I Bonds Mega Thread (I Bond Heads Rejoice!)

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

Post by jmorgans »

I have been telling my friends about the fantastic rates being offered on I-Bonds. Then they come back to me the next day with “my financial advisor said it’s a bad deal.” No sh$& it’s a bad deal! For your advisor who can’t get a commission!
GuySmiley
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by GuySmiley »

GuySmiley wrote: Sat Oct 16, 2021 8:05 am My children each have a small amount of income this year, think $60 or so. They file taxes as I feel it may be appropriate to justify the Roth IRA contribution I make in their names. If I were so inclined, could I do the over-prepay technique and get them each paper I bond refunds far in excess of their income? Does anyone know if FreeTaxUSA.com handles this I bond refund option?
Quoting my earlier post after some research. Form 8888 clearly allows the option of naming other people as the paper bond owners. I could see over-prepaying tax payments for each kid (with my money), and getting back paper bonds in my name from their return. Limited by number of kids × $5000. For example, 2 kid returns plus parents' own return could mean $15K in paper bonds. I interpret this as allowed and am inclined to test it in a few months, but am interested in other opinions.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by MKP »

Mel Lindauer wrote: Sat Oct 23, 2021 8:21 pm
maywood wrote: Sat Oct 23, 2021 7:33 pm The Treasury Direct website says this:

"The purchase amount of a gift bond counts toward the annual limit of the recipient, not the giver."

So it's my understanding that if Dad is buying his own $10K of I bonds, you can't also buy him another $10K as a gift. You could buy him $10K as a gift if he wasn't buying any for himself.

Where does it say "Gifted I-bonds only count against the recipient's limit in the year they are transferred to the recipient, not the year they are bought for the recipient". ETA: Oh I do see where it says that on another part of the TD website! Those two statements (both on the TD website) seem to contradict each other. Seems like the statement you found is more recent since it is on the FAQ page of the Concerning the Change in the Annual Purchase Limit.

That's interesting, I did not know you could purchase a bond for someone else in your own account and then "deliver" it at a later date. I wonder if there is a time limit on delivering it.

maywood
Seems like it would be a good strategy for a couple to double up when the rates are high, like now (buy the limit for themselves and the limit as a gift to their spouse) and only gift them later when the rates are low. That way, they're getting $40k at the good rate and nothing when the rates are low and they wouldn't be buying anyway.
How would my child be able to cash them out and maybe move to their UTMA at Vanguard if they don't have a checking account?
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whodidntante
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by whodidntante »

MKP wrote: Sat Oct 23, 2021 9:38 pm
Mel Lindauer wrote: Sat Oct 23, 2021 8:21 pm
maywood wrote: Sat Oct 23, 2021 7:33 pm The Treasury Direct website says this:

"The purchase amount of a gift bond counts toward the annual limit of the recipient, not the giver."

So it's my understanding that if Dad is buying his own $10K of I bonds, you can't also buy him another $10K as a gift. You could buy him $10K as a gift if he wasn't buying any for himself.

Where does it say "Gifted I-bonds only count against the recipient's limit in the year they are transferred to the recipient, not the year they are bought for the recipient". ETA: Oh I do see where it says that on another part of the TD website! Those two statements (both on the TD website) seem to contradict each other. Seems like the statement you found is more recent since it is on the FAQ page of the Concerning the Change in the Annual Purchase Limit.

That's interesting, I did not know you could purchase a bond for someone else in your own account and then "deliver" it at a later date. I wonder if there is a time limit on delivering it.

maywood
Seems like it would be a good strategy for a couple to double up when the rates are high, like now (buy the limit for themselves and the limit as a gift to their spouse) and only gift them later when the rates are low. That way, they're getting $40k at the good rate and nothing when the rates are low and they wouldn't be buying anyway.
How would my child be able to cash them out and maybe move to their UTMA at Vanguard if they don't have a checking account?
First, they need a signature guarantee. :)
Grt2bOutdoors
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Grt2bOutdoors »

whodidntante wrote: Sat Oct 23, 2021 9:40 pm
MKP wrote: Sat Oct 23, 2021 9:38 pm
Mel Lindauer wrote: Sat Oct 23, 2021 8:21 pm
maywood wrote: Sat Oct 23, 2021 7:33 pm The Treasury Direct website says this:

"The purchase amount of a gift bond counts toward the annual limit of the recipient, not the giver."

So it's my understanding that if Dad is buying his own $10K of I bonds, you can't also buy him another $10K as a gift. You could buy him $10K as a gift if he wasn't buying any for himself.

Where does it say "Gifted I-bonds only count against the recipient's limit in the year they are transferred to the recipient, not the year they are bought for the recipient". ETA: Oh I do see where it says that on another part of the TD website! Those two statements (both on the TD website) seem to contradict each other. Seems like the statement you found is more recent since it is on the FAQ page of the Concerning the Change in the Annual Purchase Limit.

That's interesting, I did not know you could purchase a bond for someone else in your own account and then "deliver" it at a later date. I wonder if there is a time limit on delivering it.

maywood
Seems like it would be a good strategy for a couple to double up when the rates are high, like now (buy the limit for themselves and the limit as a gift to their spouse) and only gift them later when the rates are low. That way, they're getting $40k at the good rate and nothing when the rates are low and they wouldn't be buying anyway.
How would my child be able to cash them out and maybe move to their UTMA at Vanguard if they don't have a checking account?
First, they need a signature guarantee. :)
No they don't. If the child is a minor, the custodian is the one making the decisions on their behalf, including liquidation of the bond. The proceeds will then be deposited in the linked bank account. The custodian can then either open the UTMA at Vanguard and/or simply transfer the proceeds into the UTMA account if already existing at Vanguard.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Mudpuppy »

I'm personally sticking to my original plan from the start of the year: $5k purchased in May and another $5k scheduled for purchase on Tuesday (October).

The only thing this rate news is making me consider is buying my full $10k in January 2022, since I have funds languishing in a HYSA earning a much smaller amount.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by jgalt133 »

Whakamole wrote: Wed Oct 20, 2021 9:39 am There is an issue if you buy a bond in a personal account and transfer it to the trust - TD somehow thinks you bought all bonds in the trust account, exceeding the limit for a single account. This is one case where you don't want to put everything into a trust.
This makes sense, but would it be possible to transfer to the trust sometime later, say a year, without issues?
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by jgalt133 »

SnowBog wrote: Thu Oct 21, 2021 2:25 am Started buying I Bonds in our living trust accounts (one for each spouse) this year as well.
Does each spouse have a separate living trust or do you have a common living trust (on which you are both grantors/trustees) and you just created two entity accounts, one with each of your SSNs?
Shorty
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Shorty »

I love it!!!
jmorgans wrote: Sat Oct 23, 2021 8:58 pm I have been telling my friends about the fantastic rates being offered on I-Bonds. Then they come back to me the next day with “my financial advisor said it’s a bad deal.” No sh$& it’s a bad deal! For your advisor who can’t get a commission!
Bama12
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Bama12 »

Shorty wrote: Sun Oct 24, 2021 12:15 am I love it!!!
jmorgans wrote: Sat Oct 23, 2021 8:58 pm I have been telling my friends about the fantastic rates being offered on I-Bonds. Then they come back to me the next day with “my financial advisor said it’s a bad deal.” No sh$& it’s a bad deal! For your advisor who can’t get a commission!
The financial advisor is right.
MKP
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by MKP »

Bama12 wrote: Sun Oct 24, 2021 2:48 am
Shorty wrote: Sun Oct 24, 2021 12:15 am I love it!!!
jmorgans wrote: Sat Oct 23, 2021 8:58 pm I have been telling my friends about the fantastic rates being offered on I-Bonds. Then they come back to me the next day with “my financial advisor said it’s a bad deal.” No sh$& it’s a bad deal! For your advisor who can’t get a commission!
The financial advisor is right.
tell us more.
donall
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by donall »

jgalt133 wrote: Sat Oct 23, 2021 11:40 pm
Whakamole wrote: Wed Oct 20, 2021 9:39 am There is an issue if you buy a bond in a personal account and transfer it to the trust - TD somehow thinks you bought all bonds in the trust account, exceeding the limit for a single account. This is one case where you don't want to put everything into a trust.
This makes sense, but would it be possible to transfer to the trust sometime later, say a year, without issues?
You will get an automatic email from Treasury Direct indicating you have exceeded the yearly amount and then no further action.
SnowBog
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by SnowBog »

jgalt133 wrote: Sat Oct 23, 2021 11:41 pm
SnowBog wrote: Thu Oct 21, 2021 2:25 am Started buying I Bonds in our living trust accounts (one for each spouse) this year as well.
Does each spouse have a separate living trust or do you have a common living trust (on which you are both grantors/trustees) and you just created two entity accounts, one with each of your SSNs?
Separate living trust for each spouse.

So each spouse has an individual account and an entity account - both using their SSN. The individual account is in their name, such as SnowBog. The entity account is in the name of the trust, such as SnowBog or successor trustees of SnowBog Living Trust dated X as amended.
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Re: I Bonds variable rate @ 3.54% in May

Post by Mel Lindauer »

noriskfinance wrote: Fri Apr 16, 2021 9:13 am Many thanks. This was not at all intuitive without your directions. Appreciate it.
IowaFarmWife wrote: Fri Apr 16, 2021 7:58 am
noriskfinance wrote: Fri Apr 16, 2021 7:47 am I placed an order to purchase at the end of the month in treasury direct. No way to change that not to execute this month now is it? I can see the order in my history page but no way to cancel or edit it.
I just changed mine the other day when I saw the increase. Log into TD, at the top menu go to "Manage Direct," and in the first column, under "manage securities" go to the link "view/delete pending purchase" and that will allow you to delete the pending purchase. Then, go back to Buy Direct and reenter the amount and the date that you want to make the purchase.
It's your choice, but IMO, there was no reason not to buy this month to get the 3.54% for the first six months and THEN enjoy the new 7+% for the next six months.

I'm concerned that some Bogleheads don't understand that they will still get the higher rate if they buy this month, but that they will lock in the attractive 3.54% for the first six months and then enjoy that higher rate for the next six months.
Best Regards - Mel | | Semper Fi
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whodidntante
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by whodidntante »

It is with great anguish that I report my purchase of 20k of series I bonds. 10k for me, 10k for my business. I look forward to losing money by my marginal tax rate! :|

Did anyone get the plate number of that inflation truck that hit us? :oops:
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by MishkaWorries »

whodidntante wrote: Sun Oct 24, 2021 12:42 pm
Did anyone get the plate number of that inflation truck that hit us? :oops:
All I got was the first three letters. F E D
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jgalt133
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by jgalt133 »

whodidntante wrote: Sun Oct 24, 2021 12:42 pm It is with great anguish that I report my purchase of 20k of series I bonds. 10k for me, 10k for my business. I look forward to losing money by my marginal tax rate! :|
I briefly considered purchasing $10k with my single-member LLC, but was worried about locking up the funds in my business. My business does not need deep cash reserves. What was your rationale for using your business to purchase $10k? Just a way to get around the purchase limit?
jgalt133
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by jgalt133 »

SnowBog wrote: Sun Oct 24, 2021 9:50 am Separate living trust for each spouse.

So each spouse has an individual account and an entity account - both using their SSN. The individual account is in their name, such as SnowBog. The entity account is in the name of the trust, such as SnowBog or successor trustees of SnowBog Living Trust dated X as amended.
Thanks! My spouse and I have a single living trust, so that route would not work. If you don't mind my asking, what was the rationale for setting up separate living trusts? I'm just curious if this is something I should consider at some point.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by SnowBog »

jgalt133 wrote: Sun Oct 24, 2021 12:57 pm
SnowBog wrote: Sun Oct 24, 2021 9:50 am Separate living trust for each spouse.

So each spouse has an individual account and an entity account - both using their SSN. The individual account is in their name, such as SnowBog. The entity account is in the name of the trust, such as SnowBog or successor trustees of SnowBog Living Trust dated X as amended.
Thanks! My spouse and I have a single living trust, so that route would not work. If you don't mind my asking, what was the rationale for setting up separate living trusts? I'm just curious if this is something I should consider at some point.
It was setup as part of an estate plan, but also for buying extra I Bonds.
Last edited by SnowBog on Sun Oct 24, 2021 1:06 pm, edited 1 time in total.
jgalt133
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by jgalt133 »

Right now my bond allocation is 52% in in the total bond market, 15% in total international bond market and 33% in US treasuries. US treasuries are split between the G-fund and Vanguard inflation-protected securities (VAIPX). I'm debating selling some funds from either total bond market or VAIPX to max out my I-Bond purchases. Is this a sensible approach? This thread has opened my eyes to the benefits of I-bonds and I think it's a very sensible addition to my portfolio. I'm just not sure whether I should slowly increase my I-bond holdings as cash becomes available (while maintaining my overall equities/fixed income allocation), or if I should convert some existing bond holdings to I-Bond.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Mel Lindauer »

whodidntante wrote: Sun Oct 24, 2021 12:42 pm It is with great anguish that I report my purchase of 20k of series I bonds. 10k for me, 10k for my business. I look forward to losing money by my marginal tax rate! :|

Did anyone get the plate number of that inflation truck that hit us? :oops:
It wasn't a truck; it was a freight train!
Best Regards - Mel | | Semper Fi
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by MIretired »

jgalt133 wrote: Sun Oct 24, 2021 1:02 pm Right now my bond allocation is 52% in in the total bond market, 15% in total international bond market and 33% in US treasuries. US treasuries are split between the G-fund and Vanguard inflation-protected securities (VAIPX). I'm debating selling some funds from either total bond market or VAIPX to max out my I-Bond purchases. Is this a sensible approach? This thread has opened my eyes to the benefits of I-bonds and I think it's a very sensible addition to my portfolio. I'm just not sure whether I should slowly increase my I-bond holdings as cash becomes available (while maintaining my overall equities/fixed income allocation), or if I should convert some existing bond holdings to I-Bond.
It is my understanding that I put TIPS/funds in tax-defered, and Ibonds in taxable because Ibonds give you tax deferment, which you already had in tax-defered.
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whodidntante
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by whodidntante »

jgalt133 wrote: Sun Oct 24, 2021 12:56 pm
whodidntante wrote: Sun Oct 24, 2021 12:42 pm It is with great anguish that I report my purchase of 20k of series I bonds. 10k for me, 10k for my business. I look forward to losing money by my marginal tax rate! :|
I briefly considered purchasing $10k with my single-member LLC, but was worried about locking up the funds in my business. My business does not need deep cash reserves. What was your rationale for using your business to purchase $10k? Just a way to get around the purchase limit?
My sole proprietorship has no need for 10k that it can't even access for 11 months, so it was done to increase my purchase limits.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by MP46 »

Grt2bOutdoors wrote: Sat Oct 23, 2021 9:47 pm
whodidntante wrote: Sat Oct 23, 2021 9:40 pm
MKP wrote: Sat Oct 23, 2021 9:38 pm
Mel Lindauer wrote: Sat Oct 23, 2021 8:21 pm
maywood wrote: Sat Oct 23, 2021 7:33 pm The Treasury Direct website says this:

"The purchase amount of a gift bond counts toward the annual limit of the recipient, not the giver."

So it's my understanding that if Dad is buying his own $10K of I bonds, you can't also buy him another $10K as a gift. You could buy him $10K as a gift if he wasn't buying any for himself.

Where does it say "Gifted I-bonds only count against the recipient's limit in the year they are transferred to the recipient, not the year they are bought for the recipient". ETA: Oh I do see where it says that on another part of the TD website! Those two statements (both on the TD website) seem to contradict each other. Seems like the statement you found is more recent since it is on the FAQ page of the Concerning the Change in the Annual Purchase Limit.

That's interesting, I did not know you could purchase a bond for someone else in your own account and then "deliver" it at a later date. I wonder if there is a time limit on delivering it.

maywood
Seems like it would be a good strategy for a couple to double up when the rates are high, like now (buy the limit for themselves and the limit as a gift to their spouse) and only gift them later when the rates are low. That way, they're getting $40k at the good rate and nothing when the rates are low and they wouldn't be buying anyway.
How would my child be able to cash them out and maybe move to their UTMA at Vanguard if they don't have a checking account?
First, they need a signature guarantee. :)
No they don't. If the child is a minor, the custodian is the one making the decisions on their behalf, including liquidation of the bond. The proceeds will then be deposited in the linked bank account. The custodian can then either open the UTMA at Vanguard and/or simply transfer the proceeds into the UTMA account if already existing at Vanguard.
I just opened minor accounts for my kids through my account and put in a couple of K for each. As per the website, once they turn 18 they will be able to open their own TD account and I will be able to still have them linked but only to add more money and not to take the money out. Only risk is they can basically at 18 decide to cash all the money to go to Europe-not so bad or to buy dope-bad...
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by ivgrivchuck »

SnowBog wrote: Sun Oct 24, 2021 9:50 am
jgalt133 wrote: Sat Oct 23, 2021 11:41 pm
SnowBog wrote: Thu Oct 21, 2021 2:25 am Started buying I Bonds in our living trust accounts (one for each spouse) this year as well.
Does each spouse have a separate living trust or do you have a common living trust (on which you are both grantors/trustees) and you just created two entity accounts, one with each of your SSNs?
Separate living trust for each spouse.

So each spouse has an individual account and an entity account - both using their SSN. The individual account is in their name, such as SnowBog. The entity account is in the name of the trust, such as SnowBog or successor trustees of SnowBog Living Trust dated X as amended.
We did the same thing. I wrote the documents based on a template, got them notarized and... now we have two trusts. Surprisingly simple. Even if I got some technicality wrong, the chance of somebody contesting the trust should be tiny...
25% VTI | 25% VXUS | 12.5% AVUV | 10% AVDV | 2.5% VWO | 25% BND/SCHR/SCHP
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Mel Lindauer
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Mel Lindauer »

MIretired wrote: Sun Oct 24, 2021 2:05 pm
jgalt133 wrote: Sun Oct 24, 2021 1:02 pm Right now my bond allocation is 52% in in the total bond market, 15% in total international bond market and 33% in US treasuries. US treasuries are split between the G-fund and Vanguard inflation-protected securities (VAIPX). I'm debating selling some funds from either total bond market or VAIPX to max out my I-Bond purchases. Is this a sensible approach? This thread has opened my eyes to the benefits of I-bonds and I think it's a very sensible addition to my portfolio. I'm just not sure whether I should slowly increase my I-bond holdings as cash becomes available (while maintaining my overall equities/fixed income allocation), or if I should convert some existing bond holdings to I-Bond.
It is my understanding that I put TIPS/funds in tax-defered, and Ibonds in taxable because Ibonds give you tax deferment, which you already had in tax-defered.
You're correct. You wouldn't want to put tax-deferred I Bonds in a tax-deferred account, even if you could, since they're already tax-deferred for up to 30 years.

On the other hand, TIPS can use the tax-deferred protection.
Best Regards - Mel | | Semper Fi
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Startled Cat »

I've always held the opinion that I Bonds aren't worth bothering with. Even if the rates suddenly became attractive, the purchase limits are too low to make them very interesting. And I've heard terrible, terrible things about TreasuryDirect.

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

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

I'm just glad I ran into this before I actually transferred any money.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Mudpuppy »

Startled Cat wrote: Sun Oct 24, 2021 4:11 pm Tried to sign up for an account at TreasuryDirect, and immediately got this email:
Thanks again for opening a TreasuryDirect account. We are having difficulty verifying the information you provided when opening your account. For your protection, please complete the Account Authorization form https://www.treasurydirect.gov/pdf/rs/acctauth.pdf and mail it to Treasury Retail Securities Site, P.O. Box 7015, Minneapolis, MN 55480-7015. A hold has been placed on your account that will prevent you from accessing your account. After we receive and approve the Account Authorization form, the hold on your account will be removed. When you log into your account, check the Investor InBox section of your Treasury Direct account for an important message.
The form further explains that the completed form needs to be certified by a "certifying officer" at a financial instituation, and a notary's certification is not acceptable. I've never even heard of this. There's no way I'm going to put in the time to navigate this mess. I guess I'll go back to ignoring I Bonds. Oh well...

I'm just glad I ran into this before I actually transferred any money.
You have until April to buy I-Bonds at the 7% six-month rate, so I'm not sure why you think you won't have time to navigate this. If you don't want to hassle with getting the medallion signature from your bank/credit union, that's another matter entirely, and fully up to you to decide. But you do have the time.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Startled Cat »

Mudpuppy wrote: Sun Oct 24, 2021 4:14 pm You have until April to buy I-Bonds at the 7% six-month rate, so I'm not sure why you think you won't have time to navigate this. If you don't want to hassle with getting the medallion signature from your bank/credit union, that's another matter entirely, and fully up to you to decide. But you do have the time.
I know there is no imminent deadline. I'm saying it doesn't seem worth the hassle.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by SnowBog »

Startled Cat wrote: Sun Oct 24, 2021 4:18 pm
Mudpuppy wrote: Sun Oct 24, 2021 4:14 pm You have until April to buy I-Bonds at the 7% six-month rate, so I'm not sure why you think you won't have time to navigate this. If you don't want to hassle with getting the medallion signature from your bank/credit union, that's another matter entirely, and fully up to you to decide. But you do have the time.
I know there is no imminent deadline. I'm saying it doesn't seem worth the hassle.
For context, I've opened (or helped open) 4 accounts, one each for spouse/myself and our living trusts. Never run into this issue...

But people that have credit freezes, or other things that's can't be verified do run into this from time to time.

Obviously, "what's worth the effort" is entirely up to you.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by thefrozentin »

I am new to Ibonds and invested 10 large into my account in April. However, my balance still shows 10k without any interest added since April. Do I have to wait for a year to see that? TIA.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by SnowBog »

thefrozentin wrote: Sun Oct 24, 2021 5:33 pm I am new to Ibonds and invested 10 large into my account in April. However, my balance still shows 10k without any interest added since April. Do I have to wait for a year to see that? TIA.
You may need to click in a level deeper. If I recall the initial view did not show the extra interest.

But when you click in to the next level of details, you should be able to see the interest.

Note, for bonds < 5 years old, you won't see the last 3 months of interest. But you should see the prior months by now.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by colddeadfish »

SnowBog wrote: Sun Oct 24, 2021 5:42 pm
thefrozentin wrote: Sun Oct 24, 2021 5:33 pm I am new to Ibonds and invested 10 large into my account in April. However, my balance still shows 10k without any interest added since April. Do I have to wait for a year to see that? TIA.
You may need to click in a level deeper. If I recall the initial view did not show the extra interest.

But when you click in to the next level of details, you should be able to see the interest.

Note, for bonds < 5 years old, you won't see the last 3 months of interest. But you should see the prior months by now.
+1 I bought 10k in may. Interest should be $60.00
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Mel Lindauer »

Startled Cat wrote: Sun Oct 24, 2021 4:11 pm I've always held the opinion that I Bonds aren't worth bothering with. Even if the rates suddenly became attractive, the purchase limits are too low to make them very interesting. And I've heard terrible, terrible things about TreasuryDirect.
Don't mean to single you out because I hear you and others state that since the purchase limits are too low to make them very interesting, they're not worth bothering with.

At $10,000 per SS# per year, they're actually much higher than the Traditional IRA contribution limit of either $6,000 or $7,000 (depending on age) and yet I never hear folks complain that those contribution limits are too low to bother with.

Can you (or anyone else) please explain this paradox? I just don't know what I'm missing, but am open to learning why this happens so often.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Ricchan »

SnowBog wrote: Sun Oct 24, 2021 5:42 pm
thefrozentin wrote: Sun Oct 24, 2021 5:33 pm I am new to Ibonds and invested 10 large into my account in April. However, my balance still shows 10k without any interest added since April. Do I have to wait for a year to see that? TIA.
You may need to click in a level deeper. If I recall the initial view did not show the extra interest.

But when you click in to the next level of details, you should be able to see the interest.

Note, for bonds < 5 years old, you won't see the last 3 months of interest. But you should see the prior months by now.
At the bottom of the Current Holdings page, I see this:

Image

I purchased these in May of this year. Assuming the $60 is 2 months of interest with the other 3 months not being shown, that's a 3.6% rate. Close enough to the advertised 3.54% advertised rate.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by colddeadfish »

Mel Lindauer wrote: Sun Oct 24, 2021 5:51 pm
Startled Cat wrote: Sun Oct 24, 2021 4:11 pm I've always held the opinion that I Bonds aren't worth bothering with. Even if the rates suddenly became attractive, the purchase limits are too low to make them very interesting. And I've heard terrible, terrible things about TreasuryDirect.
Don't mean to single you out because I hear you and others state that since the purchase limits are too low to make them very interesting, they're not worth bothering with.

At $10,000 per SS# per year, they're actually much higher than the Traditional IRA contribution limit of either $6,000 or $7,000 (depending on age) and yet I never hear folks complain that those contribution limits are too low to bother with.

Can you (or anyone else) please explain this paradox? I just don't know what I'm missing, but am open to learning why this happens so often.
Hi, I don't personally think the amount is too low although I will say that the market has been going up too fast for me to keep up with only i-bonds.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Ricchan »

colddeadfish wrote: Sun Oct 24, 2021 5:56 pm
Mel Lindauer wrote: Sun Oct 24, 2021 5:51 pm
Startled Cat wrote: Sun Oct 24, 2021 4:11 pm I've always held the opinion that I Bonds aren't worth bothering with. Even if the rates suddenly became attractive, the purchase limits are too low to make them very interesting. And I've heard terrible, terrible things about TreasuryDirect.
Don't mean to single you out because I hear you and others state that since the purchase limits are too low to make them very interesting, they're not worth bothering with.

At $10,000 per SS# per year, they're actually much higher than the Traditional IRA contribution limit of either $6,000 or $7,000 (depending on age) and yet I never hear folks complain that those contribution limits are too low to bother with.

Can you (or anyone else) please explain this paradox? I just don't know what I'm missing, but am open to learning why this happens so often.
Hi, I don't personally think the amount is too low although I will say that the market has been going up too fast for me to keep up with only i-bonds.
That's like saying cars are going too fast for you to keep up with a bike. They are two completely different things.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by MishkaWorries »

Mel Lindauer wrote: Sun Oct 24, 2021 5:51 pm
Startled Cat wrote: Sun Oct 24, 2021 4:11 pm I've always held the opinion that I Bonds aren't worth bothering with. Even if the rates suddenly became attractive, the purchase limits are too low to make them very interesting. And I've heard terrible, terrible things about TreasuryDirect.
Don't mean to single you out because I hear you and others state that since the purchase limits are too low to make them very interesting, they're not worth bothering with.

At $10,000 per SS# per year, they're actually much higher than the Traditional IRA contribution limit of either $6,000 or $7,000 (depending on age) and yet I never hear folks complain that those contribution limits are too low to bother with.

Can you (or anyone else) please explain this paradox? I just don't know what I'm missing, but am open to learning why this happens so often.
Im curious too. I see all these posts about backdoor Roth and having to file a special tax form every year and something about tracking pro-rata basis in the account.

That seems way more complicated to me than a limit of $10,000 per person.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by colddeadfish »

Ricchan wrote: Sun Oct 24, 2021 5:59 pm
colddeadfish wrote: Sun Oct 24, 2021 5:56 pm
Mel Lindauer wrote: Sun Oct 24, 2021 5:51 pm
Startled Cat wrote: Sun Oct 24, 2021 4:11 pm I've always held the opinion that I Bonds aren't worth bothering with. Even if the rates suddenly became attractive, the purchase limits are too low to make them very interesting. And I've heard terrible, terrible things about TreasuryDirect.
Don't mean to single you out because I hear you and others state that since the purchase limits are too low to make them very interesting, they're not worth bothering with.

At $10,000 per SS# per year, they're actually much higher than the Traditional IRA contribution limit of either $6,000 or $7,000 (depending on age) and yet I never hear folks complain that those contribution limits are too ow to bother with.

Can you (or anyone else) please explain this paradox? I just don't know what I'm missing, but am open to learning why this happens so often.
Hi, I don't personally think the amount is too low although I will say that the market has been going up too fast for me to keep up with only i-bonds.
That's like saying cars are going too fast for you to keep up with a bike. They are two completely different things.
I simply mean that because of the limit I am not able to keep the entire fixed income portion of my portfolio only in I-bonds, which is what I
would have preferred. Not that they are the same thing.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by MishkaWorries »

Ricchan wrote: Sun Oct 24, 2021 5:52 pm
SnowBog wrote: Sun Oct 24, 2021 5:42 pm
thefrozentin wrote: Sun Oct 24, 2021 5:33 pm I am new to Ibonds and invested 10 large into my account in April. However, my balance still shows 10k without any interest added since April. Do I have to wait for a year to see that? TIA.
You may need to click in a level deeper. If I recall the initial view did not show the extra interest.

But when you click in to the next level of details, you should be able to see the interest.

Note, for bonds < 5 years old, you won't see the last 3 months of interest. But you should see the prior months by now.
At the bottom of the Current Holdings page, I see this:

Image

I purchased these in May of this year. Assuming the $60 is 2 months of interest with the other 3 months not being shown, that's a 3.6% rate. Close enough to the advertised 3.54% advertised rate.
Wouldn't that be two months of interest? May, June and July don't show because of the 3 month penalty. August and September are shown and October will appear on 10/31.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by BrokerageZelda »

MishkaWorries wrote: Sun Oct 24, 2021 6:04 pm
Ricchan wrote: Sun Oct 24, 2021 5:52 pm
SnowBog wrote: Sun Oct 24, 2021 5:42 pm
thefrozentin wrote: Sun Oct 24, 2021 5:33 pm I am new to Ibonds and invested 10 large into my account in April. However, my balance still shows 10k without any interest added since April. Do I have to wait for a year to see that? TIA.
You may need to click in a level deeper. If I recall the initial view did not show the extra interest.

But when you click in to the next level of details, you should be able to see the interest.

Note, for bonds < 5 years old, you won't see the last 3 months of interest. But you should see the prior months by now.
At the bottom of the Current Holdings page, I see this:

Image

I purchased these in May of this year. Assuming the $60 is 2 months of interest with the other 3 months not being shown, that's a 3.6% rate. Close enough to the advertised 3.54% advertised rate.
Wouldn't that be two months of interest? May, June and July don't show because of the 3 month penalty. August and September are shown and October will appear on 10/31.
It is two months, that's what Ricchan said. "Assuming the $60 is two months of interest..."

The exclusion is the last three months' interest, so May and June are shown, but July, August, and September are not.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by MishkaWorries »

BrokerageZelda wrote: Sun Oct 24, 2021 6:08 pm
MishkaWorries wrote: Sun Oct 24, 2021 6:04 pm
Ricchan wrote: Sun Oct 24, 2021 5:52 pm
SnowBog wrote: Sun Oct 24, 2021 5:42 pm
thefrozentin wrote: Sun Oct 24, 2021 5:33 pm I am new to Ibonds and invested 10 large into my account in April. However, my balance still shows 10k without any interest added since April. Do I have to wait for a year to see that? TIA.
You may need to click in a level deeper. If I recall the initial view did not show the extra interest.

But when you click in to the next level of details, you should be able to see the interest.

Note, for bonds < 5 years old, you won't see the last 3 months of interest. But you should see the prior months by now.
At the bottom of the Current Holdings page, I see this:

Image

I purchased these in May of this year. Assuming the $60 is 2 months of interest with the other 3 months not being shown, that's a 3.6% rate. Close enough to the advertised 3.54% advertised rate.
Wouldn't that be two months of interest? May, June and July don't show because of the 3 month penalty. August and September are shown and October will appear on 10/31.
It is two months, that's what Ricchan said. "Assuming the $60 is two months of interest..."

The exclusion is the last three months' interest, so May and June are shown, but July, August, and September are not.
You're right. I totally misread the post.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by WS1 »

whodidntante wrote: Sun Oct 24, 2021 2:06 pm
jgalt133 wrote: Sun Oct 24, 2021 12:56 pm
whodidntante wrote: Sun Oct 24, 2021 12:42 pm It is with great anguish that I report my purchase of 20k of series I bonds. 10k for me, 10k for my business. I look forward to losing money by my marginal tax rate! :|
I briefly considered purchasing $10k with my single-member LLC, but was worried about locking up the funds in my business. My business does not need deep cash reserves. What was your rationale for using your business to purchase $10k? Just a way to get around the purchase limit?
My sole proprietorship has no need for 10k that it can't even access for 11 months, so it was done to increase my purchase limits.
Is this a real sole prop or like the one I used for business credit card bonuses?
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by anon_investor »

Startled Cat wrote: Sun Oct 24, 2021 4:18 pm
Mudpuppy wrote: Sun Oct 24, 2021 4:14 pm You have until April to buy I-Bonds at the 7% six-month rate, so I'm not sure why you think you won't have time to navigate this. If you don't want to hassle with getting the medallion signature from your bank/credit union, that's another matter entirely, and fully up to you to decide. But you do have the time.
I know there is no imminent deadline. I'm saying it doesn't seem worth the hassle.
Was your credit frozen when you tried to open your account or did you not input your state DL/ID info?
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Mel Lindauer »

colddeadfish wrote: Sun Oct 24, 2021 5:56 pm
Mel Lindauer wrote: Sun Oct 24, 2021 5:51 pm
Startled Cat wrote: Sun Oct 24, 2021 4:11 pm I've always held the opinion that I Bonds aren't worth bothering with. Even if the rates suddenly became attractive, the purchase limits are too low to make them very interesting. And I've heard terrible, terrible things about TreasuryDirect.
Don't mean to single you out because I hear you and others state that since the purchase limits are too low to make them very interesting, they're not worth bothering with.

At $10,000 per SS# per year, they're actually much higher than the Traditional IRA contribution limit of either $6,000 or $7,000 (depending on age) and yet I never hear folks complain that those contribution limits are too ow to bother with.

Can you (or anyone else) please explain this paradox? I just don't know what I'm missing, but am open to learning why this happens so often.
Hi, I don't personally think the amount is too low although I will say that the market has been going up too fast for me to keep up with only i-bonds.
For the record, I don't recommend holding I Bonds as one's only bond holding, because they're not really ideal for rebalancing. Folks need to also hold some of their bond allocation in bond funds, and those would be used for the rebalancing, as needed.

Hold the I Bond portion of your portfolio for the long haul to protect the future spending power of those dollars.
Best Regards - Mel | | Semper Fi
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by The Big Apple »

SnowBog wrote: Sun Oct 24, 2021 4:49 pm For context, I've opened (or helped open) 4 accounts, one each for spouse/myself and our living trusts. Never run into this issue...

But people that have credit freezes, or other things that's can't be verified do run into this from time to time.

Obviously, "what's worth the effort" is entirely up to you.
I am not sure credit freezes are relevant to Treasury Direct. Perhaps they are using state ID verification (D/L). I e-mailed TD recently and this was their reply:
No. We do not recommend nor require credit reports to be "unfrozen" to verify your information. The online application process is automated. TreasuryDirect attempts to verify the information you furnish with commercially-available databases. A Pass/Fail notification is returned. The process has nothing to do with your credit report or credit rating.
Both myself and spouse have opened TD accounts with our reports frozen. I was rather surprised that they didn't use credit reports for ID verification.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Startled Cat »

anon_investor wrote: Sun Oct 24, 2021 6:23 pm Was your credit frozen when you tried to open your account or did you not input your state DL/ID info?
Nope, nothing like that. I've opened dozens of bank accounts and credit cards online and generally don't have any issues.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Ricchan »

colddeadfish wrote: Sun Oct 24, 2021 6:03 pm
Ricchan wrote: Sun Oct 24, 2021 5:59 pm
colddeadfish wrote: Sun Oct 24, 2021 5:56 pm
Mel Lindauer wrote: Sun Oct 24, 2021 5:51 pm
Startled Cat wrote: Sun Oct 24, 2021 4:11 pm I've always held the opinion that I Bonds aren't worth bothering with. Even if the rates suddenly became attractive, the purchase limits are too low to make them very interesting. And I've heard terrible, terrible things about TreasuryDirect.
Don't mean to single you out because I hear you and others state that since the purchase limits are too low to make them very interesting, they're not worth bothering with.

At $10,000 per SS# per year, they're actually much higher than the Traditional IRA contribution limit of either $6,000 or $7,000 (depending on age) and yet I never hear folks complain that those contribution limits are too ow to bother with.

Can you (or anyone else) please explain this paradox? I just don't know what I'm missing, but am open to learning why this happens so often.
Hi, I don't personally think the amount is too low although I will say that the market has been going up too fast for me to keep up with only i-bonds.
That's like saying cars are going too fast for you to keep up with a bike. They are two completely different things.
I simply mean that because of the limit I am not able to keep the entire fixed income portion of my portfolio only in I-bonds, which is what I
would have preferred. Not that they are the same thing.
Ah, okay. I misunderstood. Thank you for clarifying.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by MrJedi »

Ricchan wrote: Sun Oct 24, 2021 5:52 pm
SnowBog wrote: Sun Oct 24, 2021 5:42 pm
thefrozentin wrote: Sun Oct 24, 2021 5:33 pm I am new to Ibonds and invested 10 large into my account in April. However, my balance still shows 10k without any interest added since April. Do I have to wait for a year to see that? TIA.
You may need to click in a level deeper. If I recall the initial view did not show the extra interest.

But when you click in to the next level of details, you should be able to see the interest.

Note, for bonds < 5 years old, you won't see the last 3 months of interest. But you should see the prior months by now.
At the bottom of the Current Holdings page, I see this:

Image

I purchased these in May of this year. Assuming the $60 is 2 months of interest with the other 3 months not being shown, that's a 3.6% rate. Close enough to the advertised 3.54% advertised rate.
The interest calculation is kind of wacky because interest is all based off of the interest of a $25 bond, then rounded to the nearest penny, and then extrapolated to the full bond amount.

$25 bond for 2 months of 3.54% rate

25 x (1+ 0.0354/2)^(2/6) = 25.15 (rounded to penny)

$10,000 = 400 multiples of the $25 bond.

$25.15 x 400 = $10,060
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by billthecat »

SnowBog wrote: Sun Oct 24, 2021 5:42 pm
thefrozentin wrote: Sun Oct 24, 2021 5:33 pm I am new to Ibonds and invested 10 large into my account in April. However, my balance still shows 10k without any interest added since April. Do I have to wait for a year to see that? TIA.
You may need to click in a level deeper. If I recall the initial view did not show the extra interest.

But when you click in to the next level of details, you should be able to see the interest.

Note, for bonds < 5 years old, you won't see the last 3 months of interest. But you should see the prior months by now.
When you reach 5 years does the last three months suddenly get added to your balance?
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