I Bonds Mega Thread (I Bond Heads Rejoice!)

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
PickitPaul
Posts: 103
Joined: Fri Jan 23, 2015 11:17 pm

I Bonds

Post by PickitPaul »

[Thread merged into here --admin LadyGeek]

Can I set up with a Vanguard mm settlement fund account - don't have check drawing ability with Vanguard. I don't want to set it up with my local checking account because I don't know how long i'll be with this bank, and I heard its hard to change banking info. once set up
User avatar
Mel Lindauer
Moderator
Posts: 35782
Joined: Mon Feb 19, 2007 7:49 pm
Location: Daytona Beach Shores, Florida
Contact:

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Mel Lindauer »

euler wrote: Wed Oct 27, 2021 9:58 am
Mel Lindauer wrote: Wed Oct 27, 2021 2:27 am As SnowBog correctly pointed out in the previous reply, I Bonds can be used as a tax-shifting tool. You might buy them when you're working and in a nigh tax bracket and then choose to redeem them after you've retired and are in a lower tax bracket. So you've shifted the taxes from a high bracket to a low bracket.
Thanks for clearing it up for me. I think I was mentally conflating the capital appreciation of an asset in a taxable account, with the accumulated interest of a savings bond, since the mechanics of the two are somewhat similar (you pay taxes on the increase when you "sell"). The tax-shifting argument makes sense.

This raises an interesting point, which is that as with the Roth vs non-Roth 401k question, the deferred tax can cut both ways. I.e. if you are in a low tax bracket and your portfolio is doing well, it's conceivable that you'd be better off paying the tax now, instead of at redemption. For example, I recently "down shifted" into a job which puts me in the 12% bracket. The tax-deferred aspect of I bonds will probably end up being a wash for me, although it's possible I will go back to a higher bracket before I retire.
Just so you (and others) know, you can elect to pay the taxes on the interest on your I Bonds on an annual basis if it makes sense to do so (if you're in a low tax bracket but expect to be in a higher tax bracket later). And, you can request to switch back to tax-deferred later if it makes sense to do so.
Best Regards - Mel | | Semper Fi
User avatar
LadyGeek
Site Admin
Posts: 95687
Joined: Sat Dec 20, 2008 4:34 pm
Location: Philadelphia
Contact:

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by LadyGeek »

I merged PickitPaul's post into the ongoing discussion. Notice the post title is called "I Bonds".
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
SnowBog
Posts: 4699
Joined: Fri Dec 21, 2018 10:21 pm

Re: I Bonds

Post by SnowBog »

PickitPaul wrote: Wed Oct 27, 2021 1:53 pm [Thread merged into here --admin LadyGeek]

Can I set up with a Vanguard mm settlement fund account - don't have check drawing ability with Vanguard. I don't want to set it up with my local checking account because I don't know how long i'll be with this bank, and I heard its hard to change banking info. once set up
Needs to be able to do an ACH pull. So if you have a routing number and account number that you can use, I'd think it should be fine.

I do ACH with lots of accounts that don't have check writing ability.
User avatar
ApeAttack
Posts: 915
Joined: Wed Dec 23, 2020 7:28 pm
Location: Gorillatown, USA

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by ApeAttack »

LittleMaggieMae wrote: Wed Oct 27, 2021 1:39 pm
ApeAttack wrote: Wed Oct 27, 2021 11:20 am
mikejuss wrote: Wed Oct 27, 2021 9:47 am
mary1492 wrote: Wed Oct 27, 2021 9:45 am
mikejuss wrote: Wed Oct 27, 2021 9:42 am

Thanks. Is the fixed rate always zero? If so, what's the point of it? The real rate is whatever the inflation rate is.
The fixed rate is not always zero. It's been over 3% in the past.
My bad--so the current fixed rate is zero, and whatever the fixed rate is at the time of purchase is locked for the life of the bond. How is the fixed rate calculated? And, for that matter, what happens if we experience deflation (rather than inflation)?

Kind of like how saying there's a hamster, squirrel, dragon or perhaps a Tesseract under the hood of your car and that's what makes the car move - when you don't understand the basics of how the engine works. :)
I haven't seen anyone give an explanation of how the fixed rate is determined. My guess is the Treasury uses chicken bones to conjure up a number.
Yep. Chicken bones. If you can't get motivated to go over to the TD website and read how it's calculated (and you can SEE all the fixed rates for past bonds, too!) then the explanation of Chicken Bones is a good way to understand how it's done. :)

FWIW: I've gone to the TD website and read how it's done... multiple times over the years - I can't keep it in my head. I'm too lazy to go over there now and grab the link for all you all....
Are you confusing the composite rate (which follows a formula) with the fixed rate? You sound like the Treasury uses a specific method that's publicly disclosed for the fixed rate, and accusing me of being too lazy to look up the explanation.

Here is the TD website on the fixed rate... I don't see an explanation on how it is determined. What am I overlooking?
https://www.treasurydirect.gov/indiv/re ... .htm#fixed
May all your index funds gain +0.5% today.
User avatar
Mel Lindauer
Moderator
Posts: 35782
Joined: Mon Feb 19, 2007 7:49 pm
Location: Daytona Beach Shores, Florida
Contact:

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Mel Lindauer »

ApeAttack wrote: Wed Oct 27, 2021 3:23 pm
LittleMaggieMae wrote: Wed Oct 27, 2021 1:39 pm
ApeAttack wrote: Wed Oct 27, 2021 11:20 am
mikejuss wrote: Wed Oct 27, 2021 9:47 am
mary1492 wrote: Wed Oct 27, 2021 9:45 am

The fixed rate is not always zero. It's been over 3% in the past.
My bad--so the current fixed rate is zero, and whatever the fixed rate is at the time of purchase is locked for the life of the bond. How is the fixed rate calculated? And, for that matter, what happens if we experience deflation (rather than inflation)?

Kind of like how saying there's a hamster, squirrel, dragon or perhaps a Tesseract under the hood of your car and that's what makes the car move - when you don't understand the basics of how the engine works. :)
I haven't seen anyone give an explanation of how the fixed rate is determined. My guess is the Treasury uses chicken bones to conjure up a number.
Yep. Chicken bones. If you can't get motivated to go over to the TD website and read how it's calculated (and you can SEE all the fixed rates for past bonds, too!) then the explanation of Chicken Bones is a good way to understand how it's done. :)

FWIW: I've gone to the TD website and read how it's done... multiple times over the years - I can't keep it in my head. I'm too lazy to go over there now and grab the link for all you all....
Are you confusing the composite rate (which follows a formula) with the fixed rate? You sound like the Treasury uses a specific method that's publicly disclosed for the fixed rate, and accusing me of being too lazy to look up the explanation.

Here is the TD website on the fixed rate... I don't see an explanation on how it is determined. What am I overlooking?
https://www.treasurydirect.gov/indiv/re ... .htm#fixed
You're not overlooking anything. There is no published explanation for how they set the fixed rate. It's arbitrary and at their sole discretion.
Best Regards - Mel | | Semper Fi
Broken Man 1999
Posts: 8626
Joined: Wed Apr 08, 2015 11:31 am
Location: West coast of Florida, near Champa Bay !

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Broken Man 1999 »

HueyLD wrote: Tue Oct 26, 2021 12:50 pm
Mel Lindauer wrote: Tue Oct 26, 2021 12:40 pm
tibbitts wrote: Tue Oct 26, 2021 1:15 am
Mel Lindauer wrote: Sun Oct 24, 2021 5:51 pm Can you (or anyone else) please explain this paradox? I just don't know what I'm missing, but am open to learning why this happens so often.
My theory is that it's because the IRA contributions limits have grown over time, which the I-bond limits (not to mention purchase terms) have become much more restrictive.
While that true, the fact is that the I Bond contribution limits are still greater than the IRA limits, and yet some folks gladly continue to contribute their 6k or 7k to their TIRA and then belittle the 10k I Bond limit which, like the TIRA, is also tax-deferred, but also offers even more benefits (free from state and local taxation, can be used, tax-free, for qualifying educational expenses).
+100!!!
Startled Cat wrote: Sun Oct 24, 2021 4:11 pm I've always held the opinion that I Bonds aren't worth bothering with. Even if the rates suddenly became attractive, the purchase limits are too low to make them very interesting. And I've heard terrible, terrible things about TreasuryDirect.

This thread did finally pique my interest. It's still not going to move the needle on my portfolio, but I figured what the heck, who doesn't love a good deal?

Tried to sign up for an account at TreasuryDirect, and immediately got this email:
Thanks again for opening a TreasuryDirect account. We are having difficulty verifying the information you provided when opening your account. For your protection, please complete the Account Authorization form https://www.treasurydirect.gov/pdf/rs/acctauth.pdf and mail it to Treasury Retail Securities Site, P.O. Box 7015, Minneapolis, MN 55480-7015. A hold has been placed on your account that will prevent you from accessing your account. After we receive and approve the Account Authorization form, the hold on your account will be removed. When you log into your account, check the Investor InBox section of your Treasury Direct account for an important message.
The form further explains that the completed form needs to be certified by a "certifying officer" at a financial instituation, and a notary's certification is not acceptable. I've never even heard of this. There's no way I'm going to put in the time to navigate this mess. I guess I'll go back to ignoring I Bonds. Oh well...

I'm just glad I ran into this before I actually transferred any money.
For someone in retirement, or well along their career path, the comments about the low limits not moving the needle are certainly valid.

DW and I are retired, and I see I-bonds as a useful holding for educational/life expenses for our grandchildren. Right now I am buying $10,000 and putting each of my grandchildren as POD beneficiaries for $2,500 in savings bonds.

While savings bonds won't move my needle, $2,500/year/grandchild can add up to a nice bit of cash over the years prior to any of them starting college. I don't have to die for them to get use the money, I can cash them out and distribute the funds as I see fit, or keep the funds for myself (not my intent).

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
tj
Posts: 9366
Joined: Wed Dec 23, 2009 11:10 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by tj »

Broken Man 1999 wrote: Wed Oct 27, 2021 5:23 pm
HueyLD wrote: Tue Oct 26, 2021 12:50 pm
Mel Lindauer wrote: Tue Oct 26, 2021 12:40 pm
tibbitts wrote: Tue Oct 26, 2021 1:15 am
Mel Lindauer wrote: Sun Oct 24, 2021 5:51 pm Can you (or anyone else) please explain this paradox? I just don't know what I'm missing, but am open to learning why this happens so often.
My theory is that it's because the IRA contributions limits have grown over time, which the I-bond limits (not to mention purchase terms) have become much more restrictive.
While that true, the fact is that the I Bond contribution limits are still greater than the IRA limits, and yet some folks gladly continue to contribute their 6k or 7k to their TIRA and then belittle the 10k I Bond limit which, like the TIRA, is also tax-deferred, but also offers even more benefits (free from state and local taxation, can be used, tax-free, for qualifying educational expenses).
+100!!!
Startled Cat wrote: Sun Oct 24, 2021 4:11 pm I've always held the opinion that I Bonds aren't worth bothering with. Even if the rates suddenly became attractive, the purchase limits are too low to make them very interesting. And I've heard terrible, terrible things about TreasuryDirect.

This thread did finally pique my interest. It's still not going to move the needle on my portfolio, but I figured what the heck, who doesn't love a good deal?

Tried to sign up for an account at TreasuryDirect, and immediately got this email:
Thanks again for opening a TreasuryDirect account. We are having difficulty verifying the information you provided when opening your account. For your protection, please complete the Account Authorization form https://www.treasurydirect.gov/pdf/rs/acctauth.pdf and mail it to Treasury Retail Securities Site, P.O. Box 7015, Minneapolis, MN 55480-7015. A hold has been placed on your account that will prevent you from accessing your account. After we receive and approve the Account Authorization form, the hold on your account will be removed. When you log into your account, check the Investor InBox section of your Treasury Direct account for an important message.
The form further explains that the completed form needs to be certified by a "certifying officer" at a financial instituation, and a notary's certification is not acceptable. I've never even heard of this. There's no way I'm going to put in the time to navigate this mess. I guess I'll go back to ignoring I Bonds. Oh well...

I'm just glad I ran into this before I actually transferred any money.
For someone in retirement, or well along their career path, the comments about the low limits not moving the needle are certainly valid.

DW and I are retired, and I see I-bonds as a useful holding for educational/life expenses for our grandchildren. Right now I am buying $10,000 and putting each of my grandchildren as POD beneficiaries for $2,500 in savings bonds.

While savings bonds won't move my needle, $2,500/year/grandchild can add up to a nice bit of cash over the years prior to any of them starting college. I don't have to die for them to get use the money, I can cash them out and distribute the funds as I see fit, or keep the funds for myself (not my intent).

Broken Man 1999
For me, putting in $10k for 15 months will earn me $500, give or take. If the post 7% interest rate is not as good as what I can earn on cash elsewhere, I just sell them in the 15th month.

I've deposited more for less. Why wouldn't I click some buttons for $500 on $10k ?
Eastcoaster212
Posts: 59
Joined: Tue Nov 12, 2019 6:41 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Eastcoaster212 »

Will treasury direct allow you to accidentally overcontribute? I'm close to the full 10K
Joe Public
Posts: 197
Joined: Mon Jul 27, 2020 8:36 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Joe Public »

tj wrote: Wed Oct 27, 2021 5:31 pm
Broken Man 1999 wrote: Wed Oct 27, 2021 5:23 pm
HueyLD wrote: Tue Oct 26, 2021 12:50 pm
Mel Lindauer wrote: Tue Oct 26, 2021 12:40 pm
tibbitts wrote: Tue Oct 26, 2021 1:15 am
My theory is that it's because the IRA contributions limits have grown over time, which the I-bond limits (not to mention purchase terms) have become much more restrictive.
While that true, the fact is that the I Bond contribution limits are still greater than the IRA limits, and yet some folks gladly continue to contribute their 6k or 7k to their TIRA and then belittle the 10k I Bond limit which, like the TIRA, is also tax-deferred, but also offers even more benefits (free from state and local taxation, can be used, tax-free, for qualifying educational expenses).
+100!!!
Startled Cat wrote: Sun Oct 24, 2021 4:11 pm I've always held the opinion that I Bonds aren't worth bothering with. Even if the rates suddenly became attractive, the purchase limits are too low to make them very interesting. And I've heard terrible, terrible things about TreasuryDirect.

This thread did finally pique my interest. It's still not going to move the needle on my portfolio, but I figured what the heck, who doesn't love a good deal?

Tried to sign up for an account at TreasuryDirect, and immediately got this email:
Thanks again for opening a TreasuryDirect account. We are having difficulty verifying the information you provided when opening your account. For your protection, please complete the Account Authorization form https://www.treasurydirect.gov/pdf/rs/acctauth.pdf and mail it to Treasury Retail Securities Site, P.O. Box 7015, Minneapolis, MN 55480-7015. A hold has been placed on your account that will prevent you from accessing your account. After we receive and approve the Account Authorization form, the hold on your account will be removed. When you log into your account, check the Investor InBox section of your Treasury Direct account for an important message.
The form further explains that the completed form needs to be certified by a "certifying officer" at a financial instituation, and a notary's certification is not acceptable. I've never even heard of this. There's no way I'm going to put in the time to navigate this mess. I guess I'll go back to ignoring I Bonds. Oh well...

I'm just glad I ran into this before I actually transferred any money.
For someone in retirement, or well along their career path, the comments about the low limits not moving the needle are certainly valid.

DW and I are retired, and I see I-bonds as a useful holding for educational/life expenses for our grandchildren. Right now I am buying $10,000 and putting each of my grandchildren as POD beneficiaries for $2,500 in savings bonds.

While savings bonds won't move my needle, $2,500/year/grandchild can add up to a nice bit of cash over the years prior to any of them starting college. I don't have to die for them to get use the money, I can cash them out and distribute the funds as I see fit, or keep the funds for myself (not my intent).

Broken Man 1999
For me, putting in $10k for 15 months will earn me $500, give or take. If the post 7% interest rate is not as good as what I can earn on cash elsewhere, I just sell them in the 15th month.

I've deposited more for less. Why wouldn't I click some buttons for $500 on $10k ?
It's like a 15-month CD at around 4% APR, which is attractive to many in today's environment.
tj
Posts: 9366
Joined: Wed Dec 23, 2009 11:10 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by tj »

Joe Public wrote: Wed Oct 27, 2021 5:53 pm
tj wrote: Wed Oct 27, 2021 5:31 pm
Broken Man 1999 wrote: Wed Oct 27, 2021 5:23 pm
HueyLD wrote: Tue Oct 26, 2021 12:50 pm
Mel Lindauer wrote: Tue Oct 26, 2021 12:40 pm

While that true, the fact is that the I Bond contribution limits are still greater than the IRA limits, and yet some folks gladly continue to contribute their 6k or 7k to their TIRA and then belittle the 10k I Bond limit which, like the TIRA, is also tax-deferred, but also offers even more benefits (free from state and local taxation, can be used, tax-free, for qualifying educational expenses).
+100!!!
Startled Cat wrote: Sun Oct 24, 2021 4:11 pm I've always held the opinion that I Bonds aren't worth bothering with. Even if the rates suddenly became attractive, the purchase limits are too low to make them very interesting. And I've heard terrible, terrible things about TreasuryDirect.

This thread did finally pique my interest. It's still not going to move the needle on my portfolio, but I figured what the heck, who doesn't love a good deal?

Tried to sign up for an account at TreasuryDirect, and immediately got this email:
Thanks again for opening a TreasuryDirect account. We are having difficulty verifying the information you provided when opening your account. For your protection, please complete the Account Authorization form https://www.treasurydirect.gov/pdf/rs/acctauth.pdf and mail it to Treasury Retail Securities Site, P.O. Box 7015, Minneapolis, MN 55480-7015. A hold has been placed on your account that will prevent you from accessing your account. After we receive and approve the Account Authorization form, the hold on your account will be removed. When you log into your account, check the Investor InBox section of your Treasury Direct account for an important message.
The form further explains that the completed form needs to be certified by a "certifying officer" at a financial instituation, and a notary's certification is not acceptable. I've never even heard of this. There's no way I'm going to put in the time to navigate this mess. I guess I'll go back to ignoring I Bonds. Oh well...

I'm just glad I ran into this before I actually transferred any money.
For someone in retirement, or well along their career path, the comments about the low limits not moving the needle are certainly valid.

DW and I are retired, and I see I-bonds as a useful holding for educational/life expenses for our grandchildren. Right now I am buying $10,000 and putting each of my grandchildren as POD beneficiaries for $2,500 in savings bonds.

While savings bonds won't move my needle, $2,500/year/grandchild can add up to a nice bit of cash over the years prior to any of them starting college. I don't have to die for them to get use the money, I can cash them out and distribute the funds as I see fit, or keep the funds for myself (not my intent).

Broken Man 1999
For me, putting in $10k for 15 months will earn me $500, give or take. If the post 7% interest rate is not as good as what I can earn on cash elsewhere, I just sell them in the 15th month.

I've deposited more for less. Why wouldn't I click some buttons for $500 on $10k ?
It's like a 15-month CD at around 4% APR, which is attractive to many in today's environment.
Exactly. That's how I view it.
User avatar
ApeAttack
Posts: 915
Joined: Wed Dec 23, 2020 7:28 pm
Location: Gorillatown, USA

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by ApeAttack »

Mel Lindauer wrote: Wed Oct 27, 2021 4:11 pm
ApeAttack wrote: Wed Oct 27, 2021 3:23 pm
LittleMaggieMae wrote: Wed Oct 27, 2021 1:39 pm
ApeAttack wrote: Wed Oct 27, 2021 11:20 am
mikejuss wrote: Wed Oct 27, 2021 9:47 am

My bad--so the current fixed rate is zero, and whatever the fixed rate is at the time of purchase is locked for the life of the bond. How is the fixed rate calculated? And, for that matter, what happens if we experience deflation (rather than inflation)?

Kind of like how saying there's a hamster, squirrel, dragon or perhaps a Tesseract under the hood of your car and that's what makes the car move - when you don't understand the basics of how the engine works. :)
I haven't seen anyone give an explanation of how the fixed rate is determined. My guess is the Treasury uses chicken bones to conjure up a number.
Yep. Chicken bones. If you can't get motivated to go over to the TD website and read how it's calculated (and you can SEE all the fixed rates for past bonds, too!) then the explanation of Chicken Bones is a good way to understand how it's done. :)

FWIW: I've gone to the TD website and read how it's done... multiple times over the years - I can't keep it in my head. I'm too lazy to go over there now and grab the link for all you all....
Are you confusing the composite rate (which follows a formula) with the fixed rate? You sound like the Treasury uses a specific method that's publicly disclosed for the fixed rate, and accusing me of being too lazy to look up the explanation.

Here is the TD website on the fixed rate... I don't see an explanation on how it is determined. What am I overlooking?
https://www.treasurydirect.gov/indiv/re ... .htm#fixed
You're not overlooking anything. There is no published explanation for how they set the fixed rate. It's arbitrary and at their sole discretion.
Thanks for the confirmation. I read everything I could find about I-Bonds on TD and didn't see anything about how the fixed rate is determined.
May all your index funds gain +0.5% today.
SantaClaraSurfer
Posts: 736
Joined: Tue Feb 19, 2019 10:09 am

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by SantaClaraSurfer »

Shorty wrote: Tue Oct 26, 2021 2:57 am Regarding limits, this makes a lot of sense for midcareer Med to high earners already maximizing tax sheltered and contributing taxable, especially in the 35-50 age range leading to SS. Combine with an EE ladder and pretty solid contributions are possible. I feel many here have been blessed and spoiled by the prolonged bull market.

Also, great for building a tiered EF at any age.
Yes, we are in that boat. Here's a few more additional rationales.

1. We have an expanded space for taxable bonds favoring those that are tax deferred, or tax advantaged, or both. I Bonds complement our EE Bonds, Long Term Munis, and Long Term Treasuries. I don't think of them in isolation. Per our allocation, in 20 years our taxable bond space will be allocated around 20% in I Bonds, 20% in EE Bonds, 30% in Long Term Munis and 30% in LTTs. A "very bad sequence" for long term bonds, which are vulnerable to sustained unexpected inflation, would be hedged by a corresponding "very good" sequence for I Bonds.

2. We rent. Some of the money we save by renting goes to equities. But those dollars are vulnerable to a poorly timed equities crash. So another big chunk of the money we save by renting goes to taxable bonds. Comparing the returns of a basket of I Bonds/EE Bonds/LTTs/and Long Term Munis to our "return" if we'd purchased a home offers real positives for the bonds. Folks who expect a return better than EE Bonds (3.53%) or I Bonds (Fixed Rate + CPI inflation) on their home purchase over 20 years may be in for a rude surprise in many markets. And there's no repairs or upkeep on your Savings Bonds.

3. I Bonds are very similar to an insurance policy for your savings account. $100 in I Bonds = a CPI equivalent (minus Fed taxes on your interest) of that $100 covering a thirty year time frame. May not factor out perfectly (or, if you we're lucky to get higher fixed rates, you might come out ahead) but that's basically a deal whereby whatever you hold in I Bonds becomes a portion of your portfolio that you've removed from vulnerability to consumer inflation and deflation for three decades. There's a reason you don't hear people talk about this feature in other investments.

4. I am a huge fan of diversification. I don't really care that there's a limit on purchasing I bonds. What I do care about is that they offer a diversification tool that I can't easily get anywhere else. The argument that you are guaranteed to get (I Bonds principal + (I Bonds returns minus your Federal Tax rate)) is somehow a "losing" proposition only holds if you think that any individual investor is guaranteed to receive returns on the alternatives that favor the better outcomes. That's not my start point. My start point is that if I can select a forward path that secures my fixed income savings floor and gives me a reasonable upside from the other components in my portfolio in that context, I will take that deal all day long.

Diversification is the best deal going, and I bonds are a great part of that.
Last edited by SantaClaraSurfer on Thu Oct 28, 2021 11:50 am, edited 1 time in total.
Shorty
Posts: 231
Joined: Sat Feb 23, 2019 3:54 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Shorty »

Great points!

For me the EE ladder creates a floor on a solid pension. The I bonds help cash/liquid/extended e fund. This will enable a comfortable position for an aggressive equities AA with the remainder and future money.
SantaClaraSurfer wrote: Wed Oct 27, 2021 8:28 pm
smectym
Posts: 1530
Joined: Thu May 26, 2011 5:07 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by smectym »

Startled Cat wrote: Sun Oct 24, 2021 4:11 pm I've always held the opinion that I Bonds aren't worth bothering with. Even if the rates suddenly became attractive, the purchase limits are too low to make them very interesting. And I've heard terrible, terrible things about TreasuryDirect.

This thread did finally pique my interest. It's still not going to move the needle on my portfolio, but I figured what the heck, who doesn't love a good deal?

Tried to sign up for an account at TreasuryDirect, and immediately got this email:
Thanks again for opening a TreasuryDirect account. We are having difficulty verifying the information you provided when opening your account. For your protection, please complete the Account Authorization form https://www.treasurydirect.gov/pdf/rs/acctauth.pdf and mail it to Treasury Retail Securities Site, P.O. Box 7015, Minneapolis, MN 55480-7015. A hold has been placed on your account that will prevent you from accessing your account. After we receive and approve the Account Authorization form, the hold on your account will be removed. When you log into your account, check the Investor InBox section of your Treasury Direct account for an important message.
The form further explains that the completed form needs to be certified by a "certifying officer" at a financial instituation, and a notary's certification is not acceptable. I've never even heard of this. There's no way I'm going to put in the time to navigate this mess. I guess I'll go back to ignoring I Bonds. Oh well...

I'm just glad I ran into this before I actually transferred any money.
Your decision, and agree Treasury Direct is an interesting site to navigate. On our part, having a solid core of high-yielding, inflation-adjusted, tax-deferred, state-tax exempt, stable-principal, zero-risk Treasury bonds accumulated over the years, is worth navigating any over-played idiosyncrasies of TD
tashnewbie
Posts: 4283
Joined: Thu Apr 23, 2020 12:44 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by tashnewbie »

tj wrote: Wed Oct 27, 2021 5:55 pm For me, putting in $10k for 15 months will earn me $500, give or take. If the post 7% interest rate is not as good as what I can earn on cash elsewhere, I just sell them in the 15th month.

I've deposited more for less. Why wouldn't I click some buttons for $500 on $10k ?
I'm still learning so I'm curious. If the May 2022 rate is lower than what you could get on cash elsewhere, why would you sell in the 15th month versus the 13th month? You're losing last 3 months' interest (at the lower rate) regardless.
MrJedi
Posts: 3540
Joined: Wed May 06, 2020 11:42 am

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by MrJedi »

If you buy now (October):

6 months 3.54%
6 months 7.12%
3 months unknown rate

Redeeming at 12 months you will forfeit 3 months of the 7.12%.

If you redeem at 15 months, you will forfeit 3 months of the unknown rate. Assuming the unknown rate is low, you may want to hold for months 13-15 so that you don't lose any of the 7.12% months.
tashnewbie
Posts: 4283
Joined: Thu Apr 23, 2020 12:44 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by tashnewbie »

MrJedi wrote: Thu Oct 28, 2021 10:27 am If you buy now (October):

6 months 3.54%
6 months 7.12%
3 months unknown rate

Redeeming at 12 months you will forfeit 3 months of the 7.12%.

If you redeem at 15 months, you will forfeit 3 months of the unknown rate. Assuming the unknown rate is low, you may want to hold for months 13-15 so that you don't lose any of the 7.12% months.
Of course. Thanks. I don't know how I got things mixed up in my head. I may have been mixing up the purchase time (was thinking Nov. in my head, so first 6 months would be 7% rate, then next 6 months of an unknown rate).
User avatar
user9532
Posts: 257
Joined: Sun Dec 18, 2016 9:08 pm
Contact:

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by user9532 »

If both husband and wife want to buy $10K each do they both have to set up separate login accounts or can they both buy through one account?
User avatar
FoundingFather
Posts: 407
Joined: Fri Dec 18, 2020 9:20 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by FoundingFather »

user9532 wrote: Thu Oct 28, 2021 12:44 pm If both husband and wife want to buy $10K each do they both have to set up separate login accounts or can they both buy through one account?
Separate accounts, sorry. =)

Founding Father
"I do not think myself equal to the Command I am honored with." -George Washington (excerpt from Journals of the Continental Congress, 16 June 1775)
k3vb0t
Posts: 503
Joined: Mon Jun 02, 2014 4:42 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by k3vb0t »

Odd - I was able to open an account fine last week for myself.

Went in to open one for my wife today and being told she must send in the Signature Guaranteed form before they can open an account. Wonder if it is because of the same IP address or computer was used?

That's... annoying. Guess no 3.54% on this one... will have her send it in and see how long that process takes, assuming our credit union has someone that can provide the Signature Guaranteed thing.
RobotsRock
Posts: 11
Joined: Tue Sep 15, 2020 10:14 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by RobotsRock »

FoundingFather wrote: Thu Oct 28, 2021 12:54 pm
user9532 wrote: Thu Oct 28, 2021 12:44 pm If both husband and wife want to buy $10K each do they both have to set up separate login accounts or can they both buy through one account?
Separate accounts, sorry. =)

Founding Father
You can buy a gift for the spouse from the same account. So still possible to get another purchase in today with one account and transfer later.
Last edited by RobotsRock on Thu Oct 28, 2021 2:42 pm, edited 1 time in total.
RobotsRock
Posts: 11
Joined: Tue Sep 15, 2020 10:14 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by RobotsRock »

k3vb0t wrote: Thu Oct 28, 2021 1:34 pm Odd - I was able to open an account fine last week for myself.

Went in to open one for my wife today and being told she must send in the Signature Guaranteed form before they can open an account. Wonder if it is because of the same IP address or computer was used?

That's... annoying. Guess no 3.54% on this one... will have her send it in and see how long that process takes, assuming our credit union has someone that can provide the Signature Guaranteed thing.
We opened up multiple accounts from same IP with no issue one day apart. Cleared cookies in between. You can still make the purchase today as a gift for the spouse from the account you have already successfully opened and transfer the gift later when her account is successfully opened.
Last edited by RobotsRock on Thu Oct 28, 2021 2:43 pm, edited 1 time in total.
RobotsRock
Posts: 11
Joined: Tue Sep 15, 2020 10:14 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by RobotsRock »

RobotsRock wrote: Sat Oct 23, 2021 11:52 am I'm new to the I-bond world and the Treasury Direct world. I was trying to understand the rules around gifting I-bonds that would potentially allow front-loading more purchases, and wanted to make sure I got this right:

Rule: Gifted I-bonds only count against the recipient's limit in the year they are transferred to the recipient, not the year they are bought for the recipient (up to $10k/year per gift recipient from any TreasuryDirect account)

Strategy: Myself (Son) + Mom + Dad

My Treasury Direct Account:
2021 Nov: Buy $10k for my limit, Buy $10k gift for dad, Buy $10k gift for mom
2022 Jan: Buy $10k for my limit, Buy $10k gift for dad, Buy $10k gift for mom

Dad's Treasury Direct Account:
2021 Nov: Buy $10k for dad limit, Buy $10k gift for me (son), Buy $10k gift for mom
2022 Jan: Buy $10k for dad limit, Buy $10k gift for me (son), Buy $10k gift for mom

Mom's Treasury Direct Account:
2021 Nov: Buy $10k for mom limit, Buy $10k gift for me (son), Buy $10k gift for dad
2022 Jan: Buy $10k for mom limit, Buy $10k gift for me (son), Buy $10k gift for dad

This would get $180k invested starting at the November semi-annual rate. Because of the $10k recipient limit per year, this means the gifted I-bonds would have to be transferred over 4-years from 2023 to 2026 to the gift recipient's TreasuryDirect account assuming no other purchases were made from each TreasuryDirect account for the account holder themselves over this period, and the I-bond interest would accrue as normal in the gift box account in the interim.

Do I have the rules right here to potentially get in $180k at the November semi-annual rate (hypothetically)?
Since the folks are old, what would happen if there was a life event before the gift-box held I-bonds could be transferred to the recipient?

Thank you for the insights!
Just wanted to report back that I successfully executed on the 2021 portion of this plan this week and was able to frontload $90k in purchases across the 3 Treasurydirect accounts via the gift-each-other-transfer-later-method without issue. Will evaluate mid-next year whether to execute on the 2022 portion, but probably happy with keeping it at $90k we got this week so we can potentially liquidate all $90k in early 2023 (by transferring $30k in the gifts to each other next year, and the last $30k in early 2023).
dsollax
Posts: 9
Joined: Wed Oct 27, 2021 6:21 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by dsollax »

I am trying to purchase today, just prior to 3:00 PT and at the end of the transaction I get this message:
Purchase Date(s): We may have changed your purchase date(s) to the next available business day.
10-29-2021

Effective Date(s): Security purchases are generally issued to your TreasuryDirect account within one business day of the purchase date. You must wait five business days after the purchase date to transfer a savings bond or deliver a gift savings bond.
Is it too late to get in for the October deadline since the purchase date will be 10/29 and it will be issued to the account 1 day later (11/1), or is it the purchase date that matters?
step-in-time
Posts: 41
Joined: Tue May 24, 2016 11:14 am

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by step-in-time »

RobotsRock wrote: Thu Oct 28, 2021 2:41 pm
RobotsRock wrote: Sat Oct 23, 2021 11:52 am I'm new to the I-bond world and the Treasury Direct world. I was trying to understand the rules around gifting I-bonds that would potentially allow front-loading more purchases, and wanted to make sure I got this right:

Rule: Gifted I-bonds only count against the recipient's limit in the year they are transferred to the recipient, not the year they are bought for the recipient (up to $10k/year per gift recipient from any TreasuryDirect account)

Strategy: Myself (Son) + Mom + Dad

My Treasury Direct Account:
2021 Nov: Buy $10k for my limit, Buy $10k gift for dad, Buy $10k gift for mom
2022 Jan: Buy $10k for my limit, Buy $10k gift for dad, Buy $10k gift for mom

Dad's Treasury Direct Account:
2021 Nov: Buy $10k for dad limit, Buy $10k gift for me (son), Buy $10k gift for mom
2022 Jan: Buy $10k for dad limit, Buy $10k gift for me (son), Buy $10k gift for mom

Mom's Treasury Direct Account:
2021 Nov: Buy $10k for mom limit, Buy $10k gift for me (son), Buy $10k gift for dad
2022 Jan: Buy $10k for mom limit, Buy $10k gift for me (son), Buy $10k gift for dad

This would get $180k invested starting at the November semi-annual rate. Because of the $10k recipient limit per year, this means the gifted I-bonds would have to be transferred over 4-years from 2023 to 2026 to the gift recipient's TreasuryDirect account assuming no other purchases were made from each TreasuryDirect account for the account holder themselves over this period, and the I-bond interest would accrue as normal in the gift box account in the interim.

Do I have the rules right here to potentially get in $180k at the November semi-annual rate (hypothetically)?
Since the folks are old, what would happen if there was a life event before the gift-box held I-bonds could be transferred to the recipient?

Thank you for the insights!
Just wanted to report back that I successfully executed on the 2021 portion of this plan this week and was able to frontload $90k in purchases across the 3 Treasurydirect accounts via the gift-each-other-transfer-later-method without issue. Will evaluate mid-next year whether to execute on the 2022 portion, but probably happy with keeping it at $90k we got this week so we can potentially liquidate all $90k in early 2023 (by transferring $30k in the gifts to each other next year, and the last $30k in early 2023).
Interesting, I had asked Treasury Direct about this and was told purchasing beyond the $10k annual individual limit as a gift would cause a violation if the individual had already purchased their own i-bond for $10k.

Where is the reference source for the Rule above that gift purchases count when transferred instead of purchased?

From reading the website FAQ initially, it sounded like gift purchases could sit in the "Gift Box" until delivered, which could be a future year. But Treasury Direct said it still counts against your purchase limit until the gift is delivered: "A gift bond purchase will count against the owners yearly limits and will cause a violation."

Please report back how this goes if you get any violation notices!
DVA79
Posts: 75
Joined: Sun Apr 06, 2014 1:06 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by DVA79 »

step-in-time wrote: Thu Oct 28, 2021 5:10 pm
RobotsRock wrote: Thu Oct 28, 2021 2:41 pm
RobotsRock wrote: Sat Oct 23, 2021 11:52 am I'm new to the I-bond world and the Treasury Direct world. I was trying to understand the rules around gifting I-bonds that would potentially allow front-loading more purchases, and wanted to make sure I got this right:

Rule: Gifted I-bonds only count against the recipient's limit in the year they are transferred to the recipient, not the year they are bought for the recipient (up to $10k/year per gift recipient from any TreasuryDirect account)

Strategy: Myself (Son) + Mom + Dad

My Treasury Direct Account:
2021 Nov: Buy $10k for my limit, Buy $10k gift for dad, Buy $10k gift for mom
2022 Jan: Buy $10k for my limit, Buy $10k gift for dad, Buy $10k gift for mom

Dad's Treasury Direct Account:
2021 Nov: Buy $10k for dad limit, Buy $10k gift for me (son), Buy $10k gift for mom
2022 Jan: Buy $10k for dad limit, Buy $10k gift for me (son), Buy $10k gift for mom

Mom's Treasury Direct Account:
2021 Nov: Buy $10k for mom limit, Buy $10k gift for me (son), Buy $10k gift for dad
2022 Jan: Buy $10k for mom limit, Buy $10k gift for me (son), Buy $10k gift for dad

This would get $180k invested starting at the November semi-annual rate. Because of the $10k recipient limit per year, this means the gifted I-bonds would have to be transferred over 4-years from 2023 to 2026 to the gift recipient's TreasuryDirect account assuming no other purchases were made from each TreasuryDirect account for the account holder themselves over this period, and the I-bond interest would accrue as normal in the gift box account in the interim.

Do I have the rules right here to potentially get in $180k at the November semi-annual rate (hypothetically)?
Since the folks are old, what would happen if there was a life event before the gift-box held I-bonds could be transferred to the recipient?

Thank you for the insights!
Just wanted to report back that I successfully executed on the 2021 portion of this plan this week and was able to frontload $90k in purchases across the 3 Treasurydirect accounts via the gift-each-other-transfer-later-method without issue. Will evaluate mid-next year whether to execute on the 2022 portion, but probably happy with keeping it at $90k we got this week so we can potentially liquidate all $90k in early 2023 (by transferring $30k in the gifts to each other next year, and the last $30k in early 2023).
Interesting, I had asked Treasury Direct about this and was told purchasing beyond the $10k annual individual limit as a gift would cause a violation if the individual had already purchased their own i-bond for $10k.

Where is the reference source for the Rule above that gift purchases count when transferred instead of purchased?

From reading the website FAQ initially, it sounded like gift purchases could sit in the "Gift Box" until delivered, which could be a future year. But Treasury Direct said it still counts against your purchase limit until the gift is delivered: "A gift bond purchase will count against the owners yearly limits and will cause a violation."

Please report back how this goes if you get any violation notices!
“ Do bonds I've bought as gifts through TreasuryDirect but have not yet delivered to the gift recipient apply against my annual limit?

No. Gift bonds are purchased in the name and SSN of the gift recipient. They do not count against your annual limit even if you have purchased them through your TreasuryDirect account but have not yet delivered them. Gift purchases in TreasuryDirect count toward the annual limit of the recipient in the year they are delivered.”

https://www.treasurydirect.gov/indiv/re ... .htm#gifts
csmath
Posts: 826
Joined: Sat Oct 13, 2018 11:32 am

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by csmath »

DVA79 wrote: Thu Oct 28, 2021 5:52 pm
step-in-time wrote: Thu Oct 28, 2021 5:10 pm
RobotsRock wrote: Thu Oct 28, 2021 2:41 pm
RobotsRock wrote: Sat Oct 23, 2021 11:52 am I'm new to the I-bond world and the Treasury Direct world. I was trying to understand the rules around gifting I-bonds that would potentially allow front-loading more purchases, and wanted to make sure I got this right:

Rule: Gifted I-bonds only count against the recipient's limit in the year they are transferred to the recipient, not the year they are bought for the recipient (up to $10k/year per gift recipient from any TreasuryDirect account)

Strategy: Myself (Son) + Mom + Dad

My Treasury Direct Account:
2021 Nov: Buy $10k for my limit, Buy $10k gift for dad, Buy $10k gift for mom
2022 Jan: Buy $10k for my limit, Buy $10k gift for dad, Buy $10k gift for mom

Dad's Treasury Direct Account:
2021 Nov: Buy $10k for dad limit, Buy $10k gift for me (son), Buy $10k gift for mom
2022 Jan: Buy $10k for dad limit, Buy $10k gift for me (son), Buy $10k gift for mom

Mom's Treasury Direct Account:
2021 Nov: Buy $10k for mom limit, Buy $10k gift for me (son), Buy $10k gift for dad
2022 Jan: Buy $10k for mom limit, Buy $10k gift for me (son), Buy $10k gift for dad

This would get $180k invested starting at the November semi-annual rate. Because of the $10k recipient limit per year, this means the gifted I-bonds would have to be transferred over 4-years from 2023 to 2026 to the gift recipient's TreasuryDirect account assuming no other purchases were made from each TreasuryDirect account for the account holder themselves over this period, and the I-bond interest would accrue as normal in the gift box account in the interim.

Do I have the rules right here to potentially get in $180k at the November semi-annual rate (hypothetically)?
Since the folks are old, what would happen if there was a life event before the gift-box held I-bonds could be transferred to the recipient?

Thank you for the insights!
Just wanted to report back that I successfully executed on the 2021 portion of this plan this week and was able to frontload $90k in purchases across the 3 Treasurydirect accounts via the gift-each-other-transfer-later-method without issue. Will evaluate mid-next year whether to execute on the 2022 portion, but probably happy with keeping it at $90k we got this week so we can potentially liquidate all $90k in early 2023 (by transferring $30k in the gifts to each other next year, and the last $30k in early 2023).
Interesting, I had asked Treasury Direct about this and was told purchasing beyond the $10k annual individual limit as a gift would cause a violation if the individual had already purchased their own i-bond for $10k.

Where is the reference source for the Rule above that gift purchases count when transferred instead of purchased?

From reading the website FAQ initially, it sounded like gift purchases could sit in the "Gift Box" until delivered, which could be a future year. But Treasury Direct said it still counts against your purchase limit until the gift is delivered: "A gift bond purchase will count against the owners yearly limits and will cause a violation."

Please report back how this goes if you get any violation notices!
“ Do bonds I've bought as gifts through TreasuryDirect but have not yet delivered to the gift recipient apply against my annual limit?

No. Gift bonds are purchased in the name and SSN of the gift recipient. They do not count against your annual limit even if you have purchased them through your TreasuryDirect account but have not yet delivered them. Gift purchases in TreasuryDirect count toward the annual limit of the recipient in the year they are delivered.”

https://www.treasurydirect.gov/indiv/re ... .htm#gifts
This really doesn't smell right or I'd imagine it would be a widely used strategy. Without understanding what determines the "year they are delivered" I see why it may appear to be possible to buy now, enjoy the growth and "deliver" them in a future year. I just don't think the powers that be would agree. I could be wrong.
DVA79
Posts: 75
Joined: Sun Apr 06, 2014 1:06 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by DVA79 »

csmath wrote: Thu Oct 28, 2021 7:27 pm
DVA79 wrote: Thu Oct 28, 2021 5:52 pm
step-in-time wrote: Thu Oct 28, 2021 5:10 pm
RobotsRock wrote: Thu Oct 28, 2021 2:41 pm
RobotsRock wrote: Sat Oct 23, 2021 11:52 am I'm new to the I-bond world and the Treasury Direct world. I was trying to understand the rules around gifting I-bonds that would potentially allow front-loading more purchases, and wanted to make sure I got this right:

Rule: Gifted I-bonds only count against the recipient's limit in the year they are transferred to the recipient, not the year they are bought for the recipient (up to $10k/year per gift recipient from any TreasuryDirect account)

Strategy: Myself (Son) + Mom + Dad

My Treasury Direct Account:
2021 Nov: Buy $10k for my limit, Buy $10k gift for dad, Buy $10k gift for mom
2022 Jan: Buy $10k for my limit, Buy $10k gift for dad, Buy $10k gift for mom

Dad's Treasury Direct Account:
2021 Nov: Buy $10k for dad limit, Buy $10k gift for me (son), Buy $10k gift for mom
2022 Jan: Buy $10k for dad limit, Buy $10k gift for me (son), Buy $10k gift for mom

Mom's Treasury Direct Account:
2021 Nov: Buy $10k for mom limit, Buy $10k gift for me (son), Buy $10k gift for dad
2022 Jan: Buy $10k for mom limit, Buy $10k gift for me (son), Buy $10k gift for dad

This would get $180k invested starting at the November semi-annual rate. Because of the $10k recipient limit per year, this means the gifted I-bonds would have to be transferred over 4-years from 2023 to 2026 to the gift recipient's TreasuryDirect account assuming no other purchases were made from each TreasuryDirect account for the account holder themselves over this period, and the I-bond interest would accrue as normal in the gift box account in the interim.

Do I have the rules right here to potentially get in $180k at the November semi-annual rate (hypothetically)?
Since the folks are old, what would happen if there was a life event before the gift-box held I-bonds could be transferred to the recipient?

Thank you for the insights!
Just wanted to report back that I successfully executed on the 2021 portion of this plan this week and was able to frontload $90k in purchases across the 3 Treasurydirect accounts via the gift-each-other-transfer-later-method without issue. Will evaluate mid-next year whether to execute on the 2022 portion, but probably happy with keeping it at $90k we got this week so we can potentially liquidate all $90k in early 2023 (by transferring $30k in the gifts to each other next year, and the last $30k in early 2023).
Interesting, I had asked Treasury Direct about this and was told purchasing beyond the $10k annual individual limit as a gift would cause a violation if the individual had already purchased their own i-bond for $10k.

Where is the reference source for the Rule above that gift purchases count when transferred instead of purchased?

From reading the website FAQ initially, it sounded like gift purchases could sit in the "Gift Box" until delivered, which could be a future year. But Treasury Direct said it still counts against your purchase limit until the gift is delivered: "A gift bond purchase will count against the owners yearly limits and will cause a violation."

Please report back how this goes if you get any violation notices!
“ Do bonds I've bought as gifts through TreasuryDirect but have not yet delivered to the gift recipient apply against my annual limit?

No. Gift bonds are purchased in the name and SSN of the gift recipient. They do not count against your annual limit even if you have purchased them through your TreasuryDirect account but have not yet delivered them. Gift purchases in TreasuryDirect count toward the annual limit of the recipient in the year they are delivered.”

https://www.treasurydirect.gov/indiv/re ... .htm#gifts
This really doesn't smell right or I'd imagine it would be a widely used strategy. Without understanding what determines the "year they are delivered" I see why it may appear to be possible to buy now, enjoy the growth and "deliver" them in a future year. I just don't think the powers that be would agree. I could be wrong.
Not much to interpret- language is straight forward. They can stay in gift box indefinitely (no time frame given) as long as they get delivered at some point before maturity. I have done this myself. Basically front loading the 10k as a gift while delivering them in a future year in which the receiver made no i-bond purchases in order to stay in compliance with the rules.
csmath
Posts: 826
Joined: Sat Oct 13, 2018 11:32 am

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by csmath »

DVA79 wrote: Thu Oct 28, 2021 8:15 pm Not much to interpret- language is straight forward. They can stay in gift box indefinitely (no time frame given) as long as they get delivered at some point before maturity. I have done this myself. Basically front loading the 10k as a gift while delivering them in a future year in which the receiver made no i-bond purchases in order to stay in compliance with the rules.
Cool. I guess I'm shocked I missed this discussed before, especially recently with all of the hype around them right now.
step-in-time
Posts: 41
Joined: Tue May 24, 2016 11:14 am

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by step-in-time »

csmath wrote: Thu Oct 28, 2021 9:13 pm
DVA79 wrote: Thu Oct 28, 2021 8:15 pm Not much to interpret- language is straight forward. They can stay in gift box indefinitely (no time frame given) as long as they get delivered at some point before maturity. I have done this myself. Basically front loading the 10k as a gift while delivering them in a future year in which the receiver made no i-bond purchases in order to stay in compliance with the rules.
Cool. I guess I'm shocked I missed this discussed before, especially recently with all of the hype around them right now.
I don't understand why Treasury Direct told me it'd be a violation to do this. But if you've done this before without any violations, that's helpful to know.
User avatar
anon_investor
Posts: 15122
Joined: Mon Jun 03, 2019 1:43 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by anon_investor »

step-in-time wrote: Fri Oct 29, 2021 11:16 am
csmath wrote: Thu Oct 28, 2021 9:13 pm
DVA79 wrote: Thu Oct 28, 2021 8:15 pm Not much to interpret- language is straight forward. They can stay in gift box indefinitely (no time frame given) as long as they get delivered at some point before maturity. I have done this myself. Basically front loading the 10k as a gift while delivering them in a future year in which the receiver made no i-bond purchases in order to stay in compliance with the rules.
Cool. I guess I'm shocked I missed this discussed before, especially recently with all of the hype around them right now.
I don't understand why Treasury Direct told me it'd be a violation to do this. But if you've done this before without any violations, that's helpful to know.
Were you trying to buy them under your name/SSN or the name/SSN of the person you wanted to gift to?
step-in-time
Posts: 41
Joined: Tue May 24, 2016 11:14 am

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by step-in-time »

anon_investor wrote: Fri Oct 29, 2021 11:21 am
step-in-time wrote: Fri Oct 29, 2021 11:16 am
csmath wrote: Thu Oct 28, 2021 9:13 pm
DVA79 wrote: Thu Oct 28, 2021 8:15 pm Not much to interpret- language is straight forward. They can stay in gift box indefinitely (no time frame given) as long as they get delivered at some point before maturity. I have done this myself. Basically front loading the 10k as a gift while delivering them in a future year in which the receiver made no i-bond purchases in order to stay in compliance with the rules.
Cool. I guess I'm shocked I missed this discussed before, especially recently with all of the hype around them right now.
I don't understand why Treasury Direct told me it'd be a violation to do this. But if you've done this before without any violations, that's helpful to know.
Were you trying to buy them under your name/SSN or the name/SSN of the person you wanted to gift to?
The gift purchase would be for the person to be gifted (not my own name/SSN). Have you had success this approach too? Maybe Treasury Direct gave me wrong info. I emailed them this question, hadn't tried it yet. My preference was to confirm in advance rather than potentially run afoul of any rules.
calwatch
Posts: 1447
Joined: Wed Oct 02, 2013 1:48 am

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by calwatch »

calwatch wrote: Tue Oct 26, 2021 7:23 pm I use Marcus as my linked bank on Treasury Direct and funds are available October 29, after I initiated a deposit on Monday. The funds were debited from the source accounts that day. Will the funds clear by the time TD pulls the money out, should I buy my bonds on October 29?
Thought I should mention that Marcus cleared the hold at midnight Eastern this morning, in time for TD to successfully deduct for my purchase of October I Bonds for my sole proprietorship account.
User avatar
anon_investor
Posts: 15122
Joined: Mon Jun 03, 2019 1:43 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by anon_investor »

step-in-time wrote: Fri Oct 29, 2021 11:27 am
anon_investor wrote: Fri Oct 29, 2021 11:21 am
step-in-time wrote: Fri Oct 29, 2021 11:16 am
csmath wrote: Thu Oct 28, 2021 9:13 pm
DVA79 wrote: Thu Oct 28, 2021 8:15 pm Not much to interpret- language is straight forward. They can stay in gift box indefinitely (no time frame given) as long as they get delivered at some point before maturity. I have done this myself. Basically front loading the 10k as a gift while delivering them in a future year in which the receiver made no i-bond purchases in order to stay in compliance with the rules.
Cool. I guess I'm shocked I missed this discussed before, especially recently with all of the hype around them right now.
I don't understand why Treasury Direct told me it'd be a violation to do this. But if you've done this before without any violations, that's helpful to know.
Were you trying to buy them under your name/SSN or the name/SSN of the person you wanted to gift to?
The gift purchase would be for the person to be gifted (not my own name/SSN). Have you had success this approach too? Maybe Treasury Direct gave me wrong info. I emailed them this question, hadn't tried it yet. My preference was to confirm in advance rather than potentially run afoul of any rules.
The gift purchase indeed should use the receipient's names/SSN. I have not made a gift purchase yet, but had considered it. Now I am confused as well.
SnowBog
Posts: 4699
Joined: Fri Dec 21, 2018 10:21 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by SnowBog »

anon_investor wrote: Fri Oct 29, 2021 12:24 pm
step-in-time wrote: Fri Oct 29, 2021 11:27 am
anon_investor wrote: Fri Oct 29, 2021 11:21 am
step-in-time wrote: Fri Oct 29, 2021 11:16 am
csmath wrote: Thu Oct 28, 2021 9:13 pm

Cool. I guess I'm shocked I missed this discussed before, especially recently with all of the hype around them right now.
I don't understand why Treasury Direct told me it'd be a violation to do this. But if you've done this before without any violations, that's helpful to know.
Were you trying to buy them under your name/SSN or the name/SSN of the person you wanted to gift to?
The gift purchase would be for the person to be gifted (not my own name/SSN). Have you had success this approach too? Maybe Treasury Direct gave me wrong info. I emailed them this question, hadn't tried it yet. My preference was to confirm in advance rather than potentially run afoul of any rules.
The gift purchase indeed should use the receipient's names/SSN. I have not made a gift purchase yet, but had considered it. Now I am confused as well.
My interpretation has been this only works if you are trying to front load purchases, and will have stopped purchases before delivering the gifts. (Or more specifically, the gift recipient has stopped purchases, as they can't have more than $10k purchased/gifted in the same year.)

For example, if you want $120k of I Bonds for a couple, you could buy 6 years at $20k ($10k each) or 3 years at $20k + $20k as gifts to each other, which are delivered over years 4 - 6 (the same as you would have otherwise purchased and now aren't, or later if you want to delay).

I've thought about it, but have currently decided against it. In part because we are buying extra through living trusts, so we've scratched that itch. But also because it shortens the duration of the bonds - instead of having them for a rolling 30 year period, you'll have extra bunched up and expiring together.

Now, if fixed rates were higher, like if we had an unexpected 1% fixed rate - then I'd be much more interested...
aklanche
Posts: 73
Joined: Wed Jul 17, 2019 9:01 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by aklanche »

I look at my mortgage (currently at 2.5%) as a negative bond. Any relatively risk free fixed income rates I can get above that as part of my desired AA for bonds/cash (cash is at HMBradley at 3.5% as of late) atleast up to the balance of the mortgage as a win. Is its yield chasing?? Sure to some degree, but I basically have been using that as my baseline for what I can get for risk free return on my $$$. So iBonds even at 3.54% that its been at this past 6 months is a win for me. Plus after a year its still more liquid than putting the extra $$$ towards the mortgage. Even after my wife and I max out 2021 and 2022 for iBonds (I like to make it like an apple product ;) ) the iBonds would still make up less than 5% of our bond allocation, so yes not a tremendous move of the needle sure, but one could say the same thing that my wife doing her $6K in Jan of 2022 into a BDR won't move the needle on the equities portion of our AA, but yet we will still do that too.

Being as I am less than 5 years from retirement I don't plan to sell them until after we drop down the tax bracket rung a bit if I were to unload them. For me it works an it only took less than 20 minutes for my wife and I to set up both our TD accounts and purchase our iBonds. After reading this thread apparently we got lucky, but even if the medallion signature was required I would still go through with it. 2022 iBond purchases should take less than 5 mins each given we have our accounts setup and know the process. I certainly don't feel that the clunky TD website all that bad to work with, but hey I have my IRA at Vanguard so I'm used to clunky. ;)
User avatar
dougger5
Posts: 480
Joined: Fri Nov 27, 2015 10:58 am
Location: Not far from Malvern

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by dougger5 »

Well, I just said "Goodbye" to $10k for a year.

I had come around to the logic of buying at the end of October to get both the current 3.54% and then 7.12% 6 months later. Alas - I was a day late making the purchase. Put in the order this past Friday, but the issue date is 1 Nov. But still I do not despair.

I look at it as sort of like a 5 year CD (aside from the 1-year lock-up), and in fact I redeemed a CD to fund it. So it's kind of another tier of our EF. Starting 365 days from now anyway :happy
"I've been ionized, but I'm okay now." -Buckaroo Banzai
SnowBog
Posts: 4699
Joined: Fri Dec 21, 2018 10:21 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by SnowBog »

aklanche wrote: Sun Oct 31, 2021 2:03 pm After reading this thread apparently we got lucky, but even if the medallion signature was required I would still go through with it. 2022 iBond purchases should take less than 5 mins each given we have our accounts setup and know the process. I certainly don't feel that the clunky TD website all that bad to work with, but hey I have my IRA at Vanguard so I'm used to clunky. ;)
For my two cents - I don't think you got "lucky". I think your experience is what the vast silent majority experience.
Stubbie
Posts: 207
Joined: Fri May 29, 2020 6:09 am

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Stubbie »

SnowBog wrote: Sun Oct 31, 2021 4:15 pm
aklanche wrote: Sun Oct 31, 2021 2:03 pm After reading this thread apparently we got lucky, but even if the medallion signature was required I would still go through with it. 2022 iBond purchases should take less than 5 mins each given we have our accounts setup and know the process. I certainly don't feel that the clunky TD website all that bad to work with, but hey I have my IRA at Vanguard so I'm used to clunky. ;)
For my two cents - I don't think you got "lucky". I think your experience is what the vast silent majority experience.
Agree. The setup of our 2 accounts could not have gone smoother.
User avatar
anon_investor
Posts: 15122
Joined: Mon Jun 03, 2019 1:43 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by anon_investor »

Stubbie wrote: Mon Nov 01, 2021 7:07 am
SnowBog wrote: Sun Oct 31, 2021 4:15 pm
aklanche wrote: Sun Oct 31, 2021 2:03 pm After reading this thread apparently we got lucky, but even if the medallion signature was required I would still go through with it. 2022 iBond purchases should take less than 5 mins each given we have our accounts setup and know the process. I certainly don't feel that the clunky TD website all that bad to work with, but hey I have my IRA at Vanguard so I'm used to clunky. ;)
For my two cents - I don't think you got "lucky". I think your experience is what the vast silent majority experience.
Agree. The setup of our 2 accounts could not have gone smoother.
+1. We opened when you could add additional bank accounts. Both of our accounts were locked later after adding multiple bank accounts, but both were unlocked via phone (no paper form with signature guarantee required).
Monkeyseeanddo
Posts: 18
Joined: Sat Oct 21, 2017 4:58 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Monkeyseeanddo »

When will the new I-bonds rate show on the Treasury Direct website? It’s still showing the old rate.
User avatar
billthecat
Posts: 1052
Joined: Tue Jan 24, 2017 1:50 pm
Location: USA

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by billthecat »

Monkeyseeanddo wrote: Mon Nov 01, 2021 8:47 am When will the new I-bonds rate show on the Treasury Direct website? It’s still showing the old rate.
10 am eastern. 7.12%.
We cannot direct the winds but we can adjust our sails • It's later than you think • Ack! Thbbft!
fsrph
Posts: 1610
Joined: Sun Jul 26, 2009 7:54 pm
Location: Pa.

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by fsrph »

billthecat wrote: Mon Nov 01, 2021 9:03 am
Monkeyseeanddo wrote: Mon Nov 01, 2021 8:47 am When will the new I-bonds rate show on the Treasury Direct website? It’s still showing the old rate.
10 am eastern. 7.12%.
The fixed rate remains at 0%.

https://www.treasurydirect.gov/indiv/re ... dterms.htm

Francis
"Success is getting what you want. Happiness is wanting what you get." | Dale Carnegie
Monkeyseeanddo
Posts: 18
Joined: Sat Oct 21, 2017 4:58 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Monkeyseeanddo »

Thanks to both PPs!
Whakamole
Posts: 1765
Joined: Wed Jan 13, 2016 8:59 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Whakamole »

I know the Treasury calculator can be a bit wonky. Some questions now that the interest rate has changed:

I updated the calculator this morning, and noticed that:
- bonds bought in October 2001 still have an old interest rate of 6.59%; these bonds have a fixed rate of ~3%.
- bonds bought in May or November have an interest rate of "NA"

What's going on? Should I trust the total value of my holdings that the calculator is giving me?
User avatar
anon_investor
Posts: 15122
Joined: Mon Jun 03, 2019 1:43 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by anon_investor »

fsrph wrote: Mon Nov 01, 2021 9:06 am
billthecat wrote: Mon Nov 01, 2021 9:03 am
Monkeyseeanddo wrote: Mon Nov 01, 2021 8:47 am When will the new I-bonds rate show on the Treasury Direct website? It’s still showing the old rate.
10 am eastern. 7.12%.
The fixed rate remains at 0%.

https://www.treasurydirect.gov/indiv/re ... dterms.htm

Francis
As expected.
User avatar
ApeAttack
Posts: 915
Joined: Wed Dec 23, 2020 7:28 pm
Location: Gorillatown, USA

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by ApeAttack »

Christmas morning is finally here for I-Bond lovers. See you all again in January when I can purchase more.
May all your index funds gain +0.5% today.
MotoTrojan
Posts: 11259
Joined: Wed Feb 01, 2017 7:39 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by MotoTrojan »

Bought my 1st lot of $10K last week, feel like a real boomer now.
tashnewbie
Posts: 4283
Joined: Thu Apr 23, 2020 12:44 pm

Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by tashnewbie »

Whakamole wrote: Mon Nov 01, 2021 10:19 am I know the Treasury calculator can be a bit wonky. Some questions now that the interest rate has changed:

I updated the calculator this morning, and noticed that:
- bonds bought in October 2001 still have an old interest rate of 6.59%; these bonds have a fixed rate of ~3%.
- bonds bought in May or November have an interest rate of "NA"

What's going on? Should I trust the total value of my holdings that the calculator is giving me?
If a bond was purchased in October, I think the rate wouldn't adjust until April. You'd get the November 2021 variable rate from April 2022 through September 2022.
Post Reply