I Bonds Mega Thread (I Bond Heads Rejoice!)

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

Post by petercooperjr »

The limits have changed all over the place. It used to be $30,000 per bond type per person per year. In 2008, It changed to $5000. When they got rid of paper savings bonds (except for the tax refund thing), they "kept the limits the same" in that you used to be able to get $5000 paper and $5000 electronic, so it shifted to being $10,000 but all-electronic. From that press release at the end of 2007,
Savings bond purchases have been subject to an annual limit since Series E Bonds were first issued in 1941. Over the years, limits have been adjusted by the Treasury Department several times and have ranged from a low of $3,750 (at issue price) for Series E bonds from 1941 through 1947 to the $30,000 (issue price) limit that most recently applied to both Series EE and Series I bonds. The limit was last set at $5,000 (issue price) in 1973.
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Re: I Bonds variable rate @ 3.54% in May

Post by Swimmer »

Does anyone know what happens if one accidentally overbuys? Seems like this could happen a lot, particularly where gifts are involved.

For example, what if two relatives purchase a 10k I bond for a child as a gift?
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Re: I Bonds variable rate @ 3.54% in May

Post by ApeAttack »

Dyloot wrote: Sat May 15, 2021 3:10 pm Proud BH for more than a decade. Never heard of I Bonds until a couple weeks ago.

I’m in. My wife is already sick of hearing about them—even though she now owns them.

Thanks, all!
I have annoyed my wife throughout the past 2 months with my I-Bond enthusiasm. Now that I made my annual purchase, I probably better keep quiet for a while.
May all your index funds gain +0.5% today.
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Re: I Bonds variable rate @ 3.54% in May

Post by Bulgogi Head »

Are you forced to sell iBonds after 30 years, or do they just stop accruing interest at that time
tj
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Re: I Bonds variable rate @ 3.54% in May

Post by tj »

Bulgogi Head wrote: Mon May 17, 2021 8:35 pm Are you forced to sell iBonds after 30 years, or do they just stop accruing interest at that time
Why would you not redeem it if it is done accruing interest?
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Re: I Bonds variable rate @ 3.54% in May

Post by IowaFarmWife »

ApeAttack wrote: Mon May 17, 2021 4:48 pm
Dyloot wrote: Sat May 15, 2021 3:10 pm Proud BH for more than a decade. Never heard of I Bonds until a couple weeks ago.

I’m in. My wife is already sick of hearing about them—even though she now owns them.

Thanks, all!
I have annoyed my wife throughout the past 2 months with my I-Bond enthusiasm. Now that I made my annual purchase, I probably better keep quiet for a while.
Yea, my husband just rolls his eyes at me anymore when I start talking about them. Come back here if you need to talk about them, we all "get it!" :sharebeer
"A nickel ain't worth a dime anymore." Yogi Berra's financial wisdom.
Bulgogi Head
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Re: I Bonds variable rate @ 3.54% in May

Post by Bulgogi Head »

tj wrote: Mon May 17, 2021 8:38 pm
Bulgogi Head wrote: Mon May 17, 2021 8:35 pm Are you forced to sell iBonds after 30 years, or do they just stop accruing interest at that time
Why would you not redeem it if it is done accruing interest?
Hmm maybe if you did not want to pay the taxes on the redemption in that year?
boglebost
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Re: I Bonds variable rate @ 3.54% in May

Post by boglebost »

Bulgogi Head wrote: Mon May 17, 2021 10:25 pm
tj wrote: Mon May 17, 2021 8:38 pm
Bulgogi Head wrote: Mon May 17, 2021 8:35 pm Are you forced to sell iBonds after 30 years, or do they just stop accruing interest at that time
Why would you not redeem it if it is done accruing interest?
Hmm maybe if you did not want to pay the taxes on the redemption in that year?
Unfortunately you can't avoid the taxes on Series I bonds indefinitely - they are automatically reported on a 1099-INT at the end of 30 years.
tj
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Re: I Bonds variable rate @ 3.54% in May

Post by tj »

Bulgogi Head wrote: Mon May 17, 2021 10:25 pm
tj wrote: Mon May 17, 2021 8:38 pm
Bulgogi Head wrote: Mon May 17, 2021 8:35 pm Are you forced to sell iBonds after 30 years, or do they just stop accruing interest at that time
Why would you not redeem it if it is done accruing interest?
Hmm maybe if you did not want to pay the taxes on the redemption in that year?
You have the option of deferring until they mature, not when they are sold.
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Mel Lindauer
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Re: I Bonds variable rate @ 3.54% in May

Post by Mel Lindauer »

^^^As others have correctly stated above, taxes are due when the bonds mature, regardless of whether you redeem them or not. If they're with Treasury Direct, they'll be redeemed automatically and you'll get a 1099 in the year of maturity.

If they're paper Bonds and you didn't redeem them at maturity, it's still up to you to report the interest on your tax return in the year of maturity, since you'd only get a 1099 when you redeemed them.
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Re: I Bonds variable rate @ 3.54% in May

Post by Mudpuppy »

Swimmer wrote: Sun May 16, 2021 11:45 am Does anyone know how long the limit has been in place? Seems weird that if you aren’t aware of the limit, the TD system lets you proceed with the purchase.
I doubt they keep programmers on hand for the website (it looks like something out of the past), so it's probably just a matter of not wanting to contract out for that sort of code to be added into it. In other words, it's coded for the honor system instead of verification and it probably hasn't been big enough of an issue to hassle with getting it coded otherwise.
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Re: I Bonds variable rate @ 3.54% in May

Post by neurosphere »

Escapevelocity wrote: Sun May 16, 2021 7:01 pm Interesting that the limit hasn’t changed in nearly 10’years. It should be due for an adjustment. Ironically I-bond limits are not indexed to inflation.
This made me laugh. :D
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes" (even in taxable accounts).
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Re: I Bonds variable rate @ 3.54% in May

Post by Mel Lindauer »

neurosphere wrote: Wed May 19, 2021 2:04 pm
Escapevelocity wrote: Sun May 16, 2021 7:01 pm Interesting that the limit hasn’t changed in nearly 10’years. It should be due for an adjustment. Ironically I-bond limits are not indexed to inflation.
This made me laugh. :D
Me, too!
Best Regards - Mel | | Semper Fi
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anon_investor
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Re: I Bonds variable rate @ 3.54% in May

Post by anon_investor »

Mel Lindauer wrote: Wed May 19, 2021 2:29 pm
neurosphere wrote: Wed May 19, 2021 2:04 pm
Escapevelocity wrote: Sun May 16, 2021 7:01 pm Interesting that the limit hasn’t changed in nearly 10’years. It should be due for an adjustment. Ironically I-bond limits are not indexed to inflation.
This made me laugh. :D
Me, too!
Why did they reduce the limit from $30k anyway?
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ray.james
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Re: I Bonds variable rate @ 3.54% in May

Post by ray.james »

anon_investor wrote: Wed May 19, 2021 2:32 pm
Mel Lindauer wrote: Wed May 19, 2021 2:29 pm
neurosphere wrote: Wed May 19, 2021 2:04 pm
Escapevelocity wrote: Sun May 16, 2021 7:01 pm Interesting that the limit hasn’t changed in nearly 10’years. It should be due for an adjustment. Ironically I-bond limits are not indexed to inflation.
This made me laugh. :D
Me, too!
Why did they reduce the limit from $30k anyway?
To kill the program? The treasury can get money much cheaper at larger quantities with more fixed term than citizens. And then there is a donor of money at even cheaper interest - the FED.
When in doubt, http://www.bogleheads.org/forum/viewtopic.php?f=1&t=79939
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Re: I Bonds variable rate @ 3.54% in May

Post by Mel Lindauer »

ray.james wrote: Wed May 19, 2021 2:59 pm
anon_investor wrote: Wed May 19, 2021 2:32 pm
Mel Lindauer wrote: Wed May 19, 2021 2:29 pm
neurosphere wrote: Wed May 19, 2021 2:04 pm
Escapevelocity wrote: Sun May 16, 2021 7:01 pm Interesting that the limit hasn’t changed in nearly 10’years. It should be due for an adjustment. Ironically I-bond limits are not indexed to inflation.
This made me laugh. :D
Me, too!
Why did they reduce the limit from $30k anyway?
To kill the program? The treasury can get money much cheaper at larger quantities with more fixed term than citizens. And then there is a donor of money at even cheaper interest - the FED.
That was my thought when I wrote this Forbes column back then titled "Treasury Killing Off U.S. Savings Bonds?" Here's a link:

https://www.forbes.com/sites/theboglehe ... d6ced2a8d8
Best Regards - Mel | | Semper Fi
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anon_investor
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Re: I Bonds variable rate @ 3.54% in May

Post by anon_investor »

Mel Lindauer wrote: Wed May 19, 2021 3:12 pm
ray.james wrote: Wed May 19, 2021 2:59 pm
anon_investor wrote: Wed May 19, 2021 2:32 pm
Mel Lindauer wrote: Wed May 19, 2021 2:29 pm
neurosphere wrote: Wed May 19, 2021 2:04 pm

This made me laugh. :D
Me, too!
Why did they reduce the limit from $30k anyway?
To kill the program? The treasury can get money much cheaper at larger quantities with more fixed term than citizens. And then there is a donor of money at even cheaper interest - the FED.
That was my thought when I wrote this Forbes column back then titled "Treasury Killing Off U.S. Savings Bonds?" Here's a link:

https://www.forbes.com/sites/theboglehe ... d6ced2a8d8
I bet the current 3.54% variable rate will probably peak interest in I Bonds at least in the short term. Or maybe it is just a bunch of BHs buying this month, hehe.
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Re: I Bonds variable rate @ 3.54% in May

Post by Mel Lindauer »

anon_investor wrote: Wed May 19, 2021 3:32 pm
Mel Lindauer wrote: Wed May 19, 2021 3:12 pm
ray.james wrote: Wed May 19, 2021 2:59 pm
anon_investor wrote: Wed May 19, 2021 2:32 pm
Mel Lindauer wrote: Wed May 19, 2021 2:29 pm

Me, too!
Why did they reduce the limit from $30k anyway?
To kill the program? The treasury can get money much cheaper at larger quantities with more fixed term than citizens. And then there is a donor of money at even cheaper interest - the FED.
That was my thought when I wrote this Forbes column back then titled "Treasury Killing Off U.S. Savings Bonds?" Here's a link:

https://www.forbes.com/sites/theboglehe ... d6ced2a8d8
I bet the current 3.54% variable rate will probably peak interest in I Bonds at least in the short term. Or maybe it is just a bunch of BHs buying this month, hehe.
Yes, based on the forum posts on the I Bond threads, I suspect that lots of folks who never heard of I Bonds, or who heard of them but thought they were for "old conservative investors" are jumping on the I Bond bandwagon now.
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 May 19, 2021 3:43 pm
anon_investor wrote: Wed May 19, 2021 3:32 pm
Mel Lindauer wrote: Wed May 19, 2021 3:12 pm
ray.james wrote: Wed May 19, 2021 2:59 pm
anon_investor wrote: Wed May 19, 2021 2:32 pm

Why did they reduce the limit from $30k anyway?
To kill the program? The treasury can get money much cheaper at larger quantities with more fixed term than citizens. And then there is a donor of money at even cheaper interest - the FED.
That was my thought when I wrote this Forbes column back then titled "Treasury Killing Off U.S. Savings Bonds?" Here's a link:

https://www.forbes.com/sites/theboglehe ... d6ced2a8d8
I bet the current 3.54% variable rate will probably peak interest in I Bonds at least in the short term. Or maybe it is just a bunch of BHs buying this month, hehe.
Yes, based on the forum posts on the I Bond threads, I suspect that lots of folks who never heard of I Bonds, or who heard of them but thought they were for "old conservative investors" are jumping on the I Bond bandwagon now.
I jumped on the bandwagon last year, purchasing I Bonds with a 0.2% fixed rate. I wish I had purchased some in 2019 when the fixed rate was 0.5%, those old 3% fixed I Bonds just sound crazy today. Wth such low inflation over the past decade, I can see why I Bonds were not all that appealing before.
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Re: I Bonds variable rate @ 3.54% in May

Post by LukeHeinz57 »

I jumped on the train! Got my $10K in I Bonds...For people who have been doing this awhile, are your .5% Fixed I Bonds from 2019 going to yield 4.04% in May? That's incredible, makes me wish I hadn't pooh pooh'd the idea of I Bonds when I read about them on Bogleheads a few years ago for the first time... :oops:
"Contentment", the only thing you ever truly need more of!
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anon_investor
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Re: I Bonds variable rate @ 3.54% in May

Post by anon_investor »

LukeHeinz57 wrote: Thu May 20, 2021 6:52 am I jumped on the train! Got my $10K in I Bonds...For people who have been doing this awhile, are your .5% Fixed I Bonds from 2019 going to yield 4.04% in May? That's incredible, makes me wish I hadn't pooh pooh'd the idea of I Bonds when I read about them on Bogleheads a few years ago for the first time... :oops:
I sadly did not jump on the train until 2020. But my 2020 I Bonds will be yielding 3.74% (0.2% fixed rate) in a few months 8-) . I am definitely jealous of the folks who will be getting 4.04%...
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Re: I Bonds variable rate @ 3.54% in May

Post by BogleMelon »

anon_investor wrote: Thu May 20, 2021 8:15 am
LukeHeinz57 wrote: Thu May 20, 2021 6:52 am I jumped on the train! Got my $10K in I Bonds...For people who have been doing this awhile, are your .5% Fixed I Bonds from 2019 going to yield 4.04% in May? That's incredible, makes me wish I hadn't pooh pooh'd the idea of I Bonds when I read about them on Bogleheads a few years ago for the first time... :oops:
I sadly did not jump on the train until 2020. But my 2020 I Bonds will be yielding 3.74% (0.2% fixed rate) in a few months 8-) . I am definitely jealous of the folks who will be getting 4.04%...
I had some 0.5% fixed rate ibonds that I sold couple of years ago. :oops:
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather
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Re: I Bonds variable rate @ 3.54% in May

Post by Broken Man 1999 »

Swimmer wrote: Mon May 17, 2021 4:44 pm Does anyone know what happens if one accidentally overbuys? Seems like this could happen a lot, particularly where gifts are involved.

For example, what if two relatives purchase a 10k I bond for a child as a gift?
I accidently bought more than my limit in 2000 or 2001. I received notification of my error, but I was allowed to keep all my I-bonds.

In retrospect, perhaps I should have accidently bought far more than I did. :D

Broken Man 1999
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Re: I Bonds variable rate @ 3.54% in May

Post by Broken Man 1999 »

anon_investor wrote: Thu May 20, 2021 8:15 am
LukeHeinz57 wrote: Thu May 20, 2021 6:52 am I jumped on the train! Got my $10K in I Bonds...For people who have been doing this awhile, are your .5% Fixed I Bonds from 2019 going to yield 4.04% in May? That's incredible, makes me wish I hadn't pooh pooh'd the idea of I Bonds when I read about them on Bogleheads a few years ago for the first time... :oops:
I sadly did not jump on the train until 2020. But my 2020 I Bonds will be yielding 3.74% (0.2% fixed rate) in a few months 8-) . I am definitely jealous of the folks who will be getting 4.04%...
You should be really jealous of those of us who will be getting 6.54% and 7.34%!

I regret I didn't keep adding to our stash continuously. I did add some, but the rates were so low and I sold them. Not so low today, but they are gone. My market timing of I-bonds was an utter failure. :oops:

Broken Man 1999
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Re: I Bonds variable rate @ 3.54% in May

Post by anon_investor »

Broken Man 1999 wrote: Thu May 20, 2021 8:45 am
anon_investor wrote: Thu May 20, 2021 8:15 am
LukeHeinz57 wrote: Thu May 20, 2021 6:52 am I jumped on the train! Got my $10K in I Bonds...For people who have been doing this awhile, are your .5% Fixed I Bonds from 2019 going to yield 4.04% in May? That's incredible, makes me wish I hadn't pooh pooh'd the idea of I Bonds when I read about them on Bogleheads a few years ago for the first time... :oops:
I sadly did not jump on the train until 2020. But my 2020 I Bonds will be yielding 3.74% (0.2% fixed rate) in a few months 8-) . I am definitely jealous of the folks who will be getting 4.04%...
You should be really jealous of those of us who will be getting 6.54% and 7.34%!

I regret I didn't keep adding to our stash continuously. I did add some, but the rates were so low and I sold them. Not so low today, but they are gone. My market timing of I-bonds was an utter failure. :oops:

Broken Man 1999
6.54%-7.34%! Wow. How many people would love to have their entire fixed income allocation paying that much right now? Total Bond only pays 1.3% right now...
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Re: I Bonds variable rate @ 3.54% in May

Post by snowman »

Let me ask you all a simple question, as I never even heard of ibonds. Are ibonds better choice than HYS account paying 0.5%? It appears to be, so is there any downside to it, besides not being able to touch it for a year? It seems that after 1 year period, you can sell at any time without any penalty, and you get 1099-INT from TD only after you sell, not annually. That’s my summary from reading this entire thread. Did I get this right? Am I missing something important? Is this the proverbial free lunch I never heard of? I feel like I am really missing something important here!

Thank you!
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Re: I Bonds variable rate @ 3.54% in May

Post by BogleMelon »

snowman wrote: Thu May 20, 2021 9:51 am Let me ask you all a simple question, as I never even heard of ibonds. Are ibonds better choice than HYS account paying 0.5%? It appears to be, so is there any downside to it, besides not being able to touch it for a year? It seems that after 1 year period, you can sell at any time without any penalty, and you get 1099-INT from TD only after you sell, not annually. That’s my summary from reading this entire thread. Did I get this right? Am I missing something important? Is this the proverbial free lunch I never heard of? I feel like I am really missing something important here!

Thank you!
You are missing that there is a 3-months of interest penalty if you sold before 5 years.
Another downside is having to have another account (a bit layer of complicating your personal finances). Also, ibonds is updating its variable rate every 6 months. So now it is better than the HYS account, in 6 months or next year, who knows?
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather
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Re: I Bonds variable rate @ 3.54% in May

Post by Angst »

snowman wrote: Thu May 20, 2021 9:51 am Let me ask you all a simple question, as I never even heard of ibonds... [Snip...]
Here's a good place to check out:
https://www.bogleheads.org/wiki/I_savings_bonds
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Re: I Bonds variable rate @ 3.54% in May

Post by ChiKid24 »

Some words of warning for those that are looking to make their first I Bonds purchase this month. I set up two accounts on the TD website last month, one for me and one for our trust with intention of making my purchases at the end of this month. I went in to access the accounts today as I had heard that the site can be tough to navigate, so figured I would make my purchases now to avoid risking end of month in case there are delays.

Well sure enough, I am locked out of both of my accounts for some reason. I call the TD customer service and they say that I need to print out an Account Authorization form (Form 5444) from their website, have the form signed at my bank by an authorized officer, and then snail mail the form back to Treasury Direct in order to access my account. I explained that my bank doesn't have any physical branch and the lady said I can go to my county court of records and have the form filled out. HUH? Why is this necessary? What year are we in?

Needless to say, I don't think I'll be able to get this all completed and ready to go for a purchase this month. Beyond frustrating. I had heard the horror stories about the clunky website, but this is just plain annoying.
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Re: I Bonds variable rate @ 3.54% in May

Post by MishkaWorries »

snowman wrote: Thu May 20, 2021 9:51 am Let me ask you all a simple question, as I never even heard of ibonds. Are ibonds better choice than HYS account paying 0.5%? It appears to be, so is there any downside to it, besides not being able to touch it for a year? It seems that after 1 year period, you can sell at any time without any penalty, and you get 1099-INT from TD only after you sell, not annually. That’s my summary from reading this entire thread. Did I get this right? Am I missing something important? Is this the proverbial free lunch I never heard of? I feel like I am really missing something important here!

Thank you!
If you sell after one year but before five years, you lose 3 months of interest. That is why you see 0 interest paid in the first three months of holding the bonds. After five year mark, your interest paid jumps up with the lagging three months interest.

No free lunch. I-bonds have a negative return after taxes paid and they will never appreciate more than the rate of inflation.
We plan. G-d laughs.
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Re: I Bonds variable rate @ 3.54% in May

Post by MishkaWorries »

ChiKid24 wrote: Thu May 20, 2021 10:01 am Some words of warning for those that are looking to make their first I Bonds purchase this month. I set up two accounts on the TD website last month, one for me and one for our trust with intention of making my purchases at the end of this month. I went in to access the accounts today as I had heard that the site can be tough to navigate, so figured I would make my purchases now to avoid risking end of month in case there are delays.

Well sure enough, I am locked out of both of my accounts for some reason. I call the TD customer service and they say that I need to print out an Account Authorization form (Form 5444) from their website, have the form signed at my bank by an authorized officer, and then snail mail the form back to Treasury Direct in order to access my account. I explained that my bank doesn't have any physical branch and the lady said I can go to my county court of records and have the form filled out. HUH? Why is this necessary? What year are we in?

Needless to say, I don't think I'll be able to get this all completed and ready to go for a purchase this month. Beyond frustrating. I had heard the horror stories about the clunky website, but this is just plain annoying.
My wife and I opened our TD accounts at the same time. Mine went through no problem but she had to do the signature guarantee. We just went to our credit union and they did their stamp thing.

Since you don't have a local bank, do you have a brokerage with local offices, like Schwab or Fidelity? They can do the signature guarantee too.
We plan. G-d laughs.
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Re: I Bonds variable rate @ 3.54% in May

Post by Angst »

ChiKid24 wrote: Thu May 20, 2021 10:01 am Some words of warning for those that are looking to make their first I Bonds purchase this month [Snip...]
Can you provide any insight into what you might have done that got you locked out of TD? This would be helpful.
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Re: I Bonds variable rate @ 3.54% in May

Post by HomeStretch »

As another data point, spouse/I set up two entity accounts (for two individual trusts) this month and had no issue with the set-up or buying I-Bonds in each account.
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Re: I Bonds variable rate @ 3.54% in May

Post by Angst »

HomeStretch wrote: Thu May 20, 2021 10:11 am As another data point, spouse/I set up two entity accounts (for two individual trusts) this month and had no issue with the set-up or buying I-Bonds in each account.
I bet you were aware of (or at least quickly discovered and followed) TD's requirement that you NEVER use your browser's Back-Arrow or Back-Page buttons, nor the [Alt-Left arrow] keyboard shortcut. I think failing to strictly behave per TD rules will exit you from your session and if you have trouble logging back in correctly or you repeat the "back page" error again... one thing leads to another leading to a lockout, at least I think this is perhaps the most common explanation.
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Re: I Bonds variable rate @ 3.54% in May

Post by Broken Man 1999 »

Angst wrote: Thu May 20, 2021 10:09 am
ChiKid24 wrote: Thu May 20, 2021 10:01 am Some words of warning for those that are looking to make their first I Bonds purchase this month [Snip...]
Can you provide any insight into what you might have done that got you locked out of TD? This would be helpful.
I almost set up a TD account for wife, but I received an email stating she would have to do the signature dance also. My plans are to buy $10,000 now in my account, and $10,000 in her account at the next rate setting.

So she has months to get the account squared away.

Her issue is this:

"....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...."

I double/tripled checked all the info sent, but seems something is amiss.

Broken Man 1999
Last edited by Broken Man 1999 on Thu May 20, 2021 10:27 am, edited 1 time in total.
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Re: I Bonds variable rate @ 3.54% in May

Post by LukeHeinz57 »

I have had no issues with the website...I am sorry for those that have though. It's not great, but worth the hassle to me anyway.
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HueyLD
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Re: I Bonds variable rate @ 3.54% in May

Post by HueyLD »

Broken Man 1999 wrote: Thu May 20, 2021 10:26 am I almost set up a TD account for wife, but I received an email stating she would have to do the signature dance also. My plans are to buy $10,000 now in my account, and $10,000 in her account at the next rate setting.

So she has months to get the account squared away.

Her issue is this:

"....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...."

I double/tripled checked all the info sent, but seems something is amiss.
Is her credit frozen?
Angst
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Re: I Bonds variable rate @ 3.54% in May

Post by Angst »

Broken Man 1999 wrote: Thu May 20, 2021 10:26 am
Angst wrote: Thu May 20, 2021 10:09 am
ChiKid24 wrote: Thu May 20, 2021 10:01 am Some words of warning for those that are looking to make their first I Bonds purchase this month [Snip...]
Can you provide any insight into what you might have done that got you locked out of TD? This would be helpful.
I almost set up a TD account for wife, but I received an email stating she would have to do the signature dance also. [Snip...]
But your situation sounds different to me. ChiKid24 stated that he had already completed setup for both accounts earlier in the month and was simply logging in now to make a purchase.
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Re: I Bonds variable rate @ 3.54% in May

Post by MishkaWorries »

LukeHeinz57 wrote: Thu May 20, 2021 10:27 am I have had no issues with the website...I am sorry for those that have though. It's not great, but worth the hassle to me anyway.
Totally worth it. The signature guarantee isn't that big of a deal if you have a local bank or brokerage with local offices.

We opened our accounts in January. I thought it would be a big hassle because of COVID. But all we had to do was make an appointment with our bank and got in and out in about 10-15 minutes total. We mailed the form and a week to ten days later the wife's account was unlocked.
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Re: I Bonds variable rate @ 3.54% in May

Post by surfstar »

LukeHeinz57 wrote: Thu May 20, 2021 10:27 am I have had no issues with the website...I am sorry for those that have though. It's not great, but worth the hassle to me anyway.
Ditto for both of us. Guess we got lucky?!?
ChiKid24
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Re: I Bonds variable rate @ 3.54% in May

Post by ChiKid24 »

Angst wrote: Thu May 20, 2021 10:33 am
Broken Man 1999 wrote: Thu May 20, 2021 10:26 am
Angst wrote: Thu May 20, 2021 10:09 am
ChiKid24 wrote: Thu May 20, 2021 10:01 am Some words of warning for those that are looking to make their first I Bonds purchase this month [Snip...]
Can you provide any insight into what you might have done that got you locked out of TD? This would be helpful.
I almost set up a TD account for wife, but I received an email stating she would have to do the signature dance also. [Snip...]
But your situation sounds different to me. ChiKid24 stated that he had already completed setup for both accounts earlier in the month and was simply logging in now to make a purchase.
My situation is actually the same. The CX rep said they sent me the same email Broken Man quoted about a week after I opened the accounts. I've checked my email and I have no such record. Regardless, the effect is the same. I need to go to the bank and have the forms signed and stamped.

The one thing that I'm thinking could have triggered is that I had linked my Merrill Lynch Cash Management account to TD. That account is in my name alone. So perhaps the issue is I linked that account for both my own account and the trust account and the Merrill account isn't in the name of the trust. If that's the case, perhaps I need to have two separate bank accounts for each TD account. The one in my name needs to link to a bank account in my name and the one in the name of our trust needs to link to a bank account with the trust name. Just guessing.

Also, does anyone know if the form needs to be signed by the same bank as the funding bank? Merrill Lynch doesn't have a local office, but they are owned by Bank of America. It would be simple to go there and have them sign the form. The form doesn't actually require an account number, it's basically just an authorization form.
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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: Thu May 20, 2021 10:59 am
Angst wrote: Thu May 20, 2021 10:33 am
Broken Man 1999 wrote: Thu May 20, 2021 10:26 am
Angst wrote: Thu May 20, 2021 10:09 am
ChiKid24 wrote: Thu May 20, 2021 10:01 am Some words of warning for those that are looking to make their first I Bonds purchase this month [Snip...]
Can you provide any insight into what you might have done that got you locked out of TD? This would be helpful.
I almost set up a TD account for wife, but I received an email stating she would have to do the signature dance also. [Snip...]
But your situation sounds different to me. ChiKid24 stated that he had already completed setup for both accounts earlier in the month and was simply logging in now to make a purchase.
My situation is actually the same. The CX rep said they sent me the same email Broken Man quoted about a week after I opened the accounts. I've checked my email and I have no such record. Regardless, the effect is the same. I need to go to the bank and have the forms signed and stamped.

The one thing that I'm thinking could have triggered is that I had linked my Merrill Lynch Cash Management account to TD. That account is in my name alone. So perhaps the issue is I linked that account for both my own account and the trust account and the Merrill account isn't in the name of the trust. If that's the case, perhaps I need to have two separate bank accounts for each TD account. The one in my name needs to link to a bank account in my name and the one in the name of our trust needs to link to a bank account with the trust name. Just guessing.

Also, does anyone know if the form needs to be signed by the same bank as the funding bank? Merrill Lynch doesn't have a local office, but they are owned by Bank of America. It would be simple to go there and have them sign the form. The form doesn't actually require an account number, it's basically just an authorization form.
I opened my TD account at the end of 2019 and my spouse open early 2020. Our accounts were created without issue, separated by months but the same experience, maybe a week after we had opened our respective accounts the accounts were locked. Fortunately, we were able to unlock them by phone and providing answers to our secret questions. We are pretty sure our accounts were locked after we added additional bank accounts online - the only action we did (though I understand now you have to mail in a form in to do this). We log into our TD accounts once a month, just to make sure we do not have any issues (but also to check on the interest to update our spreadsheet :beer ), but we haven't had any problems after that first lockout within a week of opening our accounts.
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Re: I Bonds variable rate @ 3.54% in May

Post by snowman »

Thanks to everyone that replied to my question, and also thanks for the link provided. It seems like the only thing I missed is the 5 year window with 3 months of interest not paid.

I think it makes sense to purchase 10K for both of us. Here is our situation. We are early retirees, 12% tax bracket, all investments in tax deferred accounts, selling the house in couple of weeks. When the proceeds hit, we will have large taxable account for the first time in our lives. Most will be invested in VTI and VXUS, but I want to keep large enough stash in cash for ACA income management purposes. We will have 30K earning 3% at LMCU, and 40K earning 3.3% at ETFCU. There will be roughly 100K leftover earning 0.5%, so that’s the pot I am thinking about. It would not be touched for 5 years, unless we decide to buy a house somewhere (very unlikely). So about 5-6 year timeframe. Don’t want that money in stocks, and it seems ibonds are better for that purpose than regular bonds.

What do you guys think?
drk
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Re: I Bonds variable rate @ 3.54% in May

Post by drk »

anon_investor wrote: Wed May 19, 2021 3:32 pm I bet the current 3.54% variable rate will probably peak interest in I Bonds at least in the short term. Or maybe it is just a bunch of BHs buying this month, hehe.
Anecdotally, the /r/Bogleheads subreddit is suddenly filled with recommendations to buy Series I bonds because of that rate, typically without noting/understanding that it's an annualized rate that may be limited to six months.
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
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anon_investor
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Re: I Bonds variable rate @ 3.54% in May

Post by anon_investor »

drk wrote: Thu May 20, 2021 11:44 am
anon_investor wrote: Wed May 19, 2021 3:32 pm I bet the current 3.54% variable rate will probably peak interest in I Bonds at least in the short term. Or maybe it is just a bunch of BHs buying this month, hehe.
Anecdotally, the /r/Bogleheads subreddit is suddenly filled with recommendations to buy Series I bonds because of that rate, typically without noting/understanding that it's an annualized rate that may be limited to six months.
If you do the math, even if the composite rate is 0% for the following 6 months, if you redeem after the required 1 year holding period, you would still get a 1.77% return, which is state income tax exempt, loss of 3 month interests of 0% is $0 lost. That is significantly better than any 1 year CD. There are no comparable fixed income offerings available that can provide that kind of yield without credit or duration risk, which I Bonds do not have. Further the expectation is that the 2nd 6 month period will have a composite rate higher than 0%. But yes, no one should expect I Bonds to consistently have a composite rate of 3.54%.

My first purchase was I Bonds was in 2020, with a 0.2% fixed rate. The known variable rates I have/will have are: 2.02%, 1.06%, 1.68%, 3.54%. Pretty good if you ask me in this low interest rate environment.
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Re: I Bonds variable rate @ 3.54% in May

Post by MishkaWorries »

snowman wrote: Thu May 20, 2021 11:14 am Thanks to everyone that replied to my question, and also thanks for the link provided. It seems like the only thing I missed is the 5 year window with 3 months of interest not paid.

I think it makes sense to purchase 10K for both of us. Here is our situation. We are early retirees, 12% tax bracket, all investments in tax deferred accounts, selling the house in couple of weeks. When the proceeds hit, we will have large taxable account for the first time in our lives. Most will be invested in VTI and VXUS, but I want to keep large enough stash in cash for ACA income management purposes. We will have 30K earning 3% at LMCU, and 40K earning 3.3% at ETFCU. There will be roughly 100K leftover earning 0.5%, so that’s the pot I am thinking about. It would not be touched for 5 years, unless we decide to buy a house somewhere (very unlikely). So about 5-6 year timeframe. Don’t want that money in stocks, and it seems ibonds are better for that purpose than regular bonds.

What do you guys think?
You are limited to $10,000 per year per SSN or EIN plus $5,000 in tax return.

Not sure I-bonds will make much of a difference if you have $100,000 in savings accounts.

Edited to add: every bit helps so I-bonds are very good for this purpose but you'll need plans for the remaining amount.
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drk
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Re: I Bonds variable rate @ 3.54% in May

Post by drk »

anon_investor wrote: Thu May 20, 2021 11:52 am If you do the math [...]
You don't have to sell me on anything. I find the sub's I Bond mania humorous because it was a rapid change from "bonds are horrible for young investors" to "buy these bonds!" It's an example of piqued interest in the comment I quoted.
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
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Re: I Bonds variable rate @ 3.54% in May

Post by snowman »

MishkaWorries wrote: Thu May 20, 2021 11:59 am
snowman wrote: Thu May 20, 2021 11:14 am Thanks to everyone that replied to my question, and also thanks for the link provided. It seems like the only thing I missed is the 5 year window with 3 months of interest not paid.

I think it makes sense to purchase 10K for both of us. Here is our situation. We are early retirees, 12% tax bracket, all investments in tax deferred accounts, selling the house in couple of weeks. When the proceeds hit, we will have large taxable account for the first time in our lives. Most will be invested in VTI and VXUS, but I want to keep large enough stash in cash for ACA income management purposes. We will have 30K earning 3% at LMCU, and 40K earning 3.3% at ETFCU. There will be roughly 100K leftover earning 0.5%, so that’s the pot I am thinking about. It would not be touched for 5 years, unless we decide to buy a house somewhere (very unlikely). So about 5-6 year timeframe. Don’t want that money in stocks, and it seems ibonds are better for that purpose than regular bonds.

What do you guys think?
You are limited to $10,000 per year per SSN or EIN plus $5,000 in tax return.

Not sure I-bonds will make much of a difference if you have $100,000 in savings accounts.

Edited to add: every bit helps so I-bonds are very good for this purpose but you'll need plans for the remaining amount.
Thanks, MW. That's what I was thinking as well. We are not high spenders, so I anticipate withdrawing 10K-15K per year. I figured the 0.5% interest pot would be drained first, then I bonds, then HYSA. I am not an expert on bonds at all, it just seemed reading this thread that it should beat 0.5% sitting at Ally. I agree overall difference will be small, but if the money is just sitting somewhere, it might as well earn higher interest. Is there ever a scenario where 0.5% will beat I bond return over the next 5 years?
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Re: I Bonds variable rate @ 3.54% in May

Post by Old Guy »

I bought $27,000 worth of I bonds in 2001 expecting to use them to fund my son’s college tuition. I didn’t need them. I have nineteen $1,000 bonds left now worth over $51,000. I’ve started buying I bonds again.
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Re: I Bonds variable rate @ 3.54% in May

Post by rob »

anon_investor wrote: Thu May 20, 2021 8:15 am
LukeHeinz57 wrote: Thu May 20, 2021 6:52 am I jumped on the train! Got my $10K in I Bonds...For people who have been doing this awhile, are your .5% Fixed I Bonds from 2019 going to yield 4.04% in May? That's incredible, makes me wish I hadn't pooh pooh'd the idea of I Bonds when I read about them on Bogleheads a few years ago for the first time... :oops:
I sadly did not jump on the train until 2020. But my 2020 I Bonds will be yielding 3.74% (0.2% fixed rate) in a few months 8-) . I am definitely jealous of the folks who will be getting 4.04%...
Current me wants to slap past me for not maxing out the 60K back when fixed rates were 3 1/2 and could buy them on a credit card to get rewards. I KNEW they were a great deal but I didn't load up cause I didn't have the $ and still invest in stocks..... Current me wants to send past me cash in a brown baggie :D
| Rob | Its a dangerous business going out your front door. - J.R.R.Tolkien
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