PODCAST: Changes Coming to Flood Insurance with Laura Lightbody
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Links and sources mentioned in this episode:
- When Savings Bonds Make Sense
- What Grandparents Need to Know About Using Savings Bonds for a Grandchild’s Education
- Flood Insurance May Cost You More
- How to Protect Your Home from Natural Disasters with the Right Insurance
- FEMA Flood Maps
Transcript:
David Muhlbaum: Flood insurance. Maybe you have it, maybe you don’t. Maybe you thought you didn’t need it, but mother nature told you otherwise this year. The National Flood Insurance Program is in for a revamp, so we brought on an expert guest to help explain what that means to people already covered or in the market for a policy. Also, a bond that pays over 7%? Yeah, there’s a catch. All coming up in this episode of Your Money’s Worth. Stick around.
David Muhlbaum: Welcome to Your Money’s Worth. I’m kiplinger.com Senior Online Editor David Muhlbaum, joined by my co-host, Senior Editor Sandy Block. How are you doing Sandy?
Sandy Block: I’m great. I understand you want to talk about bonds? Bonds, just bonds.
David Muhlbaum: Bonds. I want to talk a little bit about bonds. In part, because in the near future, possibly our next episode, we’re going to have on Mr. Fixed Income himself, Jeffrey Kosnett, the editor of Kiplinger’s Investing for Income newsletter. And so we’re going to be going deep into rates and all that, but this is just a taste, but it’s one with a pretty eye-popping number. So let’s start there and then you can give me all the yeah-buts. You say you’ve got an investment opportunity for me that’s paying 7.12% and as safe as a US Treasury bill?
Sandy Block: Yes, siree! I know that’s a big number, and it’s as safe as a Treasury because it is a Treasury. This product is a United States Savings Bond Series I.
David Muhlbaum: I, like Igor?
Sandy Block: Igor like the letter before J.
David Muhlbaum: Okay. And it’s 7.12%. Well, savings accounts and even five-year CDs are paying a quarter percent. I mean, the 10-year Treasury that everyone’s been getting so wound up about, it’s yielding 1.58% or so. So, what gives?
Sandy Block: Well, yeah, and I guess the question is why isn’t everyone running out and buying I Bonds right now? Well, there are several pretty big caveats. For one thing, the 7.12% is for I Bonds bought between November and May. At that point, the rate will be adjusted again.
David Muhlbaum: Okay, well, you still have time.
You still... Okay. But here’s another big caveat. The I Bond consists of two components, an inflation-adjusted component and a fixed rate. And the fixed rate is zero, so if the inflation goes down next year, as many people expect, you are not going to
