a tax professional.

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