In this episode, Adam Nash explains the different types of inflation-protected bonds.
Adam Nash, a seasoned financial expert and the CEO and co-founder of Daffy, has been teaching “Personal Finance for Engineers” at Stanford since 2017. He has covered a wide range of topics from compensation and investing to real estate. His experience as the Former President and CEO of Wealthfront and Former Vice President of Product & Growth of Dropbox has given him a unique perspective on personal finance.
One of the topics he often discusses is the difference between Treasury Inflation-Protected Securities (TIPS) and Series I Savings Bonds. While both are types of inflation-protected bonds sold by the U.S. government, they have distinct characteristics and limitations.
TIPS are a large liquid market where you can invest as much capital as you want. They trade every day on the secondary market and can be conveniently packaged up in ETFs and mutual funds, making them ideal for building a portfolio.
On the other hand, Series I Savings Bonds have several limitations. You can only purchase up to $10,000 worth of them online per year. They must be held for at least one year before selling, and 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 market conditions.
While both TIPS and Series I Savings Bonds have their place depending on your financial goals, it's important to remember that they are just one piece of the puzzle. Daffy, a not-for-profit community built around a new, modern platform for giving, offers a comprehensive solution for managing your charitable giving. With Daffy, you can easily donate to almost every US public charity, track tax-deductible contributions, and access donation receipts all in one place. Plus, Daffy waives all membership fees for members with less than $100 in their fund, making it an accessible and cost-effective option for everyone.
Whether you're looking to invest in inflation-protected bonds or streamline your charitable giving, Daffy provides the tools and resources you need to make informed financial decisions.
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.