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High quality munis seem to be doing better than taxable bonds even before the tax advantage. FLTMX, FTABX…
0.5% at an online savings account. 0% at your bank. A few bps in short-term treasuries. I recently wrote on Series I bonds offering a current yield of 3.5%, but there are strings attached. Series EE bonds offer a safe 3.5% CAGR for 20 years, which beats the pants off a 20-year Treasury bond yield right now (but again, there are limits and terms to know).
Over a long enough time frame, owning an aggregate bond fund will be a fairly low risk. I wouldn’t describe it as ‘safe’, but even if rates rise, the holdings in the portfolio will include higher-yielding assets as low-yielding assets mature. So there is some safety in that.
The yields on savings bonds are certainly tempting, but these bonds are relatively illiquid. You can’t redeem a savings bond during the 12-months following a purchase, and you will sacrifice three months interest earnings if you redeem before five years.
With the threat of rising inflation, I would have concerns about buying Series EE bonds right now.
By definition, the available safe yields are pretty low. FDIC accounts, treasuries, TIPS, CDs, are all pretty low. Short term bonds are a little better. I’ve put some money in a few BDCs with high yield, but only because I have some personal knowledge of the quality of the company.