I Bonds Mega Thread (I Bond Heads Rejoice!)

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mangorunner
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Re: I Bonds variable rate @ 3.54% in May

Post by mangorunner »

RedDog wrote: Wed Apr 14, 2021 3:40 pm I bought both DW’s and my maximum allocation in January for one reason...my asset allocation said to buy bonds.
What are DWs? (I presume it's not dishwashers. :D )
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Re: I Bonds variable rate @ 3.54% in May

Post by LittleMaggieMae »

mangorunner wrote: Mon Jun 21, 2021 7:24 pm
RedDog wrote: Wed Apr 14, 2021 3:40 pm I bought both DW’s and my maximum allocation in January for one reason...my asset allocation said to buy bonds.
What are DWs? (I presume it's not dishwashers. :D )
DW = Dear Wife
DH = Dear Husband
DS,DS1, DS2 = Dear Son, Dear Son #1, Dear Son #2 -- in a very few cases it means Dear Spouse you have to figure it out from context.
DD,DD1, DD2 = Dear Daughter Dear Daughter#1, Dear Daughter #2
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Re: I Bonds variable rate @ 3.54% in May

Post by Mel Lindauer »

LittleMaggieMae wrote: Mon Jun 21, 2021 7:39 pm
mangorunner wrote: Mon Jun 21, 2021 7:24 pm
RedDog wrote: Wed Apr 14, 2021 3:40 pm I bought both DW’s and my maximum allocation in January for one reason...my asset allocation said to buy bonds.
What are DWs? (I presume it's not dishwashers. :D )
DW = Dear Wife
DH = Dear Husband
DS,DS1, DS2 = Dear Son, Dear Son #1, Dear Son #2 -- in a very few cases it means Dear Spouse you have to figure it out from context.
DD,DD1, DD2 = Dear Daughter Dear Daughter#1, Dear Daughter #2
And add SO = Significant Other
Best Regards - Mel | | Semper Fi
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Mel Lindauer
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Re: I Bonds variable rate @ 3.54% in May

Post by Mel Lindauer »

tomsense76 wrote: Mon Jun 21, 2021 7:14 pm
Mel Lindauer wrote: Mon Jun 21, 2021 7:05 pm
mangorunner wrote: Mon Jun 21, 2021 6:28 pm
bhtomj wrote: Wed Apr 14, 2021 12:36 am Buying now just means you wait until October for the new rate. IMO, it's better to buy now to get the clock started on a good (current) rate and the 1 year holding period.
I don't understand your April 2021 comment - why would purchasing bonds in April have meant you wait for the October rate? (I'm very new with I-bonds and working very hard to grasp all of the nuances. Thanks!)
Because you would have gotten the rate that was in effect in April for the first six months and then when you bought in October, you'd get the rate that was in effect from May thru October for the next six months.
Yeah this table might help: https://www.treasurydirect.gov/indiv/re ... htm#change

For example I bought some last December (didn't quite make it November), which have just now reset. Also have some from January that reset next month

Feel free to correct me if I read that wrong Mel :)
Your link explains it perfectly.
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Re: I Bonds variable rate @ 3.54% in May

Post by #Cruncher »

mangorunner wrote: Mon Jun 21, 2021 6:28 pm
bhtomj wrote: Wed Apr 14, 2021 12:36 am Buying now just means you wait until October for the new rate. ...
I don't understand your April 2021 comment - why would purchasing bonds in April have meant you wait for the October rate? ...
The composite rate that I Bonds earn each six-month period is the combination of the following two rates which are announced the first business day every May and November:
  • The Fixed Rate that was in effect when you purchased. It never changes.
  • The Inflation Rate that is in effect on every six-month "anniversary" of your purchase. It only applies for the next six months.
Generally the composite rate is just the sum of the fixed rate and the inflation rate (both on an annualized basis). [1] Here is an illustration of this for four I Bond purchases: April / May 2021 and April / May 2020. In both cases you can see that an April purchase still gets a composite rate based on the Inflation Rate announced in May -- just not until the following October.

For the 2021 case, the fixed rate was the same for April and May purchases. I included the 2020 case to show this isn't always so. The April 2020 purchase got the 0.2% fixed rate announced November 2019, but a purchase one month later got only the 0.0% fixed rate announced May 2020. [2]

Code: Select all

               ---- Rates ----
                          Semi
                        Annual
 Announced     Fixed Inflation
  Nov 2019     0.20%     1.01%
  May 2020     0.00%     0.53%
  Nov 2020     0.00%     0.84%
  May 2021     0.00%     1.77%

    Bought  Apr 2021  May 2021    Apr 2020  May 2020
Fixed Rate     0.00%     0.00%       0.20%     0.00%
            ------------ Composite Rate ------------

Code: Select all

  Apr 2020                           2.22%          
  May 2020                             |       1.06%
  Jun 2020                             |         |  
  Jul 2020                             |         |  
  Aug 2020                             |         |  
  Sep 2020                             v         |  
  Oct 2020                           1.26%       v  
  Nov 2020                             |       1.68%
  Dec 2020                             |         |  
  Jan 2021                             |         |  
  Feb 2021                             |         |  
  Mar 2021                             v         |  
  Apr 2021     1.68%                 1.88%       v  
  May 2021       |       3.54%         |       3.54%
  Jun 2021       |         |           |         |  
  Jul 2021       |         |           |         |  
  Aug 2021       |         |           |         |  
  Sep 2021       v         |           v         |  
  Oct 2021     3.54%       v         3.74%       v  
  Nov 2021       |                     |
  Dec 2021       |                     |
  Jan 2022       |                     |
  Feb 2022       |                     |
  Mar 2022       v                     v
  1. The actual composite rate formula is
    Composite Rate = Fixed Rate + 2 X Inflation Rate + Fixed Rate X Inflation Rate
    But if the fixed rate is small, the last term gets truncated due to rounding.
    (See Combining the two rates for more.)
  2. For every fixed rate and semi-annual inflation rate, see What have rates been in the past?.
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Re: I Bonds variable rate @ 3.54% in May

Post by Bulgogi Head »

From reading the thread, it sounds like I won’t see any interest in TD until after month 3 (because of the 3-month penalty)?
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Re: I Bonds variable rate @ 3.54% in May

Post by tomsense76 »

Bulgogi Head wrote: Tue Jun 22, 2021 7:25 pm From reading the thread, it sounds like I won’t see any interest in TD until after month 3 (because of the 3-month penalty)?
Not sure I follow the question. The first 12 months the money is locked up (like a CD). One still gets interest during that 12 month period

Is the plan you are considering to then cash in the I Bonds after 12 months? If so, one would only get 9 months of interest due to the 3 month penalty (though others should feel free to correct me)
"Anyone who claims to understand quantum theory is either lying or crazy" -- Richard Feynman
Bulgogi Head
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Re: I Bonds variable rate @ 3.54% in May

Post by Bulgogi Head »

tomsense76 wrote: Tue Jun 22, 2021 8:29 pm
Bulgogi Head wrote: Tue Jun 22, 2021 7:25 pm From reading the thread, it sounds like I won’t see any interest in TD until after month 3 (because of the 3-month penalty)?
Not sure I follow the question. The first 12 months the money is locked up (like a CD). One still gets interest during that 12 month period

Is the plan you are considering to then cash in the I Bonds after 12 months? If so, one would only get 9 months of interest due to the 3 month penalty (though others should feel free to correct me)
I suppose my question is how TD handles the 3-month penalty for cashing out before 5 years. Does TD withhold the first 3 months of interest, and then give that interest at the 5 year mark?
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Re: I Bonds variable rate @ 3.54% in May

Post by tim1999 »

mangorunner wrote: Mon Jun 21, 2021 7:24 pm
RedDog wrote: Wed Apr 14, 2021 3:40 pm I bought both DW’s and my maximum allocation in January for one reason...my asset allocation said to buy bonds.
What are DWs? (I presume it's not dishwashers. :D )
We actually had an entire thread on this.

viewtopic.php?t=341141
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tomsense76
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Re: I Bonds variable rate @ 3.54% in May

Post by tomsense76 »

Bulgogi Head wrote: Tue Jun 22, 2021 9:20 pm
tomsense76 wrote: Tue Jun 22, 2021 8:29 pm
Bulgogi Head wrote: Tue Jun 22, 2021 7:25 pm From reading the thread, it sounds like I won’t see any interest in TD until after month 3 (because of the 3-month penalty)?
Not sure I follow the question. The first 12 months the money is locked up (like a CD). One still gets interest during that 12 month period

Is the plan you are considering to then cash in the I Bonds after 12 months? If so, one would only get 9 months of interest due to the 3 month penalty (though others should feel free to correct me)
I suppose my question is how TD handles the 3-month penalty for cashing out before 5 years. Does TD withhold the first 3 months of interest, and then give that interest at the 5 year mark?
They say the last 3months of interest is withheld ( https://treasurydirect.gov/indiv/resear ... m.htm#when ). So one would compute the interest all the way up to 3months prior to the redemption
"Anyone who claims to understand quantum theory is either lying or crazy" -- Richard Feynman
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Re: I Bonds variable rate @ 3.54% in May

Post by anon_investor »

tomsense76 wrote: Tue Jun 22, 2021 9:39 pm
Bulgogi Head wrote: Tue Jun 22, 2021 9:20 pm
tomsense76 wrote: Tue Jun 22, 2021 8:29 pm
Bulgogi Head wrote: Tue Jun 22, 2021 7:25 pm From reading the thread, it sounds like I won’t see any interest in TD until after month 3 (because of the 3-month penalty)?
Not sure I follow the question. The first 12 months the money is locked up (like a CD). One still gets interest during that 12 month period

Is the plan you are considering to then cash in the I Bonds after 12 months? If so, one would only get 9 months of interest due to the 3 month penalty (though others should feel free to correct me)
I suppose my question is how TD handles the 3-month penalty for cashing out before 5 years. Does TD withhold the first 3 months of interest, and then give that interest at the 5 year mark?
They say the last 3months of interest is withheld ( https://treasurydirect.gov/indiv/resear ... m.htm#when ). So one would compute the interest all the way up to 3months prior to the redemption
The balance that TD shows is what you would get if redeemed. No guess work (TD doesn't show the interest that you would lose if you redeemed early, which is the 3 more recent months).
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Re: I Bonds variable rate @ 3.54% in May

Post by Mel Lindauer »

And at the five-year mark, you'll see a big increase since they'll show ALL of the interest without the last three months being withheld. You'll think you hit the jackpot! :D
Best Regards - Mel | | Semper Fi
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Re: I Bonds variable rate @ 3.54% in May

Post by anon_investor »

Mel Lindauer wrote: Wed Jun 23, 2021 12:18 am And at the five-year mark, you'll see a big increase since they'll show ALL of the interest without the last three months being withheld. You'll think you hit the jackpot! :D
Not as much as the jump someone holding EE Bonds will see at the 20 year mark!
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Re: I Bonds variable rate @ 3.54% in May

Post by Mel Lindauer »

anon_investor wrote: Wed Jun 23, 2021 12:19 am
Mel Lindauer wrote: Wed Jun 23, 2021 12:18 am And at the five-year mark, you'll see a big increase since they'll show ALL of the interest without the last three months being withheld. You'll think you hit the jackpot! :D
Not as much as the jump someone holding EE Bonds will see at the 20 year mark!
Yes, that's for sure! Twenty years is the magic doubling year for EE Bonds.
Best Regards - Mel | | Semper Fi
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Re: I Bonds variable rate @ 3.54% in May

Post by phantom0308 »

mangorunner wrote: Mon Jun 21, 2021 7:24 pm
RedDog wrote: Wed Apr 14, 2021 3:40 pm I bought both DW’s and my maximum allocation in January for one reason...my asset allocation said to buy bonds.
What are DWs? (I presume it's not dishwashers. :D )
Am I the only one who has been making Roth IRA contributions for my Whirlpool? I haven’t found the mega backdoor on it yet.
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Re: I Bonds variable rate @ 3.54% in May

Post by Mel Lindauer »

phantom0308 wrote: Wed Jun 23, 2021 1:47 am
mangorunner wrote: Mon Jun 21, 2021 7:24 pm
RedDog wrote: Wed Apr 14, 2021 3:40 pm I bought both DW’s and my maximum allocation in January for one reason...my asset allocation said to buy bonds.
What are DWs? (I presume it's not dishwashers. :D )
Am I the only one who has been making Roth IRA contributions for my Whirlpool? I haven’t found the mega backdoor on it yet.
You're looking in the wrong place. The door is either on the front or the top, not the back. :D
Best Regards - Mel | | Semper Fi
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Re: I Bonds variable rate @ 3.54% in May

Post by HueyLD »

I would like to thank Mel for introducing me to I bond investment.

I was aware of I bonds, but never considered them for my portfolio. However, Mel’s comments and recommendations gave me motivation to learn about I bonds.
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Re: I Bonds variable rate @ 3.54% in May

Post by Bulgogi Head »

anon_investor wrote: Tue Jun 22, 2021 10:22 pm
tomsense76 wrote: Tue Jun 22, 2021 9:39 pm
Bulgogi Head wrote: Tue Jun 22, 2021 9:20 pm
tomsense76 wrote: Tue Jun 22, 2021 8:29 pm
Bulgogi Head wrote: Tue Jun 22, 2021 7:25 pm From reading the thread, it sounds like I won’t see any interest in TD until after month 3 (because of the 3-month penalty)?
Not sure I follow the question. The first 12 months the money is locked up (like a CD). One still gets interest during that 12 month period

Is the plan you are considering to then cash in the I Bonds after 12 months? If so, one would only get 9 months of interest due to the 3 month penalty (though others should feel free to correct me)
I suppose my question is how TD handles the 3-month penalty for cashing out before 5 years. Does TD withhold the first 3 months of interest, and then give that interest at the 5 year mark?
They say the last 3months of interest is withheld ( https://treasurydirect.gov/indiv/resear ... m.htm#when ). So one would compute the interest all the way up to 3months prior to the redemption
The balance that TD shows is what you would get if redeemed. No guess work (TD doesn't show the interest that you would lose if you redeemed early, which is the 3 more recent months).
Thank you! From the link above I think I figured out why my ibonds still show the original balance. It looks like I won’t see the balance change until 6 months in.
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Re: I Bonds variable rate @ 3.54% in May

Post by anon_investor »

Bulgogi Head wrote: Wed Jun 23, 2021 1:46 pm
anon_investor wrote: Tue Jun 22, 2021 10:22 pm
tomsense76 wrote: Tue Jun 22, 2021 9:39 pm
Bulgogi Head wrote: Tue Jun 22, 2021 9:20 pm
tomsense76 wrote: Tue Jun 22, 2021 8:29 pm

Not sure I follow the question. The first 12 months the money is locked up (like a CD). One still gets interest during that 12 month period

Is the plan you are considering to then cash in the I Bonds after 12 months? If so, one would only get 9 months of interest due to the 3 month penalty (though others should feel free to correct me)
I suppose my question is how TD handles the 3-month penalty for cashing out before 5 years. Does TD withhold the first 3 months of interest, and then give that interest at the 5 year mark?
They say the last 3months of interest is withheld ( https://treasurydirect.gov/indiv/resear ... m.htm#when ). So one would compute the interest all the way up to 3months prior to the redemption
The balance that TD shows is what you would get if redeemed. No guess work (TD doesn't show the interest that you would lose if you redeemed early, which is the 3 more recent months).
Thank you! From the link above I think I figured out why my ibonds still show the original balance. It looks like I won’t see the balance change until 6 months in.
No, you will see the balance change after 3 months. So if you bought in May, you will have to wait until August 1 to see the change.
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Re: I Bonds variable rate @ 3.54% in May

Post by Mel Lindauer »

HueyLD wrote: Wed Jun 23, 2021 1:23 pm I would like to thank Mel for introducing me to I bond investment.

I was aware of I bonds, but never considered them for my portfolio. However, Mel’s comments and recommendations gave me motivation to learn about I bonds.
Hopefully you got a truckload of those good old I Bonds with fixed rates from 3.0% all the way up to 3.6%. Those babies are now paying in the high 6% to over 7% range. :moneybag :moneybag
Best Regards - Mel | | Semper Fi
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Re: I Bonds variable rate @ 3.54% in May

Post by maywood »

Some of my I bonds finally jumped to 7.0% since my earliest ones were purchased February 2001.

I made a note in my planner in mid-October to calculate the November six month inflation rate.

The percentage change in the CPI-U in the first three months of the new period is 2.57% so far (for 3 months from March to June)

maywood
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Re: I Bonds variable rate @ 3.54% in May

Post by anon_investor »

maywood wrote: Mon Aug 02, 2021 8:13 am Some of my I bonds finally jumped to 7.0% since my earliest ones were purchased February 2001.

I made a note in my planner in mid-October to calculate the November six month inflation rate.

The percentage change in the CPI-U in the first three months of the new period is 2.57% so far (for 3 months from March to June)

maywood
Are you still regularly buying I Bonds? We are maxed out for 2021, but plan to buy in 2022. If the November variable rate is high again, we will buy our 2022 allotment before the May price change, as we do not expect the fixed rate to change from 0% anytime soon.
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Re: I Bonds variable rate @ 3.54% in May

Post by maywood »

No, I haven't purchased any since 2013, but I probably will by the end of the year and again in January.

For those on the fence about buying, one strategy would be to buy in the latter half of October, then you know what you will get for the next full year. In mid-October, the CPI-U for September will be released and we can calculate the next 6 month inflation rate that takes effect November 1. Assuming it's high, you will get a full year of a high rate, since if you buy in October, for your first six months, you will get the current 6 month inflation rate of 1.77%, then starting April 1, 2022 you will get the November 1 inflation rate.

The November 1 inflation rate is on track to be high based on the first 3 months of the period, but it may not end up being high if the inflation rate goes negative the second 3 months of this period. We will know in mid October.

maywood
Last edited by maywood on Wed Aug 04, 2021 2:24 pm, edited 1 time in total.
tj
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Re: I Bonds variable rate @ 3.54% in May

Post by tj »

maywood wrote: Wed Aug 04, 2021 10:56 am No, I haven't purchased any since 2013, but I probably will by the end of the year and again in January.

For those on the fence about buying, one strategy would be to buy in the latter half of October, then you know what you will get for the next full year. In mid-October, the CPI-U for September will be released and we can calculate the next 6 month inflation rate that takes effect November 1. Assuming it's high, you will get a full year of a high rate, since if you buy in October, for your first six months, you will get the current 6 month inflation rate of 1.77%, then starting April 1, 2020 you will get the November 1 inflation rate.

The November 1 inflation rate is on track to be high based on the first 3 months of the period, but it may not end up being high if the inflation rate goes negative the second 3 months of this period. We will know in mid October.

maywood
Did you copy and paste numbers from a different post with prior year info?
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Re: I Bonds variable rate @ 3.54% in May

Post by maywood »

>Did you copy and paste numbers from a different post with prior year info?

No, but I accidentally put 2020 when I meant 2022. I just fixed it, thanks for catching that.

maywood
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Re: I Bonds variable rate @ 3.54% in May

Post by tj »

maywood wrote: Wed Aug 04, 2021 2:25 pm >Did you copy and paste numbers from a different post with prior year info?

No, but I accidentally put 2020 when I meant 2022. I just fixed it, thanks for catching that.

maywood
I thought the current inflation rate is 3.54 ?
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Re: I Bonds variable rate @ 3.54% in May

Post by maywood »

tj wrote: Wed Aug 04, 2021 2:27 pm
maywood wrote: Wed Aug 04, 2021 2:25 pm >Did you copy and paste numbers from a different post with prior year info?

No, but I accidentally put 2020 when I meant 2022. I just fixed it, thanks for catching that.

maywood
I thought the current inflation rate is 3.54 ?


3.54 is double the six-month inflation rate which is 1.77, so that's why people are saying the rate is 3.54%. If you purchase bonds now, your annualized composite rate for the next 6 months is 3.54%. The 6 month inflation rate is what is published each May 1 and Nov 1 and used in the formula to calculate the new annualized composite rate each 6 months.

maywood
Last edited by maywood on Wed Aug 04, 2021 2:39 pm, edited 4 times in total.
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Re: I Bonds variable rate @ 3.54% in May

Post by case_of_ennui »

anon_investor wrote: Wed Jun 23, 2021 1:50 pm
Bulgogi Head wrote: Wed Jun 23, 2021 1:46 pm
anon_investor wrote: Tue Jun 22, 2021 10:22 pm
tomsense76 wrote: Tue Jun 22, 2021 9:39 pm
Bulgogi Head wrote: Tue Jun 22, 2021 9:20 pm

I suppose my question is how TD handles the 3-month penalty for cashing out before 5 years. Does TD withhold the first 3 months of interest, and then give that interest at the 5 year mark?
They say the last 3months of interest is withheld ( https://treasurydirect.gov/indiv/resear ... m.htm#when ). So one would compute the interest all the way up to 3months prior to the redemption
The balance that TD shows is what you would get if redeemed. No guess work (TD doesn't show the interest that you would lose if you redeemed early, which is the 3 more recent months).
Thank you! From the link above I think I figured out why my ibonds still show the original balance. It looks like I won’t see the balance change until 6 months in.
No, you will see the balance change after 3 months. So if you bought in May, you will have to wait until August 1 to see the change.
Has anyone else who made a May purchase seen the update yet. My issue date is 5-01 and even drilling all the way down to the holdings detail I am still only seeing the original $10,000 purchase balance.

Edit: Maybe it takes 4 months to show since the first 3 would be forfeit if I were to redeem now? Not really concerned, just intrigued by how they chose to display this.
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Re: I Bonds variable rate @ 3.54% in May

Post by SuperTrooper87 »

case_of_ennui wrote: Wed Aug 04, 2021 2:34 pm
anon_investor wrote: Wed Jun 23, 2021 1:50 pm
Bulgogi Head wrote: Wed Jun 23, 2021 1:46 pm
anon_investor wrote: Tue Jun 22, 2021 10:22 pm
tomsense76 wrote: Tue Jun 22, 2021 9:39 pm

They say the last 3months of interest is withheld ( https://treasurydirect.gov/indiv/resear ... m.htm#when ). So one would compute the interest all the way up to 3months prior to the redemption
The balance that TD shows is what you would get if redeemed. No guess work (TD doesn't show the interest that you would lose if you redeemed early, which is the 3 more recent months).
Thank you! From the link above I think I figured out why my ibonds still show the original balance. It looks like I won’t see the balance change until 6 months in.
No, you will see the balance change after 3 months. So if you bought in May, you will have to wait until August 1 to see the change.
Has anyone else who made a May purchase seen the update yet. My issue date is 5-01 and even drilling all the way down to the holdings detail I am still only seeing the original $10,000 purchase balance.

Edit: Maybe it takes 4 months to show since the first 3 would be forfeit if I were to redeem now? Not really concerned, just intrigued by how they chose to display this.
following as I noticed the same and had the same thoughts. First time buyer.
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Re: I Bonds variable rate @ 3.54% in May

Post by anon_investor »

SuperTrooper87 wrote: Thu Aug 05, 2021 11:38 am
case_of_ennui wrote: Wed Aug 04, 2021 2:34 pm
anon_investor wrote: Wed Jun 23, 2021 1:50 pm
Bulgogi Head wrote: Wed Jun 23, 2021 1:46 pm
anon_investor wrote: Tue Jun 22, 2021 10:22 pm

The balance that TD shows is what you would get if redeemed. No guess work (TD doesn't show the interest that you would lose if you redeemed early, which is the 3 more recent months).
Thank you! From the link above I think I figured out why my ibonds still show the original balance. It looks like I won’t see the balance change until 6 months in.
No, you will see the balance change after 3 months. So if you bought in May, you will have to wait until August 1 to see the change.
Has anyone else who made a May purchase seen the update yet. My issue date is 5-01 and even drilling all the way down to the holdings detail I am still only seeing the original $10,000 purchase balance.

Edit: Maybe it takes 4 months to show since the first 3 would be forfeit if I were to redeem now? Not really concerned, just intrigued by how they chose to display this.
following as I noticed the same and had the same thoughts. First time buyer.
If you bought in May 2021, then you will not see any interest listed until September 1. Since the last 3 months of interest will no be shown and 4 total months have not passed. So right now only 3 months worth of interest have accrued (May, June July) but is hidden due to the 3 months interest penalty if you redeem before 5 years. So on September 1, after 4 months of interest has accured (May, June, July, August) then the May interest will appear.
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Re: I Bonds variable rate @ 3.54% in May

Post by tj »

anon_investor wrote: Thu Aug 05, 2021 11:52 am
SuperTrooper87 wrote: Thu Aug 05, 2021 11:38 am
case_of_ennui wrote: Wed Aug 04, 2021 2:34 pm
anon_investor wrote: Wed Jun 23, 2021 1:50 pm
Bulgogi Head wrote: Wed Jun 23, 2021 1:46 pm

Thank you! From the link above I think I figured out why my ibonds still show the original balance. It looks like I won’t see the balance change until 6 months in.
No, you will see the balance change after 3 months. So if you bought in May, you will have to wait until August 1 to see the change.
Has anyone else who made a May purchase seen the update yet. My issue date is 5-01 and even drilling all the way down to the holdings detail I am still only seeing the original $10,000 purchase balance.

Edit: Maybe it takes 4 months to show since the first 3 would be forfeit if I were to redeem now? Not really concerned, just intrigued by how they chose to display this.
following as I noticed the same and had the same thoughts. First time buyer.
If you bought in May 2021, then you will not see any interest listed until September 1. Since the last 3 months of interest will no be shown and 4 total months have not passed. So right now only 3 months worth of interest have accrued (May, June July) but is hidden due to the 3 months interest penalty if you redeem before 5 years. So on September 1, after 4 months of interest has accured (May, June, July, August) then the May interest will appear.
So, in May 2026, you get a large interest boost? :D
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Re: I Bonds variable rate @ 3.54% in May

Post by anon_investor »

tj wrote: Thu Aug 05, 2021 12:12 pm
anon_investor wrote: Thu Aug 05, 2021 11:52 am
SuperTrooper87 wrote: Thu Aug 05, 2021 11:38 am
case_of_ennui wrote: Wed Aug 04, 2021 2:34 pm
anon_investor wrote: Wed Jun 23, 2021 1:50 pm

No, you will see the balance change after 3 months. So if you bought in May, you will have to wait until August 1 to see the change.
Has anyone else who made a May purchase seen the update yet. My issue date is 5-01 and even drilling all the way down to the holdings detail I am still only seeing the original $10,000 purchase balance.

Edit: Maybe it takes 4 months to show since the first 3 would be forfeit if I were to redeem now? Not really concerned, just intrigued by how they chose to display this.
following as I noticed the same and had the same thoughts. First time buyer.
If you bought in May 2021, then you will not see any interest listed until September 1. Since the last 3 months of interest will no be shown and 4 total months have not passed. So right now only 3 months worth of interest have accrued (May, June July) but is hidden due to the 3 months interest penalty if you redeem before 5 years. So on September 1, after 4 months of interest has accured (May, June, July, August) then the May interest will appear.
So, in May 2026, you get a large interest boost? :D
4 months worth, but who knows what the variable rate will be then. If it is 0%, you get no boost...
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Re: I Bonds variable rate @ 3.54% in May

Post by Thesaints »

maywood wrote: Wed Aug 04, 2021 10:56 am The November 1 inflation rate is on track to be high based on the first 3 months of the period, but it may not end up being high if the inflation rate goes negative the second 3 months of this period. We will know in mid October.
At present it is on track to be around 8% annualized, with only one month to go. Correct me if I'm wrong, but I think it will be the highest inflation component ever for those bonds.
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Re: I Bonds variable rate @ 3.54% in May

Post by Mel Lindauer »

Thesaints wrote: Sat Sep 18, 2021 12:53 am
maywood wrote: Wed Aug 04, 2021 10:56 am The November 1 inflation rate is on track to be high based on the first 3 months of the period, but it may not end up being high if the inflation rate goes negative the second 3 months of this period. We will know in mid October.
At present it is on track to be around 8% annualized, with only one month to go. Correct me if I'm wrong, but I think it will be the highest inflation component ever for those bonds.
If the newly-announced inflation rate is anywhere near 6-8%, those good old 3.4 and 3.6% fixed-rate I Bonds that you can't get any longer will be yielding close to, or even over, 10%. Who said I Bonds were "stodgy"?
Best Regards - Mel | | Semper Fi
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Re: I Bonds variable rate @ 3.54% in May

Post by maywood »

Thesaints wrote: Sat Sep 18, 2021 12:53 am
maywood wrote: Wed Aug 04, 2021 10:56 am The November 1 inflation rate is on track to be high based on the first 3 months of the period, but it may not end up being high if the inflation rate goes negative the second 3 months of this period. We will know in mid October.
At present it is on track to be around 8% annualized, with only one month to go. Correct me if I'm wrong, but I think it will be the highest inflation component ever for those bonds.
I'm getting a 3.28 difference between the Aug and March CPI-U, so that's 6.56% with one month to go. (The rate will be determined by the difference in Sep from March CPI-U).

The highest 6 month inflation rate in the past was 2.85 in Nov 2005 (or 5.7% annualized)

> Who said I Bonds were "stodgy"?

Not me!

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Re: I Bonds variable rate @ 3.54% in May

Post by z3r0c00l »

But the $10,000 limit though! /s
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Re: I Bonds variable rate @ 3.54% in May

Post by HueyLD »

[quote=LittleMaggieMae post_id=6079256 time=1624322372 user_id=151207
DW = Dear Wife
DH = Dear Husband
DS,DS1, DS2 = Dear Son, Dear Son #1, Dear Son #2 -- in a very few cases it means Dear Spouse you have to figure it out from context.
DD,DD1, DD2 = Dear Daughter Dear Daughter#1, Dear Daughter #2
[/quote]
Before joining BHs, my first impression of the above acronyms was:

DW = Dead Weight
DH = Designated Hitter
DS = Don’t Suck
DD = Cup Size.
Last edited by HueyLD on Sat Sep 18, 2021 6:10 am, edited 1 time in total.
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Re: I Bonds variable rate @ 3.54% in May

Post by anon_investor »

z3r0c00l wrote: Sat Sep 18, 2021 5:56 am But the $10,000 limit though! /s
$20k/yr for a married couple really adds up though!
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Re: I Bonds variable rate @ 3.54% in May

Post by Da5id »

z3r0c00l wrote: Sat Sep 18, 2021 5:56 am But the $10,000 limit though! /s
Depending on one's circumstances, that limit may make them not worth the hassle despite your /s tag. e.g. as you recently said: viewtopic.php?f=10&t=357999&p=6224334#p6224334

That said I do like them. I sold off mine to finish paying kids college tuition (and get the tax exclusion), but am buying more these days, including planning on getting a tax refund in I-bonds.
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Re: I Bonds variable rate @ 3.54% in May

Post by jason2459 »

anon_investor wrote: Sat Sep 18, 2021 6:10 am
z3r0c00l wrote: Sat Sep 18, 2021 5:56 am But the $10,000 limit though! /s
$20k/yr for a married couple really adds up though!
+$5k for tax overpayment
+$10k for trust

Potential $35k/year mfj or $25k for single person
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Re: I Bonds variable rate @ 3.54% in May

Post by fishandgolf »

I did open an account with Treasury Direct about a month ago and purchased $500.00 in I Bonds just to get started.

Questions:

1) If a person wanted to purchase more I Bonds, is it better to do so now or wait until the new rate is announced?

2) If there is a "hot" run on I Bonds, is there a chance the Treasury will shut down the purchase of I Bonds at some point?
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Re: I Bonds variable rate @ 3.54% in May

Post by ChiKid24 »

fishandgolf wrote: Sat Sep 18, 2021 8:38 am I did open an account with Treasury Direct about a month ago and purchased $500.00 in I Bonds just to get started.

Questions:

1) If a person wanted to purchase more I Bonds, is it better to do so now or wait until the new rate is announced?

2) If there is a "hot" run on I Bonds, is there a chance the Treasury will shut down the purchase of I Bonds at some point?
1) Are you getting better than the current 3.54% somewhere else? If not, go ahead and buy them now to start the clock on the 1 year hold. You'll still get the potentially higher rate in 6 months.

2) I suppose anything is possible. But I don't see a reason why Treasury would shut it down.
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Re: I Bonds variable rate @ 3.54% in May

Post by FoundingFather »

fishandgolf wrote: Sat Sep 18, 2021 8:38 am Questions:

1) If a person wanted to purchase more I Bonds, is it better to do so now or wait until the new rate is announced?

2) If there is a "hot" run on I Bonds, is there a chance the Treasury will shut down the purchase of I Bonds at some point?
1) If you buy now, you will still get 6 months of the new rate, the same as if you waited, but you will first get 6 months of the current rate, which isn't a bad rate either. The only reason to wait to purchase I Bonds is if you anticipate the new fixed rate to increase substantially. I also don't find this a convincing reason to wait, since you can always buy at the new fixed rate after the first of the year.

2) The treasury has previously decreased the amount of I Bonds you can purchase, so it is possible, but I have not heard anything indicating this. I suspect that they may discontinue the ability to get paper I Bonds with your tax return, but this is just a guess.

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Re: I Bonds variable rate @ 3.54% in May

Post by Johnny99 »

I want to use $20k (wife and I) to buy iBonds this year. What is the potential advantage or disadvantage to waiting a few more weeks to November for the updated rate?

Thanks
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Re: I Bonds variable rate @ 3.54% in May

Post by Da5id »

fishandgolf wrote: Sat Sep 18, 2021 8:38 am 2) If there is a "hot" run on I Bonds, is there a chance the Treasury will shut down the purchase of I Bonds at some point?
I Bonds are a pretty niche product. There is no benefit to investment professionals advocating for them (they don't get a cut) so those with advisors or who listen to talking heads probably don't partake. I gather that most people haven't heard of them. So I doubt they will go on a really "hot run" of sales.

That said, I'm not sure why Treasury still sells I-bonds. Seems like they are not a great deal for the gov't in general. So if they stopped those sales I'd not be shocked. I did a quick google to see how much the gov't sells annually in I-bonds and ee-bonds and didn't see the answer, but that might just be a weak google game on my part as the answer must surely be out there.
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Re: I Bonds variable rate @ 3.54% in May

Post by moorso »

So if I bought $10,000 worth of I bonds at the end of August (which I did) I will get the current 3.54% rate till November then get the anticipated higher rate from November through April ?
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Re: I Bonds variable rate @ 3.54% in May

Post by maywood »

Johnny99 wrote: Sat Sep 18, 2021 9:39 am I want to use $20k (wife and I) to buy iBonds this year. What is the potential advantage or disadvantage to waiting a few more weeks to November for the updated rate?

Thanks
If you buy now, you'll still get the updated (November 1) rate later, but you'll get the current 3.54% rate for the first 6 months. Then you'll get the Nov rate for the next six months. That's why I would buy now. (I bought yesterday and will buy more in January.)

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Re: I Bonds variable rate @ 3.54% in May

Post by maywood »

moorso wrote: Sat Sep 18, 2021 10:36 am So if I bought $10,000 worth of I bonds at the end of August (which I did) I will get the current 3.54% rate till November then get the anticipated higher rate from November through April ?
You get whatever rate was in effect when you bought for 6 full months. Then after 6 months (starting Feb 1), you'll get the November rate for the next 6 months.

See the table under "when does my bond change rates?

https://www.treasurydirect.gov/indiv/re ... htm#change

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Re: I Bonds variable rate @ 3.54% in May

Post by Angst »

moorso wrote: Sat Sep 18, 2021 10:36 am So if I bought $10,000 worth of I bonds at the end of August (which I did) I will get the current 3.54% rate till November then get the anticipated higher rate from November through April ?
Note that at the top of this webpage there is a link for the forum's Wiki site. Searching in the search field at the top of the Wiki site will bring up the following Wiki page: https://www.bogleheads.org/wiki/I_savings_bonds As you might expect, a lot of basic info about I Bonds is available there, including the answer to your question.

To answer your question right now: No. You will not earn the November rate until February.

For anyone else considering buying I Bonds for the first time, I suggest you do NOT buy I Bonds until you've read the Wiki! :beer
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Re: I Bonds variable rate @ 3.54% in May

Post by Thesaints »

maywood wrote: Sat Sep 18, 2021 5:10 am I'm getting a 3.28 difference between the Aug and March CPI-U, so that's 6.56% with one month to go. (The rate will be determined by the difference in Sep from March CPI-U).

The highest 6 month inflation rate in the past was 2.85 in Nov 2005 (or 5.7% annualized)
The key is "is on track". Your estimates assumes that on the sixth and final month the CPI does not change. Mine assumes that it changes following the previous 5 months trend.
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