2021 I Bonds: what's your plan?

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chet96
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Re: 2021 I Bonds: what's your plan?

Post by chet96 »

Somewhat confused and would like to confirm my understanding.

If you buy in late October 2021, you receive the May 2021 rate (~3%) until April 2022, and the the Nov 2021 (~7%) rate until Oct 2022?

Thanks - this sounds almost too good to be true.
BrokerageZelda
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Re: 2021 I Bonds: what's your plan?

Post by BrokerageZelda »

chet96 wrote: Thu Oct 14, 2021 12:56 pm Somewhat confused and would like to confirm my understanding.

If you buy in late October 2021, you receive the May 2021 rate (~3%) until April 2022, and the the Nov 2021 (~7%) rate until Oct 2022?

Thanks - this sounds almost too good to be true.
That's correct.

It's really good for what it is. It's not going to be good for people who don't want "what it is", but that's a separate question.
ModifiedDuration
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Re: 2021 I Bonds: what's your plan?

Post by ModifiedDuration »

chet96 wrote: Thu Oct 14, 2021 12:56 pm Somewhat confused and would like to confirm my understanding.

If you buy in late October 2021, you receive the May 2021 rate (~3%) until April 2022, and the the Nov 2021 (~7%) rate until Oct 2022?

Thanks - this sounds almost too good to be true.
You are correct!

If you purchase in late October, you would receive an annual rate of 3.54% from October 1 through March 31 and then an annual rate of 7.12% from April 1 through September 30.
oldlongbeard
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Re: 2021 I Bonds: what's your plan?

Post by oldlongbeard »

i am in.... looks like a great place to hold "Cash" while we save up to pay off the Mortgage (...or don't, if these rates stay up!!!!)
Things you learn when perusing this site!

Cheers
opus360
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Re: 2021 I Bonds: what's your plan?

Post by opus360 »

What do you think is the better choice here?

1) Buy end of October and get 3.54% for 6 months, then 7.12% for the next 6 months.

OR

2) Buy end of November and get 7.12% for 6 months sooner.


I intend to hold it as long as it pays higher than my mortgage cost of 3%.
oldlongbeard
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Re: 2021 I Bonds: what's your plan?

Post by oldlongbeard »

opus360 wrote: Fri Oct 15, 2021 2:54 pm What do you think is the better choice here?

1) Buy end of October and get 3.54% for 6 months, then 7.12% for the next 6 months.

OR

2) Buy end of November and get 7.12% for 6 months sooner.


I intend to hold it as long as it pays higher than my mortgage cost of 3%.


Unless you figure this inflation will continue over the current pace, I think now is the time.Did mine today, will do my bride's next week.....Crazy times!
MrJedi
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Re: 2021 I Bonds: what's your plan?

Post by MrJedi »

opus360 wrote: Fri Oct 15, 2021 2:54 pm What do you think is the better choice here?

1) Buy end of October and get 3.54% for 6 months, then 7.12% for the next 6 months.

OR

2) Buy end of November and get 7.12% for 6 months sooner.


I intend to hold it as long as it pays higher than my mortgage cost of 3%.
You get the 7.12 either way, why not take the 3.54 as well if it meets your 3% threshold?
Jags4186
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Re: 2021 I Bonds: what's your plan?

Post by Jags4186 »

We bought $20k yesterday and will buy $20k more in January. It’ll drain our cash reserves but I have like 4 0% CC promos running right now for 12 months or so, so I think we’ll be okay.
azanon
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Re: 2021 I Bonds: what's your plan?

Post by azanon »

Do we know the fixed rate for I bonds will be 0% again or is there a chance it will go up too?
BrokerageZelda
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Re: 2021 I Bonds: what's your plan?

Post by BrokerageZelda »

azanon wrote: Fri Oct 15, 2021 3:32 pm Do we know the fixed rate for I bonds will be 0% again or is there a chance it will go up too?
We do not know for sure. However, with the analogous TIPS rate well below zero, I believe most close I Bond watchers would be shocked if it went up from 0% in November.

And then they would buy the $10k/account in January that they were already planning to buy anyway.
MikeZ
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Re: 2021 I Bonds: what's your plan?

Post by MikeZ »

My DW is a self employed sole proprietor with an EIN. Is that the opportunity to buy another $10k a year and just involves settung another TD account?
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Re: 2021 I Bonds: what's your plan?

Post by Grt2bOutdoors »

MikeZ wrote: Mon Oct 18, 2021 7:21 pm My DW is a self employed sole proprietor with an EIN. Is that the opportunity to buy another $10k a year and just involves settung another TD account?
Will you title the name of the proprietorship on the bond?
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anon_investor
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Re: 2021 I Bonds: what's your plan?

Post by anon_investor »

azanon wrote: Fri Oct 15, 2021 3:32 pm Do we know the fixed rate for I bonds will be 0% again or is there a chance it will go up too?
I think Tipswatcher mentioned that the fixed rate is closely tied to the real rate for TIPS, which is currently negative, so it is very likely the fixed rate will remain 0%.
stay_the_course
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Re: 2021 I Bonds: what's your plan?

Post by stay_the_course »

Sigh, it's been nearly 2 weeks since I sent in my form 5444 and still my account is not unlocked... am I going to miss out on the 3.54% because of some unnecessary government bureaucracy? :annoyed :annoyed
000
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Re: 2021 I Bonds: what's your plan?

Post by 000 »

I'm thinking it may finally be time for me to buy I bonds.
Ed 2
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Re: 2021 I Bonds: what's your plan?

Post by Ed 2 »

000 wrote: Mon Oct 18, 2021 8:40 pm I'm thinking it may finally be time for me to buy I bonds.
That is the sign for me the beginning of new bull market. ;)
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel
000
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Re: 2021 I Bonds: what's your plan?

Post by 000 »

Ed 2 wrote: Mon Oct 18, 2021 8:43 pm
000 wrote: Mon Oct 18, 2021 8:40 pm I'm thinking it may finally be time for me to buy I bonds.
That is the sign for me the beginning of new bull market. ;)
I bond purchase has been cancelled for now. :twisted:
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Mel Lindauer
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Re: 2021 I Bonds: what's your plan?

Post by Mel Lindauer »

Darth Xanadu wrote: Wed Oct 13, 2021 10:54 pm
anon_investor wrote: Wed Oct 13, 2021 10:39 pm
Darth Xanadu wrote: Wed Oct 13, 2021 10:36 pm
anon_investor wrote: Fri Oct 08, 2021 11:58 pm
Mel Lindauer wrote: Fri Oct 08, 2021 11:52 pm

Buy the max now and if you still have money, buy again in Jan. 2022.
+1. I am not sure what people are waiting for. Risk free 3.54% isn't available any where on earth, maybe the universe! There is 99.99% chance the fixed rate will be 0% again.
I'm not so sure, interest rates behave very oddly on the space-time continuum.
Sure, in what universe is a risk free 7.12% for 6 months available?
I wish I knew! But there are theories...

FWIW and more on-topic, I purchased my 2021 full allocation (for myself, my spouse does not buy this product) last month, partly based on tipswatcher's recommendations and my own anticipated cash flow needs. I now have about half of my desired emergency fund in I-Bonds, earning an average rate of 3.8% this month, shooting up to 7.4% rate in april of 2022 based on my various purchase dates.

As I've mentioned in other posts, I expect my goals for these funds to evolve over time:

Right Now: Emergency Fund
15 years from Now: Tax-Free Education for kids if I am under the income limit
Shortly Thereafter: Help bridge the gap between retirement and claiming Social Security
Don't forget that if you find yourself approaching the income limits for the tax-free educational benefit, you can always redeem the bonds while you still qualify and put the entire proceeds into a 529 Plan, which is a qualifying educational expense. So you don't have to wait until your kids are in college to qualify.
Best Regards - Mel | | Semper Fi
RUsure
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Re: 2021 I Bonds: what's your plan?

Post by RUsure »

stay_the_course wrote: Mon Oct 18, 2021 8:34 pm Sigh, it's been nearly 2 weeks since I sent in my form 5444 and still my account is not unlocked... am I going to miss out on the 3.54% because of some unnecessary government bureaucracy? :annoyed :annoyed
Thank you for posting or I would have thought something was wrong with my submission! It has been three weeks and counting since they received my completed form (for an entity account) with stamped Medallion guarantee. I sent an email to TreasuryDirect to check on the status and although I got a reply in short order, it was just a general answer, saying it takes "a couple weeks." I am sure they are overwhelmed with unexpected demand, but their process seems...unwieldy. Anyway, I guess as long as I can buy in 2021 it doesn't really matter since I expect to be a long-term holder.

Thanks to what I have learned here from Bogleheads I have been buying I bonds for several years, but this thread taught me things I didn't know!
stay_the_course
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Re: 2021 I Bonds: what's your plan?

Post by stay_the_course »

RUsure wrote: Tue Oct 19, 2021 3:18 pm
stay_the_course wrote: Mon Oct 18, 2021 8:34 pm Sigh, it's been nearly 2 weeks since I sent in my form 5444 and still my account is not unlocked... am I going to miss out on the 3.54% because of some unnecessary government bureaucracy? :annoyed :annoyed
Thank you for posting or I would have thought something was wrong with my submission! It has been three weeks and counting since they received my completed form (for an entity account) with stamped Medallion guarantee. I sent an email to TreasuryDirect to check on the status and although I got a reply in short order, it was just a general answer, saying it takes "a couple weeks." I am sure they are overwhelmed with unexpected demand, but their process seems...unwieldy. Anyway, I guess as long as I can buy in 2021 it doesn't really matter since I expect to be a long-term holder.

Thanks to what I have learned here from Bogleheads I have been buying I bonds for several years, but this thread taught me things I didn't know!
Well what do you know, yesterday I sent an email to TD asking when the hold might be lifted and today the hold was lifted :greedy
50/50
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Re: 2021 I Bonds: what's your plan?

Post by 50/50 »

stay_the_course wrote: Tue Oct 19, 2021 6:29 pm
RUsure wrote: Tue Oct 19, 2021 3:18 pm
stay_the_course wrote: Mon Oct 18, 2021 8:34 pm Sigh, it's been nearly 2 weeks since I sent in my form 5444 and still my account is not unlocked... am I going to miss out on the 3.54% because of some unnecessary government bureaucracy? :annoyed :annoyed
Thank you for posting or I would have thought something was wrong with my submission! It has been three weeks and counting since they received my completed form (for an entity account) with stamped Medallion guarantee. I sent an email to TreasuryDirect to check on the status and although I got a reply in short order, it was just a general answer, saying it takes "a couple weeks." I am sure they are overwhelmed with unexpected demand, but their process seems...unwieldy. Anyway, I guess as long as I can buy in 2021 it doesn't really matter since I expect to be a long-term holder.

Thanks to what I have learned here from Bogleheads I have been buying I bonds for several years, but this thread taught me things I didn't know!
Well what do you know, yesterday I sent an email to TD asking when the hold might be lifted and today the hold was lifted :greedy
Thank you for your reply. My 5444 case was opened more than two weeks ago. Your post gives me hope.
Thou shalt take no risks that thou needest not take. Seek wisdom not knowledge. Knowledge is of the past; wisdom is of the future.
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tarnation
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Re: 2021 I Bonds: what's your plan?

Post by tarnation »

So I got some paper I bonds with refund money (we filed for extension). I requested the registration as <my son> OR <my wife> , but the last four of the social on them is mine. Previously, when I bought paper back in 12/2011 the last four was his social ( but that was back when you could just buy paper directly). Anyone know if this is going to be a problem? Didn't mean to hijack, just thought all the I bond big-brains are in here.
Image
BrokerageZelda
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Re: 2021 I Bonds: what's your plan?

Post by BrokerageZelda »

tarnation wrote: Mon Oct 25, 2021 9:51 pm So I got some paper I bonds with refund money (we filed for extension). I requested the registration as <my son> OR <my wife> , but the last four of the social on them is mine. Previously, when I bought paper back in 12/2011 the last four was his social ( but that was back when you could just buy paper directly). Anyone know if this is going to be a problem? Didn't mean to hijack, just thought all the I bond big-brains are in here.
The SSN on a paper bond is for purchase tracking only; the name(s) on the printed registration are what define ownership.

https://www.treasurydirect.gov/indiv/re ... s_ifaq.htm
If you're buying an I bond for a gift and you don't have the Social Security Number of the person you're buying the bond for, simply use your number. Even though your number will be printed on the bond, you'll incur no tax liability, and it won't count towards your annual purchase limit. The Social Security Number is used for tracking purposes only, such as in cases where the savings bond is lost, stolen, or destroyed.
MikeZ
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Re: 2021 I Bonds: what's your plan?

Post by MikeZ »

Question:

My DW tried to create a TD account but it went to medallion signature requirement. I have a working TD account. Is there a way for me to buy them under my account for the "Add New Registration" button for her with her SSN? I already bought $10k in I bonds for me.
SnowBog
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Re: 2021 I Bonds: what's your plan?

Post by SnowBog »

MikeZ wrote: Fri Nov 19, 2021 7:36 pm Question:

My DW tried to create a TD account but it went to medallion signature requirement. I have a working TD account. Is there a way for me to buy them under my account for the "Add New Registration" button for her with her SSN? I already bought $10k in I bonds for me.
Ultimately, she'll need her own account...

But you could buy them as a "gift", which can be "delivered" to her account (once established). But it will need to be established or she won't be able to redeem them. But you'd have 30 years to get the account created (or by whenever you wanted to redeem them). https://www.treasurydirect.gov/indiv/re ... q.htm#gift
MikeZ
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Re: 2021 I Bonds: what's your plan?

Post by MikeZ »

SnowBog wrote: Fri Nov 19, 2021 7:44 pm
MikeZ wrote: Fri Nov 19, 2021 7:36 pm Question:

My DW tried to create a TD account but it went to medallion signature requirement. I have a working TD account. Is there a way for me to buy them under my account for the "Add New Registration" button for her with her SSN? I already bought $10k in I bonds for me.
Ultimately, she'll need her own account...

But you could buy them as a "gift", which can be "delivered" to her account (once established). But it will need to be established or she won't be able to redeem them. But you'd have 30 years to get the account created (or by whenever you wanted to redeem them). https://www.treasurydirect.gov/indiv/re ... q.htm#gift
Thanks,

I bought them as a gif for her. They are showing in my gift box on TD.

Question: is there any sort of a rush to get the medallion guarantee and me to transfer them to her account? E.g. would just keeping them in my gift box and not transferring them impact the interesth earned or redemption timeline?
SnowBog
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Re: 2021 I Bonds: what's your plan?

Post by SnowBog »

MikeZ wrote: Sun Dec 05, 2021 9:58 pm
SnowBog wrote: Fri Nov 19, 2021 7:44 pm
MikeZ wrote: Fri Nov 19, 2021 7:36 pm Question:

My DW tried to create a TD account but it went to medallion signature requirement. I have a working TD account. Is there a way for me to buy them under my account for the "Add New Registration" button for her with her SSN? I already bought $10k in I bonds for me.
Ultimately, she'll need her own account...

But you could buy them as a "gift", which can be "delivered" to her account (once established). But it will need to be established or she won't be able to redeem them. But you'd have 30 years to get the account created (or by whenever you wanted to redeem them). https://www.treasurydirect.gov/indiv/re ... q.htm#gift
Thanks,

I bought them as a gif for her. They are showing in my gift box on TD.

Question: is there any sort of a rush to get the medallion guarantee and me to transfer them to her account? E.g. would just keeping them in my gift box and not transferring them impact the interesth earned or redemption timeline?
No - but maybe...

As I understand it - interest will accrue as though she owned them now, and they can be redeemed in 12 months from when you bought them (assuming they've been "delivered" by then). Those don't change...

What might matter to you is the $10k/year/person limit. That limit applies to "purchase" and/or "receive as gift".

So, if you only plan to purchase $10k for spouse - then no big deal - you are already there (just need an account before she can redeem).

But if you plan to buy another $10k for spouse, then you'll want to get account and "deliver" them to her. If you do so yet this year, then she can buy (or you can gift her) another $10k next year. But if you don't open the account until next year, she's effectively lost using this year's purchase amount limit. This can also indirectly impact the "lock-up"/"redemption" timeline. For example, let's say she gets her account setup in April and buys $10k - which can't be redeemed until April 2023 (1 year later). Since she can't "buy" and "receive" more than $10k in one year - your "gift" is effectively stuck in your gift box until 2023 - which is well after the original 1-year period has expired. (The obvious "fix" to this would be deliver the gift first - and then purchase later...)
lightnoise
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Re: 2021 I Bonds: what's your plan?

Post by lightnoise »

Ed 2 wrote: Mon Oct 18, 2021 8:43 pm
000 wrote: Mon Oct 18, 2021 8:40 pm I'm thinking it may finally be time for me to buy I bonds.
That is the sign for me the beginning of new bull market. ;)
Please help me understand this. I opened my TD account a few days ago on December 3 and bought $10k worth of ibonds. So for months of December 2021 thru April 2022, they would accrue November 2021 rate and then from May 2022 accrue whatever the new rate is at that time? Is that correct?

Can I also buy additional 10k in January or do I have to wait until May 2022?

Thank you.
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Re: 2021 I Bonds: what's your plan?

Post by z3r0c00l »

lightnoise wrote: Mon Dec 06, 2021 6:39 am
Ed 2 wrote: Mon Oct 18, 2021 8:43 pm
000 wrote: Mon Oct 18, 2021 8:40 pm I'm thinking it may finally be time for me to buy I bonds.
That is the sign for me the beginning of new bull market. ;)
Please help me understand this. I opened my TD account a few days ago on December 3 and bought $10k worth of ibonds. So for months of December 2021 thru April 2022, they would accrue November 2021 rate and then from May 2022 accrue whatever the new rate is at that time? Is that correct?

Can I also buy additional 10k in January or do I have to wait until May 2022?

Thank you.
The new rate takes effect June 1st for bonds sold in December. You can buy another $10,000 on January 1st if you wanted to! However since you only have to buy before the end of January to get credit for the whole month, I recommend waiting until the 20th and keeping the money somewhere to earn interest. Some will roll their eyes and remind us that is only $4, or maybe $15 in a bond fund, but I would rather get a little money than nothing for equal effort.
70% Global Stocks / 30% Bonds
BV3273
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Re: 2021 I Bonds: what's your plan?

Post by BV3273 »

Started shifting some of my emergency fund money from a savings account to iBonds this year. First purchase was in January as a test. I wanted to see if the TD website was as bad as everyone says on here before I fully committed. Personally I’ve dealt with far worse websites. Also, I find the argument/debate that it’s “another website/account” to deal with quite comical. Everyone on here seems to have several accounts in the form of brokerages, banks, and money management apps - I’m guilty of this as well - one more account isn’t a big deal to me.

I like the product and will continue to buy until my whole emergency fund is converted over. I’ll probably keep a few months in cash in a brick & motor just in case.
MikeZ
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Re: 2021 I Bonds: what's your plan?

Post by MikeZ »

SnowBog wrote: Sun Dec 05, 2021 10:31 pm
MikeZ wrote: Sun Dec 05, 2021 9:58 pm
SnowBog wrote: Fri Nov 19, 2021 7:44 pm
MikeZ wrote: Fri Nov 19, 2021 7:36 pm Question:

My DW tried to create a TD account but it went to medallion signature requirement. I have a working TD account. Is there a way for me to buy them under my account for the "Add New Registration" button for her with her SSN? I already bought $10k in I bonds for me.
Ultimately, she'll need her own account...

But you could buy them as a "gift", which can be "delivered" to her account (once established). But it will need to be established or she won't be able to redeem them. But you'd have 30 years to get the account created (or by whenever you wanted to redeem them). https://www.treasurydirect.gov/indiv/re ... q.htm#gift
Thanks,

I bought them as a gif for her. They are showing in my gift box on TD.

Question: is there any sort of a rush to get the medallion guarantee and me to transfer them to her account? E.g. would just keeping them in my gift box and not transferring them impact the interesth earned or redemption timeline?
No - but maybe...

As I understand it - interest will accrue as though she owned them now, and they can be redeemed in 12 months from when you bought them (assuming they've been "delivered" by then). Those don't change...

What might matter to you is the $10k/year/person limit. That limit applies to "purchase" and/or "receive as gift".

So, if you only plan to purchase $10k for spouse - then no big deal - you are already there (just need an account before she can redeem).

But if you plan to buy another $10k for spouse, then you'll want to get account and "deliver" them to her. If you do so yet this year, then she can buy (or you can gift her) another $10k next year. But if you don't open the account until next year, she's effectively lost using this year's purchase amount limit. This can also indirectly impact the "lock-up"/"redemption" timeline. For example, let's say she gets her account setup in April and buys $10k - which can't be redeemed until April 2023 (1 year later). Since she can't "buy" and "receive" more than $10k in one year - your "gift" is effectively stuck in your gift box until 2023 - which is well after the original 1-year period has expired. (The obvious "fix" to this would be deliver the gift first - and then purchase later...)
As it relates to '22 could I purchase as a gift $10k for her the deliver $20k to her?
SnowBog
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Re: 2021 I Bonds: what's your plan?

Post by SnowBog »

MikeZ wrote: Mon Dec 06, 2021 8:36 am
SnowBog wrote: Sun Dec 05, 2021 10:31 pm
MikeZ wrote: Sun Dec 05, 2021 9:58 pm
SnowBog wrote: Fri Nov 19, 2021 7:44 pm
MikeZ wrote: Fri Nov 19, 2021 7:36 pm Question:

My DW tried to create a TD account but it went to medallion signature requirement. I have a working TD account. Is there a way for me to buy them under my account for the "Add New Registration" button for her with her SSN? I already bought $10k in I bonds for me.
Ultimately, she'll need her own account...

But you could buy them as a "gift", which can be "delivered" to her account (once established). But it will need to be established or she won't be able to redeem them. But you'd have 30 years to get the account created (or by whenever you wanted to redeem them). https://www.treasurydirect.gov/indiv/re ... q.htm#gift
Thanks,

I bought them as a gif for her. They are showing in my gift box on TD.

Question: is there any sort of a rush to get the medallion guarantee and me to transfer them to her account? E.g. would just keeping them in my gift box and not transferring them impact the interesth earned or redemption timeline?
No - but maybe...

As I understand it - interest will accrue as though she owned them now, and they can be redeemed in 12 months from when you bought them (assuming they've been "delivered" by then). Those don't change...

What might matter to you is the $10k/year/person limit. That limit applies to "purchase" and/or "receive as gift".

So, if you only plan to purchase $10k for spouse - then no big deal - you are already there (just need an account before she can redeem).

But if you plan to buy another $10k for spouse, then you'll want to get account and "deliver" them to her. If you do so yet this year, then she can buy (or you can gift her) another $10k next year. But if you don't open the account until next year, she's effectively lost using this year's purchase amount limit. This can also indirectly impact the "lock-up"/"redemption" timeline. For example, let's say she gets her account setup in April and buys $10k - which can't be redeemed until April 2023 (1 year later). Since she can't "buy" and "receive" more than $10k in one year - your "gift" is effectively stuck in your gift box until 2023 - which is well after the original 1-year period has expired. (The obvious "fix" to this would be deliver the gift first - and then purchase later...)
As it relates to '22 could I purchase as a gift $10k for her the deliver $20k to her?
Not in the same year.

The $10k limit still applies per year, so at most you can deliver (or she could buy) $10k per year.

So if you want to get her $20k ASAP, your best option is to get her account setup and deliver the first $10k this year, so you can deliver (or she can purchase) another $10k next year. Outwise, it will take to 2023's allotment to get the next $10k (assuming you deliver the first next year).
MikeZ
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Re: 2021 I Bonds: what's your plan?

Post by MikeZ »

Can I deliver to her account before the Medallion signature guarantee goes through?
SnowBog
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Re: 2021 I Bonds: what's your plan?

Post by SnowBog »

MikeZ wrote: Mon Dec 06, 2021 11:51 am Can I deliver to her account before the Medallion signature guarantee goes through?
Does she have an account? In other words, you have an account number and she can login to the account?

If so, I'd think yes. (Maybe the Medallion is only for adding the bank account - which isn't initially needed - only if/when you buy/redeem in the account.)

If not, you want to get the account setup first.
LmG7119
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Re: 2021 I Bonds: what's your plan?

Post by LmG7119 »

What rate has been lately?
Do you guys buy those and cash them in a couple of years like CDs?

What advantages does this have over brokerage account?
Should I buy it for me or my child instead of myself?

Thanks
SnowBog
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Re: 2021 I Bonds: what's your plan?

Post by SnowBog »

You'll find useful information in the I Bond Manifesto thread: viewtopic.php?t=358732 and the wiki https://www.bogleheads.org/wiki/I_savings_bonds
LmG7119
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Re: 2021 I Bonds: what's your plan?

Post by LmG7119 »

Do I just put $10000 in the amount? Then I can redeem in any amount.

Sorry for the newbie questions?
calwatch
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Re: 2021 I Bonds: what's your plan?

Post by calwatch »

lepa71 wrote: Tue Dec 14, 2021 11:31 am Do I just put $10000 in the amount? Then I can redeem in any amount.

Sorry for the newbie questions?
Yes, redeem in any amount above $25. You must leave a minimum of $25 in the account, or otherwise take it to zero. https://www.treasurydirect.gov/indiv/re ... redeem.htm

I have redeemed them when rates were lower and more competitive with online savings accounts (as opposed to now when they are significantly above) to pay down mortgages and buy cars. There is nothing wrong with that. With an entity account for my sole proprietorship I can purchase $25,000 a year and that is plenty.
LmG7119
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Re: 2021 I Bonds: what's your plan?

Post by LmG7119 »

calwatch wrote: Tue Dec 14, 2021 11:45 am
lepa71 wrote: Tue Dec 14, 2021 11:31 am Do I just put $10000 in the amount? Then I can redeem in any amount.

Sorry for the newbie questions?
Yes, redeem in any amount above $25. You must leave a minimum of $25 in the account, or otherwise take it to zero. https://www.treasurydirect.gov/indiv/re ... redeem.htm

I have redeemed them when rates were lower and more competitive with online savings accounts (as opposed to now when they are significantly above) to pay down mortgages and buy cars. There is nothing wrong with that. With an entity account for my sole proprietorship I can purchase $25,000 a year and that is plenty.
Do I want to buy it at the end of the month like it stated in the "Buy ‘I Bonds’ and Worry Less about Inflation" manifesto? Or it does not matter?
Does it make sense to cash some money from a brokerage account to finance I-bond for the whole family including a minor?

Thanks
tj
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Re: 2021 I Bonds: what's your plan?

Post by tj »

lepa71 wrote: Tue Dec 14, 2021 11:51 am
calwatch wrote: Tue Dec 14, 2021 11:45 am
lepa71 wrote: Tue Dec 14, 2021 11:31 am Do I just put $10000 in the amount? Then I can redeem in any amount.

Sorry for the newbie questions?
Yes, redeem in any amount above $25. You must leave a minimum of $25 in the account, or otherwise take it to zero. https://www.treasurydirect.gov/indiv/re ... redeem.htm

I have redeemed them when rates were lower and more competitive with online savings accounts (as opposed to now when they are significantly above) to pay down mortgages and buy cars. There is nothing wrong with that. With an entity account for my sole proprietorship I can purchase $25,000 a year and that is plenty.
Do I want to buy it at the end of the month like it stated in the "Buy ‘I Bonds’ and Worry Less about Inflation" manifesto? Or it does not matter?
Does it make sense to cash some money from a brokerage account to finance I-bond for the whole family including a minor?

Thanks
Does it matter? Not really. But why not collect the extra month-ish of interest?
LmG7119
Posts: 504
Joined: Sat Mar 05, 2016 4:12 pm

Re: 2021 I Bonds: what's your plan?

Post by LmG7119 »

tj wrote: Tue Dec 14, 2021 11:53 am
lepa71 wrote: Tue Dec 14, 2021 11:51 am
calwatch wrote: Tue Dec 14, 2021 11:45 am
lepa71 wrote: Tue Dec 14, 2021 11:31 am Do I just put $10000 in the amount? Then I can redeem in any amount.

Sorry for the newbie questions?
Yes, redeem in any amount above $25. You must leave a minimum of $25 in the account, or otherwise take it to zero. https://www.treasurydirect.gov/indiv/re ... redeem.htm

I have redeemed them when rates were lower and more competitive with online savings accounts (as opposed to now when they are significantly above) to pay down mortgages and buy cars. There is nothing wrong with that. With an entity account for my sole proprietorship I can purchase $25,000 a year and that is plenty.
Do I want to buy it at the end of the month like it stated in the "Buy ‘I Bonds’ and Worry Less about Inflation" manifesto? Or it does not matter?
Does it make sense to cash some money from a brokerage account to finance I-bond for the whole family including a minor?

Thanks
Does it matter? Not really. But why not collect the extra month-ish of interest?
What I mean is that I would schedule it to buy on 12/29 instead of today?
Does it make sense to cash out from brokerage account for Jan 2022? That is the question.
Whakamole
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Re: 2021 I Bonds: what's your plan?

Post by Whakamole »

It's too bad the I-bonds rate wasn't set in December!
Merionman
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Joined: Wed Jan 17, 2018 10:31 am

I Bonds a good investment .

Post by Merionman »

I read an article back in 2011 that touted the wisdom of investing in I Bonds.

I subsequently purchased $5,000. In December, 2011 and $10,000. In December, 2012 with some spare cash I had available.

I have not paid much attention to the topic since and now wonder should I invest again at year end 2021.

Similarly I hold @ $12,000. In the Vanguard TIPS mutual fund in my Traditional IRA.
I purchased these shares years ago and inflation has never been an issue until this year, even now there is the debate over whether or not it is transitory.

I am a 69 year old buy and hold investor who tries to follow St. Jack’s gospel.

My total investment portfolio is @ $1.7M and is roughly 40% stocks/40% bonds/20% cash).

I work part-time and will begin collecting my social security and pensions in March, 2021 when I turn 70.
Last edited by Merionman on Tue Dec 14, 2021 1:17 pm, edited 3 times in total.
rockstar
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Re: 2021 I Bonds: what's your plan?

Post by rockstar »

I'm planning to buy another $10k in January.
MrJedi
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Re: 2021 I Bonds: what's your plan?

Post by MrJedi »

lepa71 wrote: Tue Dec 14, 2021 12:04 pm
tj wrote: Tue Dec 14, 2021 11:53 am
lepa71 wrote: Tue Dec 14, 2021 11:51 am Do I want to buy it at the end of the month like it stated in the "Buy ‘I Bonds’ and Worry Less about Inflation" manifesto? Or it does not matter?
Does it make sense to cash some money from a brokerage account to finance I-bond for the whole family including a minor?

Thanks
Does it matter? Not really. But why not collect the extra month-ish of interest?
What I mean is that I would schedule it to buy on 12/29 instead of today?
Does it make sense to cash out from brokerage account for Jan 2022? That is the question.
I bond interest starts on the first day of the calendar month in which it is issued. Only the month matters for interest/holding period, not the day. So an I bond issued on 12/1 will earn the same month of interest as one issued on 12/30.

Likewise when you redeem, interest is added on the first day of the month, there is no partial interest for holding for a partial month.

Therefore some people will squeeze extra value by buying late in the month and redeeming early in the month, so you can get like 25-30 days extra interest in a similar low risk asset by holding in your bank account.

In today's low interest environment, it does not mean much. $10,000 in a 0.5% savings account will yield about $4 in a month. You are talking about a half month difference so you can squeeze out about $2 extra interest in that case. So maybe literally a can of beans worth.

Also I would caution against buying within the last couple days of the month in case there is some unplanned hiccup.

Your second question is much more personal and less mathematical, depends on your assets, risk tolerance, investing goals, etc.
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Mel Lindauer
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Re: 2021 I Bonds: what's your plan?

Post by Mel Lindauer »

MrJedi wrote: Tue Dec 14, 2021 1:28 pm
lepa71 wrote: Tue Dec 14, 2021 12:04 pm
tj wrote: Tue Dec 14, 2021 11:53 am
lepa71 wrote: Tue Dec 14, 2021 11:51 am Do I want to buy it at the end of the month like it stated in the "Buy ‘I Bonds’ and Worry Less about Inflation" manifesto? Or it does not matter?
Does it make sense to cash some money from a brokerage account to finance I-bond for the whole family including a minor?

Thanks
Does it matter? Not really. But why not collect the extra month-ish of interest?
What I mean is that I would schedule it to buy on 12/29 instead of today?
Does it make sense to cash out from brokerage account for Jan 2022? That is the question.
I bond interest starts on the first day of the calendar month in which it is issued. Only the month matters for interest/holding period, not the day. So an I bond issued on 12/1 will earn the same month of interest as one issued on 12/30.

Likewise when you redeem, interest is added on the first day of the month, there is no partial interest for holding for a partial month.

Therefore some people will squeeze extra value by buying late in the month and redeeming early in the month, so you can get like 25-30 days extra interest in a similar low risk asset by holding in your bank account.

In today's low interest environment, it does not mean much. $10,000 in a 0.5% savings account will yield about $4 in a month. You are talking about a half month difference so you can squeeze out about $2 extra interest in that case. So maybe literally a can of beans worth.

Also I would caution against buying within the last couple days of the month in case there is some unplanned hiccup.

Your second question is much more personal and less mathematical, depends on your assets, risk tolerance, investing goals, etc.
And a benefit of buying at the end of the month and selling at the beginning of the month is that the lockup rate now basically becomes 11 months instead of 12.
Best Regards - Mel | | Semper Fi
2pedals
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Re: 2021 I Bonds: what's your plan?

Post by 2pedals »

BV3273 wrote: Mon Dec 06, 2021 7:16 am Everyone on here seems to have several accounts in the form of brokerages, banks, and money management apps - I’m guilty of this as well - one more account isn’t a big deal to me.
Be careful with trying to lump all bogleheads together. I have seen very many different approaches on the BH forums. I tend to like to do things that will simplify things for my survivors. It's a nice feeling as I get older and older that I won't be leaving my spouse or adult children power of attorney(s) more and more things to deal with if I have more pressing concerns. I have seen some really nasty end-of-life struggles.
smectym
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Re: 2021 I Bonds: what's your plan?

Post by smectym »

Mel Lindauer wrote: Tue Dec 14, 2021 10:42 pm
MrJedi wrote: Tue Dec 14, 2021 1:28 pm
lepa71 wrote: Tue Dec 14, 2021 12:04 pm
tj wrote: Tue Dec 14, 2021 11:53 am
lepa71 wrote: Tue Dec 14, 2021 11:51 am Do I want to buy it at the end of the month like it stated in the "Buy ‘I Bonds’ and Worry Less about Inflation" manifesto? Or it does not matter?
Does it make sense to cash some money from a brokerage account to finance I-bond for the whole family including a minor?

Thanks
Does it matter? Not really. But why not collect the extra month-ish of interest?
What I mean is that I would schedule it to buy on 12/29 instead of today?
Does it make sense to cash out from brokerage account for Jan 2022? That is the question.
I bond interest starts on the first day of the calendar month in which it is issued. Only the month matters for interest/holding period, not the day. So an I bond issued on 12/1 will earn the same month of interest as one issued on 12/30.

Likewise when you redeem, interest is added on the first day of the month, there is no partial interest for holding for a partial month.

Therefore some people will squeeze extra value by buying late in the month and redeeming early in the month, so you can get like 25-30 days extra interest in a similar low risk asset by holding in your bank account.

In today's low interest environment, it does not mean much. $10,000 in a 0.5% savings account will yield about $4 in a month. You are talking about a half month difference so you can squeeze out about $2 extra interest in that case. So maybe literally a can of beans worth.

Also I would caution against buying within the last couple days of the month in case there is some unplanned hiccup.

Your second question is much more personal and less mathematical, depends on your assets, risk tolerance, investing goals, etc.
And a benefit of buying at the end of the month and selling at the beginning of the month is that the lockup rate now basically becomes 11 months instead of 12.
>>the lockup rate now basically becomes 11 months instead of 12

Yes, that's a benefit...But how many who purchase an I bond are really using it as a 1-year (or 11 month) CD substitute?
rab
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Re: 2021 I Bonds: what's your plan?

Post by rab »

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Last edited by rab on Sun Dec 19, 2021 1:11 pm, edited 1 time in total.
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tipswatcher
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Re: 2021 I Bonds: what's your plan?

Post by tipswatcher »

smectym wrote: Wed Dec 15, 2021 12:28 am
>>the lockup rate now basically becomes 11 months instead of 12

Yes, that's a benefit...But how many who purchase an I bond are really using it as a 1-year (or 11 month) CD substitute?
In the past, I'd say very few people bought I Bonds as a one-year investment, but now with the 7.12% interest rate for six months (and probably another high rate for the next six months) a lot of people are looking at this as a short-term option. Of course, they will want to hold for at least 15 months to avoid having the 3-month interest penalty eliminate a high rate of interest. If nominal rates (1-year bank CDs, for example) rise to more reasonable levels in the next 18 months, the appeal of I Bonds might fade for the short-termers. Not for the long-term holders, though.
TIPS: Perfect investment for imperfect times?
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