I Bonds Mega Thread (I Bond Heads Rejoice!)

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ChiKid24
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Re: I Bonds variable rate @ 3.54% in May

Post by ChiKid24 »

ChiKid24 wrote: Tue Apr 20, 2021 5:43 pm Will be doing our first ibond purchase in May. Question for those who have done this before on Treasury Direct. Do you just buy one bond for the full amount you want to invest (up to $10k)? Or do you buy multiple bonds for various denominations? Reason for the question is that my intent here is a 2nd tier emergency fund. There could be an instance where I only need to pull $2-$5k from the ibonds, so wouldn't want to sell the full $10k. Or does it not matter and the funds are treated like a savings account which can be pulled in any denomination at any time, recognizing the 1- and 5-year hold period penalties.
Nevermind. Found the answer to my own question on TD website: You can cash a minimum of $25 or any amount above that in 1-cent increments. If you cash only a portion of the bond’s value, you must leave at least $25 in the TreasuryDirect account. Redemptions are comprised of principal and interest. (In a partial redemption, we pay interest only on the partial amount you cash.)
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anon_investor
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Re: I Bonds variable rate @ 3.54% in May

Post by anon_investor »

ChiKid24 wrote: Tue Apr 20, 2021 5:46 pm
ChiKid24 wrote: Tue Apr 20, 2021 5:43 pm Will be doing our first ibond purchase in May. Question for those who have done this before on Treasury Direct. Do you just buy one bond for the full amount you want to invest (up to $10k)? Or do you buy multiple bonds for various denominations? Reason for the question is that my intent here is a 2nd tier emergency fund. There could be an instance where I only need to pull $2-$5k from the ibonds, so wouldn't want to sell the full $10k. Or does it not matter and the funds are treated like a savings account which can be pulled in any denomination at any time, recognizing the 1- and 5-year hold period penalties.
Nevermind. Found the answer to my own question on TD website: You can cash a minimum of $25 or any amount above that in 1-cent increments. If you cash only a portion of the bond’s value, you must leave at least $25 in the TreasuryDirect account. Redemptions are comprised of principal and interest. (In a partial redemption, we pay interest only on the partial amount you cash.)
Yep, it is pretty awesome as an emergency fund once held for over a year.
z3r0c00l
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Re: I Bonds variable rate @ 3.54% in May

Post by z3r0c00l »

After many years of buying them I suggest just getting the full 10K at once, it gets really cluttered to have 20-30 bonds in there.
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donaldfair71
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Re: I Bonds variable rate @ 3.54% in May

Post by donaldfair71 »

z3r0c00l wrote: Tue Apr 20, 2021 7:05 pm After many years of buying them I suggest just getting the full 10K at once, it gets really cluttered to have 20-30 bonds in there.
Yep. This is really one of the few downsides. The cluttering that can become cumbersome.
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Re: I Bonds variable rate @ 3.54% in May

Post by z3r0c00l »

donaldfair71 wrote: Tue Apr 20, 2021 7:25 pm
z3r0c00l wrote: Tue Apr 20, 2021 7:05 pm After many years of buying them I suggest just getting the full 10K at once, it gets really cluttered to have 20-30 bonds in there.
Yep. This is really one of the few downsides. The cluttering that can become cumbersome.
I also consider mine part of the emergency fund but if I am liquidating I bonds, it will be a big expense and 10K or more will be needed. Few thousand in the bank account would go first.
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Darth Xanadu
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Re: I Bonds variable rate @ 3.54% in May

Post by Darth Xanadu »

ApeAttack wrote: Tue Apr 20, 2021 5:43 pm I have a couple questions regarding paying taxes on redeemed I-Bonds. According to the Treasury Direct website, there are two options for reporting taxes:
(A) Report the interest every year on your federal income tax return
(B) Defer reporting the interest until the bond is redeemed (I prefer this method)
https://www.treasurydirect.gov/indiv/re ... nsider.htm

My questions:
(1) Will I receive the 1099-INT form only when I cash out the I-Bonds, or every year I hold the I-Bonds? This video makes it seem like I may receive a 1099-INT every year (or maybe the user redeemed I-Bonds every year).
https://www.treasurydirect.gov/indiv/to ... 20)-CC.mp4

(2) When purchasing the I-Bonds, do I need to select which option I wish to implement?


Thanks in advance for the input. I plan on making my first purchase of I-Bonds in May and want to be prepared.
Good questions. My understanding, which is not gospel, is that you do not receive a 1099-INT every year if you choose not to report the income. In fact, I believe you have to actively log into TD website to download the tax form for the year you redeem. I don't believe they send you anything.

I don't know the answer to your 2nd question, I don't recall the process even though I most recently purchased only a year ago. I believe you make a selection. I don't think you can change your selection after the fact.
Makaveli
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Re: I Bonds variable rate @ 3.54% in May

Post by Makaveli »

tomsense76 wrote: Tue Apr 20, 2021 3:47 pm
Makaveli wrote: Fri Apr 16, 2021 5:50 pm
cork wrote: Fri Apr 16, 2021 2:15 pm
Makaveli wrote: Fri Apr 16, 2021 6:30 am
cork wrote: Thu Apr 15, 2021 3:48 pm

When I have cash and have maxed out my IRA contributions, I purchased I Bonds, as opposed to putting it in a bank making .5%. It's not as readily available when you need it. Needs to be in for a year.
And which category do you fall into?

More so interested if this makes sense for someone in their 30’s.
I'm a year and a half from retirement, but that isn't why I purchased them. We had a CD mature that was paying 3+% and couldn't find that rate in another "safe" place for holding part of the emergency fund that we wouldn't need right away. It was at about 1.68% when I purchased the IBond.
I still keep my total bond fund at it's original AA within my other retirement accounts.
Makes sense. The more I thought about it, for someone that's fortunate with 25x expenses, the stress around getting I Bonds for 10k per year isn't worth the headache. Plan to stay the course with TBM.
Personally I buy them and am in my 30s. I think they can make sense if one is already filling all of their tax deferred and tax free accounts, is looking for more ways to save, and needs bonds. Using these to act as a hand rolled annuity in early retirement to delay taking social security
Context would help. Do you have a sizeable brokerage account? How many years of living expenses do you have? My thought process is that starting this year equates to sub 1% of allocation. And that percentage should only get smaller with time. In that regards it seems so insignificant that it may not be worth tracking another account, worrying about next 6 month rate, etc.
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ApeAttack
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Re: I Bonds variable rate @ 3.54% in May

Post by ApeAttack »

Darth Xanadu wrote: Tue Apr 20, 2021 8:06 pm
ApeAttack wrote: Tue Apr 20, 2021 5:43 pm I have a couple questions regarding paying taxes on redeemed I-Bonds. According to the Treasury Direct website, there are two options for reporting taxes:
(A) Report the interest every year on your federal income tax return
(B) Defer reporting the interest until the bond is redeemed (I prefer this method)
https://www.treasurydirect.gov/indiv/re ... nsider.htm

My questions:
(1) Will I receive the 1099-INT form only when I cash out the I-Bonds, or every year I hold the I-Bonds? This video makes it seem like I may receive a 1099-INT every year (or maybe the user redeemed I-Bonds every year).
https://www.treasurydirect.gov/indiv/to ... 20)-CC.mp4

(2) When purchasing the I-Bonds, do I need to select which option I wish to implement?


Thanks in advance for the input. I plan on making my first purchase of I-Bonds in May and want to be prepared.
Good questions. My understanding, which is not gospel, is that you do not receive a 1099-INT every year if you choose not to report the income. In fact, I believe you have to actively log into TD website to download the tax form for the year you redeem. I don't believe they send you anything.

I don't know the answer to your 2nd question, I don't recall the process even though I most recently purchased only a year ago. I believe you make a selection. I don't think you can change your selection after the fact.
Hmmm... I am on Treasury Direct right now going through the motions of making a purchase and I don't see an option for selecting the tax option.
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HueyLD
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Re: I Bonds variable rate @ 3.54% in May

Post by HueyLD »

TD is not the IRS.

You select the tax reporting option on form 1040.
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anon_investor
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Re: I Bonds variable rate @ 3.54% in May

Post by anon_investor »

z3r0c00l wrote: Tue Apr 20, 2021 7:59 pm
donaldfair71 wrote: Tue Apr 20, 2021 7:25 pm
z3r0c00l wrote: Tue Apr 20, 2021 7:05 pm After many years of buying them I suggest just getting the full 10K at once, it gets really cluttered to have 20-30 bonds in there.
Yep. This is really one of the few downsides. The cluttering that can become cumbersome.
I also consider mine part of the emergency fund but if I am liquidating I bonds, it will be a big expense and 10K or more will be needed. Few thousand in the bank account would go first.
I you can redeem only a portion of a single $10k I Bond, so if you need $1k, you only need to redeem $1k and leave the remanining $9k worth as an I Bond.

I only started buying I Bonds last year, but my spouse and I each bought $10k worth at 1 time. We each plan to buy another $10k worth in May.
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ApeAttack
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Re: I Bonds variable rate @ 3.54% in May

Post by ApeAttack »

HueyLD wrote: Tue Apr 20, 2021 9:12 pm TD is not the IRS.

You select the tax reporting option on form 1040.
Yes, I realize that. Are you saying there is a tax reporting option for I-Bonds on a 1040 form? If not, your answer is a bit vague.

I'm trying to figure out the mechanism of how I can defer taxes on I-Bonds. I don't want to make a mistake and be forced to pay taxes every year until I redeem them. Will I receive a 1099-INT every year even if I do not redeem the bonds that year? If so, I'm trying to understand whether I am obligated to report the interest every year. In the past, the only times I have ever received a 1099-INT form is getting interest from a savings or money market account.
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MrJedi
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Re: I Bonds variable rate @ 3.54% in May

Post by MrJedi »

ApeAttack wrote: Tue Apr 20, 2021 9:29 pm
HueyLD wrote: Tue Apr 20, 2021 9:12 pm TD is not the IRS.

You select the tax reporting option on form 1040.
Yes, I realize that. Are you saying there is a tax reporting option for I-Bonds on a 1040 form? If not, your answer is a bit vague.

I'm trying to figure out the mechanism of how I can defer taxes on I-Bonds. I don't want to make a mistake and be forced to pay taxes every year until I redeem them. Will I receive a 1099-INT every year even if I do not redeem the bonds that year? If so, I'm trying to understand whether I am obligated to report the interest every year. In the past, the only times I have ever received a 1099-INT form is getting interest from a savings or money market account.
The instructions are in Pub 550. Check out pages 7-9.

http://www.irs.gov/pub/irs-pdf/p550.pdf

You only receive the 1099-INT upon redemption.

If you choose to pay tax as you go, you manually report the increase in redemption value each year. There is no formal election when you buy the bond. Then when you redeem the bond, you need to remember yourself that some of that 1099-INT income was already taxed/reported in previous years. It gives this example specifically:
However, your Form
1099-INT may show more interest than you
have to include on your income tax return. For
example, this may happen if any of the following
are true.
• You chose to report the increase in the re-
demption value of the bond each year. The
interest shown on your Form 1099-INT will
not be reduced by amounts previously in-
cluded in income.
Quite a hassle if you choose that method, IMO.

If you want to defer, you simply don't do anything taxwise until you redeem and receive the 1099-INT that year.
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ApeAttack
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Re: I Bonds variable rate @ 3.54% in May

Post by ApeAttack »

MrJedi wrote: Tue Apr 20, 2021 9:47 pm
ApeAttack wrote: Tue Apr 20, 2021 9:29 pm
HueyLD wrote: Tue Apr 20, 2021 9:12 pm TD is not the IRS.

You select the tax reporting option on form 1040.
Yes, I realize that. Are you saying there is a tax reporting option for I-Bonds on a 1040 form? If not, your answer is a bit vague.

I'm trying to figure out the mechanism of how I can defer taxes on I-Bonds. I don't want to make a mistake and be forced to pay taxes every year until I redeem them. Will I receive a 1099-INT every year even if I do not redeem the bonds that year? If so, I'm trying to understand whether I am obligated to report the interest every year. In the past, the only times I have ever received a 1099-INT form is getting interest from a savings or money market account.
The instructions are in Pub 550. Check out pages 7-9.

http://www.irs.gov/pub/irs-pdf/p550.pdf

You only receive the 1099-INT upon redemption.

If you choose to pay tax as you go, you manually report the increase in redemption value each year. There is no formal election when you buy the bond. Then when you redeem the bond, you need to remember yourself that some of that 1099-INT income was already taxed/reported in previous years. It gives this example specifically:
However, your Form
1099-INT may show more interest than you
have to include on your income tax return. For
example, this may happen if any of the following
are true.
• You chose to report the increase in the re-
demption value of the bond each year. The
interest shown on your Form 1099-INT will
not be reduced by amounts previously in-
cluded in income.
Quite a hassle if you choose that method, IMO.

If you want to defer, you simply don't do anything taxwise until you redeem and receive the 1099-INT that year.

Thanks! I really appreciate you breaking it down for me like that. I'm very new at dealing with savings bonds and I don't want to make a silly mistake.
May all your index funds gain +0.5% today.
donaldfair71
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Re: I Bonds variable rate @ 3.54% in May

Post by donaldfair71 »

z3r0c00l wrote: Tue Apr 20, 2021 7:59 pm
donaldfair71 wrote: Tue Apr 20, 2021 7:25 pm
z3r0c00l wrote: Tue Apr 20, 2021 7:05 pm After many years of buying them I suggest just getting the full 10K at once, it gets really cluttered to have 20-30 bonds in there.
Yep. This is really one of the few downsides. The cluttering that can become cumbersome.
I also consider mine part of the emergency fund but if I am liquidating I bonds, it will be a big expense and 10K or more will be needed. Few thousand in the bank account would go first.
Smart, try to do the same.

The WORST was when I sold several dozen small lots (I have regular contributions automated for years that piled up), then had to keep the basis/gain for each small lot to write off the interest on and use toward a 529 plan. I had to document these basis/gains in the 529 paperwork. The gains became tax free, which is nice, but man the work necessary with these small amounts!
Angst
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Re: I Bonds variable rate @ 3.54% in May

Post by Angst »

#Cruncher wrote: Tue Apr 20, 2021 4:59 pm
Angst wrote: Tue Apr 20, 2021 9:12 am#Cruncher, if you were faced [1] with the choice of buying your 2021 I Bonds now or waiting until May, which would you choose?
I'm much better at putting together arcane analyses than anything practical like forecasting, Angst. (To paraphrase one member's, signature, I find it particularly hard to forecast the future.) :wink: But since you ask ... I'd probably wait until May, but I don't think it would make a lot of difference. My personal case is based on the following scenario:
[SNIP...]
Thank you so much #Cruncher! I couldn't have asked for more. :wink: Actually, in hindsight, I shouldn't have expected anything less. I think you have a beautiful mind. :beer
manuvns
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Re: I Bonds variable rate @ 3.54% in May

Post by manuvns »

is it good idea to sell low yield international bond BNDX move the asets to I bonds next month ?
Thanks!
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vineviz
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Re: I Bonds variable rate @ 3.54% in May

Post by vineviz »

manuvns wrote: Wed Apr 21, 2021 12:38 pm is it good idea to sell low yield international bond BNDX move the asets to I bonds next month ?
Probably not if you're simply chasing yield: the yield on BNDX appears to be higher than 3.54%.
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nfosec
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Re: I Bonds variable rate @ 3.54% in May

Post by nfosec »

petercooperjr wrote: Thu Apr 15, 2021 7:57 am
2Dog wrote: Wed Apr 14, 2021 6:36 pm Actually I believe the maximum is $10k person, $10k per trust and $5k for tax refund so husband and wife with separate trusts could mas out at $45k per year. Please let me know if my math is incorrect.
I'm actually not aware of a rule limiting each person to only one trust. I think that if one was sufficiently motivated and didn't mind a ton of paperwork, one could create a bunch of trusts and put $10k in each. There might be some rule that I haven't seen, though, and perhaps they'd create one if enough people did this.
I may know someone who accidentally bought 15K$ (they confused an EE bond purchase vs. an I-Bond) and had 15K in ibonds last year. They received a nastygram saying not to do it again. YMMV
calwatch
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Re: I Bonds variable rate @ 3.54% in May

Post by calwatch »

You can also create a separate TD entity account for a sole proprietorship. Others have done it but I never felt it was worth yet another TD login for an extra $10,000 a year in bonds.
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ApeAttack
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Re: I Bonds variable rate @ 3.54% in May

Post by ApeAttack »

Quick question about I-Bonds... I know the interest compounds semi-annually, but I just wanted to confirm this is what happens by default. That is, I don't need to opt-in to compounding, correct?

The reason I ask is because my only prior experience with bonds is through bond funds in a 403b where I have to select the option to reinvest dividends.
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calwatch
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Re: I Bonds variable rate @ 3.54% in May

Post by calwatch »

Yes, it happens by default. The balance on your (individual) bonds just grows every month.
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ApeAttack
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Re: I Bonds variable rate @ 3.54% in May

Post by ApeAttack »

calwatch wrote: Thu Apr 22, 2021 10:25 am Yes, it happens by default. The balance on your (individual) bonds just grows every month.
Thanks. I'm looking forward to watching the miracle of compound interest in the years ahead.
:moneybag --> :moneybag :moneybag
May all your index funds gain +0.5% today.
Angst
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Re: I Bonds variable rate @ 3.54% in May

Post by Angst »

ApeAttack wrote: Thu Apr 22, 2021 10:28 am
calwatch wrote: Thu Apr 22, 2021 10:25 am Yes, it happens by default. The balance on your (individual) bonds just grows every month.
Thanks. I'm looking forward to watching the miracle of compound interest in the years ahead.
:moneybag --> :moneybag :moneybag

Thanks to #Cruncher's website, you can easily track the progress of any I Bonds here:
http://eyebonds.info/ibonds/home1000.html
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ApeAttack
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Re: I Bonds variable rate @ 3.54% in May

Post by ApeAttack »

Angst wrote: Thu Apr 22, 2021 10:59 am
ApeAttack wrote: Thu Apr 22, 2021 10:28 am
calwatch wrote: Thu Apr 22, 2021 10:25 am Yes, it happens by default. The balance on your (individual) bonds just grows every month.
Thanks. I'm looking forward to watching the miracle of compound interest in the years ahead.
:moneybag --> :moneybag :moneybag

Thanks to #Cruncher's website, you can easily track the progress of any I Bonds here:
http://eyebonds.info/ibonds/home1000.html
Very neat website -- I just bookmarked it. If I make an I-Bond purchase, at some future date will the TD website tell me its current redemption value? For example, if I purchase $1000 of I-Bonds in May 2021 and I check on the lot in June 2023, will TD tell me its redemption value?
May all your index funds gain +0.5% today.
BrokerageZelda
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Re: I Bonds variable rate @ 3.54% in May

Post by BrokerageZelda »

ApeAttack wrote: Thu Apr 22, 2021 12:06 pm Very neat website -- I just bookmarked it. If I make an I-Bond purchase, at some future date will the TD website tell me its current redemption value? For example, if I purchase $1000 of I-Bonds in May 2021 and I check on the lot in June 2023, will TD tell me its redemption value?
Yes - the TD online list of your holdings has a column for 'face values' at purchase and another column for current redemption values.
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ApeAttack
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Re: I Bonds variable rate @ 3.54% in May

Post by ApeAttack »

BrokerageZelda wrote: Thu Apr 22, 2021 12:24 pm
ApeAttack wrote: Thu Apr 22, 2021 12:06 pm Very neat website -- I just bookmarked it. If I make an I-Bond purchase, at some future date will the TD website tell me its current redemption value? For example, if I purchase $1000 of I-Bonds in May 2021 and I check on the lot in June 2023, will TD tell me its redemption value?
Yes - the TD online list of your holdings has a column for 'face values' at purchase and another column for current redemption values.
Thanks for the info. :dollar :dollar :moneybag :moneybag
(I wish there was an I-Bond emoji)
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Angst
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Re: I Bonds variable rate @ 3.54% in May

Post by Angst »

ApeAttack wrote: Thu Apr 22, 2021 12:06 pm
Angst wrote: Thu Apr 22, 2021 10:59 am Thanks to #Cruncher's website, you can easily track the progress of any I Bonds here:
http://eyebonds.info/ibonds/home1000.html
Very neat website -- I just bookmarked it. If I make an I-Bond purchase, at some future date will the TD website tell me its current redemption value? For example, if I purchase $1000 of I-Bonds in May 2021 and I check on the lot in June 2023, will TD tell me its redemption value?
Yes, but it's a LOT easier to "login" to #Cruncher's website!
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ApeAttack
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Re: I Bonds variable rate @ 3.54% in May

Post by ApeAttack »

Angst wrote: Thu Apr 22, 2021 10:22 pm
ApeAttack wrote: Thu Apr 22, 2021 12:06 pm
Angst wrote: Thu Apr 22, 2021 10:59 am Thanks to #Cruncher's website, you can easily track the progress of any I Bonds here:
http://eyebonds.info/ibonds/home1000.html
Very neat website -- I just bookmarked it. If I make an I-Bond purchase, at some future date will the TD website tell me its current redemption value? For example, if I purchase $1000 of I-Bonds in May 2021 and I check on the lot in June 2023, will TD tell me its redemption value?
Yes, but it's a LOT easier to "login" to #Cruncher's website!
What? You don't like having to find and copy/paste your account number, then go to your email for a one time code because TD doesn't recognize your computer, then use a mouse to type/click your password, then click through a half dozen tabs and submit buttons to check on your interest?
May all your index funds gain +0.5% today.
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anon_investor
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Re: I Bonds variable rate @ 3.54% in May

Post by anon_investor »

ApeAttack wrote: Fri Apr 23, 2021 12:07 am
Angst wrote: Thu Apr 22, 2021 10:22 pm
ApeAttack wrote: Thu Apr 22, 2021 12:06 pm
Angst wrote: Thu Apr 22, 2021 10:59 am Thanks to #Cruncher's website, you can easily track the progress of any I Bonds here:
http://eyebonds.info/ibonds/home1000.html
Very neat website -- I just bookmarked it. If I make an I-Bond purchase, at some future date will the TD website tell me its current redemption value? For example, if I purchase $1000 of I-Bonds in May 2021 and I check on the lot in June 2023, will TD tell me its redemption value?
Yes, but it's a LOT easier to "login" to #Cruncher's website!
What? You don't like having to find and copy/paste your account number, then go to your email for a one time code because TD doesn't recognize your computer, then use a mouse to type/click your password, then click through a half dozen tabs and submit buttons to check on your interest?
But that is half the fun of TD! You also get to do that all again when you hit the browser back button!
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tomsense76
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Re: I Bonds variable rate @ 3.54% in May

Post by tomsense76 »

Makaveli wrote: Tue Apr 20, 2021 8:24 pm Context would help. Do you have a sizeable brokerage account? How many years of living expenses do you have? My thought process is that starting this year equates to sub 1% of allocation. And that percentage should only get smaller with time. In that regards it seems so insignificant that it may not be worth tracking another account, worrying about next 6 month rate, etc.
I mean if you are in your 30s and have a $10M portfolio, agree this is probably peanuts.

For me personally this is a smallish, but important part of my portfolio. Don't have much fixed income anyways (90/10). So any fixed income I hold is small as well.

It's nice to have effectively annuitized part of my portfolio. Additionally it could be a nice emergency fund if needed as it acts kind of like a stable value fund, but in taxable (with tax-deferred for decades or until used). Though it behaves a bit better than a stable value fund as it actually tracks inflation and is backed by the US Government as opposed to a private company.
"Anyone who claims to understand quantum theory is either lying or crazy" -- Richard Feynman
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ApeAttack
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Re: I Bonds variable rate @ 3.54% in May

Post by ApeAttack »

anon_investor wrote: Fri Apr 23, 2021 12:35 am
ApeAttack wrote: Fri Apr 23, 2021 12:07 am
Angst wrote: Thu Apr 22, 2021 10:22 pm
ApeAttack wrote: Thu Apr 22, 2021 12:06 pm
Angst wrote: Thu Apr 22, 2021 10:59 am Thanks to #Cruncher's website, you can easily track the progress of any I Bonds here:
http://eyebonds.info/ibonds/home1000.html
Very neat website -- I just bookmarked it. If I make an I-Bond purchase, at some future date will the TD website tell me its current redemption value? For example, if I purchase $1000 of I-Bonds in May 2021 and I check on the lot in June 2023, will TD tell me its redemption value?
Yes, but it's a LOT easier to "login" to #Cruncher's website!
What? You don't like having to find and copy/paste your account number, then go to your email for a one time code because TD doesn't recognize your computer, then use a mouse to type/click your password, then click through a half dozen tabs and submit buttons to check on your interest?
But that is half the fun of TD! You also get to do that all again when you hit the browser back button!
A couple nights ago I was trying to figure out how to add a beneficiary and grant transact rights to my wife, and after 15 minutes I couldn't figure out if I did it successfully. I called my wife over and said, "You know, I not a stupid man, but ..."
May all your index funds gain +0.5% today.
AlwaysLearningMore
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Re: I Bonds variable rate @ 3.54% in May

Post by AlwaysLearningMore »

It takes longer to read through this thread than to log into Treasury Direct and complete a transaction.
Retirement is best when you have a lot to live on, and a lot to live for. * None of what I post is investment advice.* | FIRE'd July 2023
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anon_investor
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Re: I Bonds variable rate @ 3.54% in May

Post by anon_investor »

ApeAttack wrote: Fri Apr 23, 2021 9:35 am
anon_investor wrote: Fri Apr 23, 2021 12:35 am
ApeAttack wrote: Fri Apr 23, 2021 12:07 am
Angst wrote: Thu Apr 22, 2021 10:22 pm
ApeAttack wrote: Thu Apr 22, 2021 12:06 pm

Very neat website -- I just bookmarked it. If I make an I-Bond purchase, at some future date will the TD website tell me its current redemption value? For example, if I purchase $1000 of I-Bonds in May 2021 and I check on the lot in June 2023, will TD tell me its redemption value?
Yes, but it's a LOT easier to "login" to #Cruncher's website!
What? You don't like having to find and copy/paste your account number, then go to your email for a one time code because TD doesn't recognize your computer, then use a mouse to type/click your password, then click through a half dozen tabs and submit buttons to check on your interest?
But that is half the fun of TD! You also get to do that all again when you hit the browser back button!
A couple nights ago I was trying to figure out how to add a beneficiary and grant transact rights to my wife, and after 15 minutes I couldn't figure out if I did it successfully. I called my wife over and said, "You know, I not a stupid man, but ..."
Hope you figured it out. The instructions are on TD... some where! :twisted:
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ApeAttack
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Re: I Bonds variable rate @ 3.54% in May

Post by ApeAttack »

anon_investor wrote: Fri Apr 23, 2021 10:56 am
ApeAttack wrote: Fri Apr 23, 2021 9:35 am
anon_investor wrote: Fri Apr 23, 2021 12:35 am
ApeAttack wrote: Fri Apr 23, 2021 12:07 am
Angst wrote: Thu Apr 22, 2021 10:22 pm

Yes, but it's a LOT easier to "login" to #Cruncher's website!
What? You don't like having to find and copy/paste your account number, then go to your email for a one time code because TD doesn't recognize your computer, then use a mouse to type/click your password, then click through a half dozen tabs and submit buttons to check on your interest?
But that is half the fun of TD! You also get to do that all again when you hit the browser back button!
A couple nights ago I was trying to figure out how to add a beneficiary and grant transact rights to my wife, and after 15 minutes I couldn't figure out if I did it successfully. I called my wife over and said, "You know, I not a stupid man, but ..."
Hope you figured it out. The instructions are on TD... some where! :twisted:
Eventually. I wrote down the steps in case I need to do it again in the future. For anyone who is interested in granting transact rights to a spouse (which nisiprius said was important to do)...

To grant transact rights if you are the owner:
In your account, go to ManageDirect tab > Assign View or Transact rights link > Select the lot (and the rest should be self-explanatory)

To check whether transact rights have be granted to the other person:
In the spouse's account, go to ManageDirect tab > Access Securities link (and the rest should be self-explanatory)
May all your index funds gain +0.5% today.
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Re: I Bonds variable rate @ 3.54% in May

Post by tipswatcher »

nfosec wrote: Wed Apr 21, 2021 3:53 pm
I may know someone who accidentally bought 15K$ (they confused an EE bond purchase vs. an I-Bond) and had 15K in ibonds last year. They received a nastygram saying not to do it again. YMMV
I also know "someone" who made this mistake a few years ago, buying my ... er ... his spouse's allocation in the same account, thinking that was OK. It wasn't. TD sent me ... er, him ... a note saying, "How dare you!" but let this criminal get away with it. After that, separate accounts. I don't think this is a strategy for cheating, and I don't recommend it.
TIPS: Perfect investment for imperfect times?
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anon_investor
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Re: I Bonds variable rate @ 3.54% in May

Post by anon_investor »

tipswatcher wrote: Fri Apr 23, 2021 9:41 pm
nfosec wrote: Wed Apr 21, 2021 3:53 pm
I may know someone who accidentally bought 15K$ (they confused an EE bond purchase vs. an I-Bond) and had 15K in ibonds last year. They received a nastygram saying not to do it again. YMMV
I also know "someone" who made this mistake a few years ago, buying my ... er ... his spouse's allocation in the same account, thinking that was OK. It wasn't. TD sent me ... er, him ... a note saying, "How dare you!" but let this criminal get away with it. After that, separate accounts. I don't think this is a strategy for cheating, and I don't recommend it.
Which begs the question, why doesn't the TD account prevent you from buying $10k in a calendar year or at least warn you (kind of like how Vanguard has the tally for that year's IRA contributions)...
GTBuzz
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Re: I Bonds variable rate @ 3.54% in May

Post by GTBuzz »

anon_investor wrote: Fri Apr 23, 2021 12:35 am
ApeAttack wrote: Fri Apr 23, 2021 12:07 am
Angst wrote: Thu Apr 22, 2021 10:22 pm
ApeAttack wrote: Thu Apr 22, 2021 12:06 pm
Angst wrote: Thu Apr 22, 2021 10:59 am Thanks to #Cruncher's website, you can easily track the progress of any I Bonds here:
http://eyebonds.info/ibonds/home1000.html
Very neat website -- I just bookmarked it. If I make an I-Bond purchase, at some future date will the TD website tell me its current redemption value? For example, if I purchase $1000 of I-Bonds in May 2021 and I check on the lot in June 2023, will TD tell me its redemption value?
Yes, but it's a LOT easier to "login" to #Cruncher's website!
What? You don't like having to find and copy/paste your account number, then go to your email for a one time code because TD doesn't recognize your computer, then use a mouse to type/click your password, then click through a half dozen tabs and submit buttons to check on your interest?
But that is half the fun of TD! You also get to do that all again when you hit the browser back button!
It's better than 10 years ago when they sent out Little Orphan Annie decoder card things that you had to use to crack a code each time you logged in.
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anon_investor
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Re: I Bonds variable rate @ 3.54% in May

Post by anon_investor »

GTBuzz wrote: Fri Apr 23, 2021 10:23 pm
anon_investor wrote: Fri Apr 23, 2021 12:35 am
ApeAttack wrote: Fri Apr 23, 2021 12:07 am
Angst wrote: Thu Apr 22, 2021 10:22 pm
ApeAttack wrote: Thu Apr 22, 2021 12:06 pm

Very neat website -- I just bookmarked it. If I make an I-Bond purchase, at some future date will the TD website tell me its current redemption value? For example, if I purchase $1000 of I-Bonds in May 2021 and I check on the lot in June 2023, will TD tell me its redemption value?
Yes, but it's a LOT easier to "login" to #Cruncher's website!
What? You don't like having to find and copy/paste your account number, then go to your email for a one time code because TD doesn't recognize your computer, then use a mouse to type/click your password, then click through a half dozen tabs and submit buttons to check on your interest?
But that is half the fun of TD! You also get to do that all again when you hit the browser back button!
It's better than 10 years ago when they sent out Little Orphan Annie decoder card things that you had to use to crack a code each time you logged in.
It feels like they haven't updated their website since then. :twisted:
nfosec
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Re: I Bonds variable rate @ 3.54% in May

Post by nfosec »

tipswatcher wrote: Fri Apr 23, 2021 9:41 pm
nfosec wrote: Wed Apr 21, 2021 3:53 pm
I may know someone who accidentally bought 15K$ (they confused an EE bond purchase vs. an I-Bond) and had 15K in ibonds last year. They received a nastygram saying not to do it again. YMMV
I also know "someone" who made this mistake a few years ago, buying my ... er ... his spouse's allocation in the same account, thinking that was OK. It wasn't. TD sent me ... er, him ... a note saying, "How dare you!" but let this criminal get away with it. After that, separate accounts. I don't think this is a strategy for cheating, and I don't recommend it.
So which of us is going to roll the dice again to see if they give a 2nd warning :D
Whakamole
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Re: I Bonds variable rate @ 3.54% in May

Post by Whakamole »

GTBuzz wrote: Fri Apr 23, 2021 10:23 pm
anon_investor wrote: Fri Apr 23, 2021 12:35 am
ApeAttack wrote: Fri Apr 23, 2021 12:07 am
Angst wrote: Thu Apr 22, 2021 10:22 pm
ApeAttack wrote: Thu Apr 22, 2021 12:06 pm

Very neat website -- I just bookmarked it. If I make an I-Bond purchase, at some future date will the TD website tell me its current redemption value? For example, if I purchase $1000 of I-Bonds in May 2021 and I check on the lot in June 2023, will TD tell me its redemption value?
Yes, but it's a LOT easier to "login" to #Cruncher's website!
What? You don't like having to find and copy/paste your account number, then go to your email for a one time code because TD doesn't recognize your computer, then use a mouse to type/click your password, then click through a half dozen tabs and submit buttons to check on your interest?
But that is half the fun of TD! You also get to do that all again when you hit the browser back button!
It's better than 10 years ago when they sent out Little Orphan Annie decoder card things that you had to use to crack a code each time you logged in.
Fun times. Worth the tradeoff for getting cash back for buying bonds though!
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Candor
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Re: I Bonds variable rate @ 3.54% in May

Post by Candor »

GTBuzz wrote: Fri Apr 23, 2021 10:23 pm
anon_investor wrote: Fri Apr 23, 2021 12:35 am
ApeAttack wrote: Fri Apr 23, 2021 12:07 am
Angst wrote: Thu Apr 22, 2021 10:22 pm
ApeAttack wrote: Thu Apr 22, 2021 12:06 pm

Very neat website -- I just bookmarked it. If I make an I-Bond purchase, at some future date will the TD website tell me its current redemption value? For example, if I purchase $1000 of I-Bonds in May 2021 and I check on the lot in June 2023, will TD tell me its redemption value?
Yes, but it's a LOT easier to "login" to #Cruncher's website!
What? You don't like having to find and copy/paste your account number, then go to your email for a one time code because TD doesn't recognize your computer, then use a mouse to type/click your password, then click through a half dozen tabs and submit buttons to check on your interest?
But that is half the fun of TD! You also get to do that all again when you hit the browser back button!
It's better than 10 years ago when they sent out Little Orphan Annie decoder card things that you had to use to crack a code each time you logged in.
Ha, I forgot about that. That thing has to floating around here somewhere. A bit of a throwback for sure.
The fool, with all his other faults, has this also - he is always getting ready to live. - Seneca Epistles < c. 65AD
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#Cruncher
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Re: I Bonds variable rate @ 3.54% in May

Post by #Cruncher »

For those interested, here are the composite rates that will take effect from May 2021 to October 2021 [ 1 ] and run for six months for all outstanding I Bonds, including newly issued ones with a 0.00% fixed rate. [ 2 ] They incorporate the new semi-annual inflation rate of 1.77%:

Code: Select all

  Fixed Rate Announced      Fixed   Composite
# Times   First    Last     Rate      Rate
-------  ------   ------    -----   ---------
    1    May 00             3.60%     7.20% [3]
    3    Sep 98   Nov 00    3.40%     7.00%
    2    Nov 98   May 99    3.30%     6.90%
    1    May 01             3.00%     6.59%
    2    Nov 01   May 02    2.00%     5.58%
    1    Nov 02             1.60%     5.17%
    2    May 06   Nov 06    1.40%     4.96%
    1    May 07             1.30%     4.86%

Code: Select all

    2    May 05   Nov 07    1.20%     4.76%
    2    May 03   Nov 03    1.10%     4.66%
    3    May 04   Nov 05    1.00%     4.56%
    1    Nov 08             0.70%     4.25%
    2    Nov 18   May 19    0.50%     4.05%
    2    Nov 09   May 18    0.30%     3.85%
    3    May 10   Nov 19    0.20%     3.74%
    5    May 09   Nov 17    0.10%     3.64%
   14    May 08   May 21    0.00%     3.54% <-- new purchase
These composite rates summarize the 521 column near the left side of the I Bond Composite Rates triangle. The source is TreasuryDirect's What have the rates been in the past?.
  1. New composite rates take effect every six months based on the month an I Bond is purchased. For an I Bond purchased in May or November, the composite rates above will take effect May 2021 and run through October 2021. But for an I Bond purchased in April or October, they won't take effect until October 2021 and will run through March 2022. See When does my bond change rates?
  2. Click here for my post from six months ago with the previous composite rates.
  3. Composite rates are computed as follows and rounded to 4 decimal places:

    Code: Select all

    composite rate = fixed rate + ( 2 * inflation rate ) + ( fixed rate * inflation rate )
            0.0720 = 0.0360     + ( 2 * 0.0177         ) + ( 0.0360     * 0.0177         )
tonyclifton
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Re: I Bonds variable rate @ 3.54% in May

Post by tonyclifton »

#Cruncher wrote: Mon May 03, 2021 9:57 am For those interested, here are the composite rates ...
Thank you so much for your work in this area. Hopefully it is a labor of love!! (or at least of interest, har har)
tfunk
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Re: I Bonds variable rate @ 3.54% in May

Post by tfunk »

I bought an array of I-Bonds for several years starting in 2000. I was amazed when I ran the Savings Bond Calculator on my portfolio. Monthly average interest is up 44% for the next 6 months vs the previous 6 months. I-Bonds are an investment that requires a very long term time horizon. It looks like they may start really paying off in the current inflation environment. 20-30 years from now - no one knows.
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Re: I Bonds variable rate @ 3.54% in May

Post by firebirdparts »

Well, here we are. I've went through the whole boojum snark initiation ritual and I am now an I series bond enthusiast.
This time is the same
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Re: I Bonds variable rate @ 3.54% in May

Post by tipswatcher »

firebirdparts wrote: Tue May 04, 2021 3:57 pm Well, here we are. I've went through the whole boojum snark initiation ritual and I am now an I series bond enthusiast.
Welcome to Hotel California, where you will now scheme and plot to nail down a 0.1% fixed rate ($10 a year, but that’s $10! Grows with future inflation!) :beer
TIPS: Perfect investment for imperfect times?
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Re: I Bonds variable rate @ 3.54% in May

Post by ApeAttack »

firebirdparts wrote: Tue May 04, 2021 3:57 pm Well, here we are. I've went through the whole boojum snark initiation ritual and I am now an I series bond enthusiast.
Made my first large I-Bond purchase yesterday. :D
May all your index funds gain +0.5% today.
Thesaints
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Re: I Bonds variable rate @ 3.54% in May

Post by Thesaints »

ApeAttack wrote: Tue May 04, 2021 4:30 pm
firebirdparts wrote: Tue May 04, 2021 3:57 pm Well, here we are. I've went through the whole boojum snark initiation ritual and I am now an I series bond enthusiast.
Made my first large I-Bond purchase yesterday. :D
You could have waited until the 28th...
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Re: I Bonds variable rate @ 3.54% in May

Post by surfstar »

Thesaints wrote: Tue May 04, 2021 4:31 pm
ApeAttack wrote: Tue May 04, 2021 4:30 pm
firebirdparts wrote: Tue May 04, 2021 3:57 pm Well, here we are. I've went through the whole boojum snark initiation ritual and I am now an I series bond enthusiast.
Made my first large I-Bond purchase yesterday. :D
You could have waited until the 28th...
Yes! You lost out on like $4 of HYSA interest!!! (lol we're buying later this month when we have more funds or else I'd just buy now)
averagedude
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Re: I Bonds variable rate @ 3.54% in May

Post by averagedude »

tipswatcher wrote: Tue May 04, 2021 4:14 pm
firebirdparts wrote: Tue May 04, 2021 3:57 pm Well, here we are. I've went through the whole boojum snark initiation ritual and I am now an I series bond enthusiast.
Welcome to Hotel California, where you will now scheme and plot to nail down a 0.1% fixed rate ($10 a year, but that’s $10! Grows with future inflation!) :beer
Yes, I believe it is like Hotel California. I invested this money to spend 5 to 10 years from now, but I don't know if I will ever be able to give up on the inflation protection that Ibonds guarantee. I can foresee myself redeeming these when I am in my eighties, instead of my fifties.
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