I Bonds Mega Thread (I Bond Heads Rejoice!)

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

Post by theac »

dcabler wrote: Sat Mar 18, 2023 7:43 pm
Mel Lindauer wrote: Sat Mar 18, 2023 2:02 pm
coachd50 wrote: Sat Mar 18, 2023 8:31 am
nps wrote: Sat Mar 18, 2023 5:46 am
Mel Lindauer wrote: Fri Mar 17, 2023 8:33 pm That's simply a risk I'm not willing to take since I already have more than my fair share of high fixed rate I Bonds.
That's great that you have no need to buy I bonds going forward! You have clearly done well and amassed what you need in paper bonds.

However the people that are trying to evaluate the risk of buying electronic bonds now are not similarly situated. It is not possible for them to buy large amounts of paper bonds. This is a thread about buying I bonds, perhaps there should be a separate one to reminisce about the good old days of I bonds when the fixed rates were high, you could buy $30k worth on your credit card, and those large amounts would be delivered to you in paper form. None of those things apply today.

As for the risk, "you've been warned" therefore "you can't go crying to TD" is simply not an accurate description of one's options in remediating an account breach. Using it as an argument to prefer paper bonds is also not relevant to most people deciding whether to buy bonds today. Once again, the ability to decide between paper and electronic has long since passed for anything but minimal amounts.
I agree wholeheartedly. I think some posters, particularly newer or lesser experienced have been done a disservice the last few months when asking questions and looking for opinions and strategies about purchasing Series I Savings Bonds in 2023- with low fixed rates and a seemingly cooling inflationary environment by posts conflating the issue talking about the benefits of 3% fixed bonds bought 25 years ago that also yielded credit card bonuses.

I think those looking for info, opinions, and strategies ( myself included) would be so much better served if the knowledge and wisdom of those well versed in I bonds would focus on the current situation and give opinions on that even if they aren't personally themselves in the same situation.

I absolutely think that concerns over TD would be important to factor into the current situation, and I appreciate Mel's candor on that topic.
Several points:
1. I was a lone voice in the wilderness in support of I Bonds when they first came out. I still am a proponent of them, as my posts have proven over the years.
2. However, having said that, I personally am not a fan of TD for a number of reasons, but I don't try to discourage those who find the website and TD functional.
3. I just want those who use TD to be aware of the risk (granted very low) associated with TD when it comes to having their account cleaned out by a hacker since I never see that discussed.
4. I wonder why, when folks get paper I Bonds from their tax returns, many (most) seem to feel the need to immediately send them off to TD to be added to their electronic bonds. I think that holding on to those paper I Bonds offers a lot of security and flexibility for when money is needed immediately in an emergency and TD is down for maintenance or other reasons, or they are locked out for some silly reason, such as hitting the backspace key.

In the end, I simply present my opinions and let folks decide for themselves. I'm not on a mission against TD; I just personally don't feel comfortable with it for both me and my heirs.

To each his/her own. Whatever works for you.
For #4, I see that as primarily an advantage for somebody who uses I-bonds as part of their emergency fund. I could easily see having a few of the $5K bonds which were purchased via a tax refund in paper form if that's why I held I-bonds.

Currently I own duration matched TIPS to provide me inflation adjusted income till the end of my 89th year and I have I bonds for the rest of the way for that part of my portfolio. Here, simplicity rules.

I only wish I were a BH'er back when you were the lone voice crying in the wilderness!!!!

Cheers.
Me too!
I learned of I-Bonds a bit late, like 2005, while listening to a financial radio talk show. So I looked into them and immediately tested the waters with a $5,000 buy.

That went well so continued on. Just wish I would have known about them back when the limit was higher (I believe it was $30k annual?) and you could buy them with a cash-back credit card to even get an extra bonus!

But still glad I heard of them at all, even if it was a little late. :D

P.S. Come to think of it, it was also thru a financial radio talk show that I discovered Bogleheads in 2008! :beer
"We keep you alive to serve this ship. Row well...and live." Ben Hur...and The Taxman! hahaha (a George Harrison song)
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sperry8
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by sperry8 »

kalarama wrote: Wed Mar 15, 2023 1:37 pm I did a break-even calculation with buying I-bond before May 1 with current 0.4% fixed rate and 6.89% for first six months versus buying in May with a new fixed rate and new variable rate. Subsequent variable rates would be the same between the two scenarios just one month apart. For the new fixed rates below, the table below shows approx how long until May purchase would be better than April purchase. For me, that's way too long to break-even and I'll be buying before May 1st.

If next month's CPI comes in at 5%, then the new variable rate would be ~3.4%. If buying before May 1st, then you would get 6.89% for 6 months and ~3.8% for 6 months, averaging to ~5.35% for 12-months. That works for me. I just haven't decided if I'll buy end of March or end of April once we know exactly what the new variable rate will be.

0.60% 8.8 yrs
0.70% 5.8 yrs
0.80% 4.3 yrs
0.90% 3.3 yrs
1.00% 2.6 yrs
Thanks, assuming you're in the ballpark, this is very helpful. Still, may as well wait until late April to be sure, correct? No real gain buying 3-4 weeks in advance...
BH Contests: 23 #89 of 607 | 22 #512 of 674 | 21 #66 of 636 |20 #253/664 |19 #233/645 |18 #150/493 |17 #516/647 |16 #121/610 |15 #18/552 |14 #225/503 |13 #383/433 |12 #366/410 |11 #113/369 |10 #53/282
Tom_T
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Tom_T »

kalarama wrote: Wed Mar 15, 2023 1:37 pm I did a break-even calculation with buying I-bond before May 1 with current 0.4% fixed rate and 6.89% for first six months versus buying in May with a new fixed rate and new variable rate. Subsequent variable rates would be the same between the two scenarios just one month apart. For the new fixed rates below, the table below shows approx how long until May purchase would be better than April purchase. For me, that's way too long to break-even and I'll be buying before May 1st.

If next month's CPI comes in at 5%, then the new variable rate would be ~3.4%. If buying before May 1st, then you would get 6.89% for 6 months and ~3.8% for 6 months, averaging to ~5.35% for 12-months. That works for me. I just haven't decided if I'll buy end of March or end of April once we know exactly what the new variable rate will be.

0.60% 8.8 yrs
0.70% 5.8 yrs
0.80% 4.3 yrs
0.90% 3.3 yrs
1.00% 2.6 yrs

It's also very possible that the fixed rate won't change at all. If the variable rate is likely going to drop because inflation has slowed, why would the fixed rate go up? Even the real yield on TIPS is lower than it was a few months back. I don't see the justification for paying a higher fixed rate. I personally think the new combined rate will be only 4%. Oh, well, in another 5.5 weeks we will know the answer.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by PA_Boglehead »

FYI..
  • Federal return accepted March 6th
  • Excess federal refund direct deposit received March 20th
  • $5,000 paper I-Bond received March 25th
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Mel Lindauer »

PA_Boglehead wrote: Sat Mar 25, 2023 5:59 pm FYI..
  • Federal return accepted March 6th
  • Excess federal refund direct deposit received March 20th
  • $5,000 paper I-Bond received March 25th
They've really improved their service over the horror stories we heard here previously. Kudos for that.
Best Regards - Mel | | Semper Fi
PA_Boglehead
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by PA_Boglehead »

Mel Lindauer wrote: Sat Mar 25, 2023 11:04 pm
PA_Boglehead wrote: Sat Mar 25, 2023 5:59 pm FYI..
  • Federal return accepted March 6th
  • Excess federal refund direct deposit received March 20th
  • $5,000 paper I-Bond received March 25th
They've really improved their service over the horror stories we heard here previously. Kudos for that.
The downside is still dealing with TreasuryDirect. I was in the midst of converting my paper bond to 'electronic' on the website last evening. I was 99% complete, and just before passing the finish line I had to overcome a final obstacle and provide an answer to a security question. Of course I failed in comic fashion and I am now locked out of my account, pending a phone call to TreasuryDirect on Monday. I am dreading the hold times.
cshell2
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by cshell2 »

PA_Boglehead wrote: Sun Mar 26, 2023 8:40 am
Mel Lindauer wrote: Sat Mar 25, 2023 11:04 pm
PA_Boglehead wrote: Sat Mar 25, 2023 5:59 pm FYI..
  • Federal return accepted March 6th
  • Excess federal refund direct deposit received March 20th
  • $5,000 paper I-Bond received March 25th
They've really improved their service over the horror stories we heard here previously. Kudos for that.
The downside is still dealing with TreasuryDirect. I was in the midst of converting my paper bond to 'electronic' on the website last evening. I was 99% complete, and just before passing the finish line I had to overcome a final obstacle and provide an answer to a security question. Of course I failed in comic fashion and I am now locked out of my account, pending a phone call to TreasuryDirect on Monday. I am dreading the hold times.
You don't have to convert them though. I don't see any point to sending them back in. I can easily cash them in same day at my bank if needed.
malabargold
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by malabargold »

The real downside is buying too much safety and losing out on much better returns in stocks,

A good store for emergency funds, perhaps a year's expenses, but more than that is a riff on value trap
dan7800
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by dan7800 »

malabargold wrote: Sun Mar 26, 2023 10:26 am The real downside is buying too much safety and losing out on much better returns in stocks,

A good store for emergency funds, perhaps a year's expenses, but more than that is a riff on value trap
I somewhat disagree. I am 40 and I am buying 20K in Ibonds. I am creating a DIY albeit very small, pension-like fund.
MKP
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by MKP »

malabargold wrote: Sun Mar 26, 2023 10:26 am The real downside is buying too much safety and losing out on much better returns in stocks,

A good store for emergency funds, perhaps a year's expenses, but more than that is a riff on value trap
I kind of agree with this. I have put a large chunk of change into fixed income in the last year. I am pivoting back to building my stock portfolio after my (kids) ibond purchase goes in April.
ustaad9
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by ustaad9 »

MKP wrote: Sun Mar 26, 2023 11:13 am
malabargold wrote: Sun Mar 26, 2023 10:26 am The real downside is buying too much safety and losing out on much better returns in stocks,

A good store for emergency funds, perhaps a year's expenses, but more than that is a riff on value trap
I kind of agree with this. I have put a large chunk of change into fixed income in the last year. I am pivoting back to building my stock portfolio after my (kids) ibond purchase goes in April.
Would very much like to know your view on investing in stocks after the 1st Qtr earnings come out.
H-Town
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by H-Town »

ustaad9 wrote: Sun Mar 26, 2023 11:39 am
MKP wrote: Sun Mar 26, 2023 11:13 am
malabargold wrote: Sun Mar 26, 2023 10:26 am The real downside is buying too much safety and losing out on much better returns in stocks,

A good store for emergency funds, perhaps a year's expenses, but more than that is a riff on value trap
I kind of agree with this. I have put a large chunk of change into fixed income in the last year. I am pivoting back to building my stock portfolio after my (kids) ibond purchase goes in April.
Would very much like to know your view on investing in stocks after the 1st Qtr earnings come out.
Does it matter? We've been throwing money at stock index funds for the past decade. Now our portfolio acts like a money printing machine for us. Even if the market drops in half tomorrow, we're still in the black.
Time is the ultimate currency.
fujiters
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by fujiters »

ustaad9 wrote: Sun Mar 26, 2023 11:39 am
MKP wrote: Sun Mar 26, 2023 11:13 am
malabargold wrote: Sun Mar 26, 2023 10:26 am The real downside is buying too much safety and losing out on much better returns in stocks,

A good store for emergency funds, perhaps a year's expenses, but more than that is a riff on value trap
I kind of agree with this. I have put a large chunk of change into fixed income in the last year. I am pivoting back to building my stock portfolio after my (kids) ibond purchase goes in April.
Would very much like to know your view on investing in stocks after the 1st Qtr earnings come out.
Most people aren't advocating for I bonds instead of stock. Assuming you want to hold fixed income investments, the question is I bonds instead of cash/bonds/CDs/etc.

It's reasonable for even very young investors to have some fixed income investments. Vanguard's 2065 target date fund currently holds a little over 9% in bonds, for example.
“The purpose of the margin of safety is to render the forecast unnecessary.” -Benjamin Graham
monkeydluffy
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by monkeydluffy »

ustaad9 wrote: Sun Mar 26, 2023 11:39 am Would very much like to know your view on investing in stocks after the 1st Qtr earnings come out.
Deep down, I pray for bad Q1 earnings. Makes buying VTI and VXUS cheaper. The trick is to mentally and emotionally dissociate yourself from your retirement account. Losses only become realized when you actually sell, which I don't expect to do for about 20 more years or so. This is also why I only rebalance between US stocks and international stocks with new contributions (my current retirement portfolio consists of 100% stocks; the recent foray into I bonds and T-bills is more for my emergency fund). Never sell what you bought in the past!

Going back to I bonds: I agree with malabargold's sentiment. I view I Bonds as occupying this weird spot between an "investment" and a mid-term emergency fund. It's great that it's indexed to inflation for the "in case of emergency, break glass" situation. I also like how taxes on the interest can be deferred until redemption or maturity, so it's another tax-advantaged space I would like to max out.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by QuiGonJohn »

monkeydluffy wrote: Sun Mar 26, 2023 12:31 pm The trick is to mentally and emotionally dissociate yourself from your retirement account. Losses only become realized when you actually sell, which I don't expect to do for about 20 more years or so.
Bingo. That is the key. When the market has been getting hammered the last two years, I see so many people saying "I lost all this money". But if/when the market recovers, if you haven't sold your shares (be they stocks, mutual funds or ETF's), you're gonna get all that back and then some. So unless our economy gets totally decimated and stays that way permanently, we should be in good shape. Like you, I am looking for lower prices on the ETF I've been buying into right now, so I can get more shares for less money.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Mel Lindauer »

PA_Boglehead wrote: Sun Mar 26, 2023 8:40 am
Mel Lindauer wrote: Sat Mar 25, 2023 11:04 pm
PA_Boglehead wrote: Sat Mar 25, 2023 5:59 pm FYI..
  • Federal return accepted March 6th
  • Excess federal refund direct deposit received March 20th
  • $5,000 paper I-Bond received March 25th
They've really improved their service over the horror stories we heard here previously. Kudos for that.
The downside is still dealing with TreasuryDirect. I was in the midst of converting my paper bond to 'electronic' on the website last evening. I was 99% complete, and just before passing the finish line I had to overcome a final obstacle and provide an answer to a security question. Of course I failed in comic fashion and I am now locked out of my account, pending a phone call to TreasuryDirect on Monday. I am dreading the hold times.
That's another reason to hang on to at least some (if not all) of your paper I Bonds rather than converting them to electronic ones.
Best Regards - Mel | | Semper Fi
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Mel Lindauer »

cshell2 wrote: Sun Mar 26, 2023 10:21 am
PA_Boglehead wrote: Sun Mar 26, 2023 8:40 am
Mel Lindauer wrote: Sat Mar 25, 2023 11:04 pm
PA_Boglehead wrote: Sat Mar 25, 2023 5:59 pm FYI..
  • Federal return accepted March 6th
  • Excess federal refund direct deposit received March 20th
  • $5,000 paper I-Bond received March 25th
They've really improved their service over the horror stories we heard here previously. Kudos for that.
The downside is still dealing with TreasuryDirect. I was in the midst of converting my paper bond to 'electronic' on the website last evening. I was 99% complete, and just before passing the finish line I had to overcome a final obstacle and provide an answer to a security question. Of course I failed in comic fashion and I am now locked out of my account, pending a phone call to TreasuryDirect on Monday. I am dreading the hold times.
You don't have to convert them though. I don't see any point to sending them back in. I can easily cash them in same day at my bank if needed.
Bingo!
Best Regards - Mel | | Semper Fi
coachd50
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by coachd50 »

dan7800 wrote: Sun Mar 26, 2023 10:28 am
malabargold wrote: Sun Mar 26, 2023 10:26 am The real downside is buying too much safety and losing out on much better returns in stocks,

A good store for emergency funds, perhaps a year's expenses, but more than that is a riff on value trap
I somewhat disagree. I am 40 and I am buying 20K in Ibonds. I am creating a DIY albeit very small, pension-like fund.
If Series I bonds didn't exist, what would you be doing with that $20,000? Because remember your very small "pension-like fund" will be returning less than .5%

It really is just an inflation protected savings instrument. I find it hard to believe that bonds purchased at the zero or near zero rates would generate enough income to be viewed as "pension like". A quarter million in I bonds @.4 %mfixed will be yielding a a real $1,000. Those purchased with the zero percent fixed will yield less.

That doesn't make it bad. Just not something I would associate with a pension, which generally is going to generate more than you put in.
abc132
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by abc132 »

I-Bonds in taxable and long term nominal bonds in Roth for the win in early retirement.

I will sell whichever one has a better price without worrying about what interest rates do in the short to medium term.

I-Bonds are up 15-20% on intermediate bond funds since Jan 2022 even if that is 0% real.

It doesn't take much effort to see how they can add value.
coachd50
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by coachd50 »

abc132 wrote: Sun Mar 26, 2023 7:57 pm I-Bonds in taxable and long term nominal bonds in Roth for the win in early retirement.

I will sell whichever one has a better price without worrying about what interest rates do in the short to medium term.

I-Bonds are up 15-20% on intermediate bond funds since Jan 2022 even if that is 0% real.

It doesn't take much effort to see how they can add value.
Sure, if you pick a time frame with high inflation and rising interest rates....
If you purchase a bunch of 0% or near 0% fixed I bonds NOW...and the next 15 years are similar to the last 15 with low inflation and falling interest rates?
They add value by being a store of value.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by metalworking »

cshell2 wrote: Sun Mar 26, 2023 10:21 am
PA_Boglehead wrote: Sun Mar 26, 2023 8:40 am
Mel Lindauer wrote: Sat Mar 25, 2023 11:04 pm
PA_Boglehead wrote: Sat Mar 25, 2023 5:59 pm FYI..
  • Federal return accepted March 6th
  • Excess federal refund direct deposit received March 20th
  • $5,000 paper I-Bond received March 25th
They've really improved their service over the horror stories we heard here previously. Kudos for that.
The downside is still dealing with TreasuryDirect. I was in the midst of converting my paper bond to 'electronic' on the website last evening. I was 99% complete, and just before passing the finish line I had to overcome a final obstacle and provide an answer to a security question. Of course I failed in comic fashion and I am now locked out of my account, pending a phone call to TreasuryDirect on Monday. I am dreading the hold times.
You don't have to convert them though. I don't see any point to sending them back in. I can easily cash them in same day at my bank if needed.
Better check on that. My fathers long time bank refused to cash his. He had to send them to the treasury in Minnesota. It was very stressful for him to put those bonds in the mail. Probably be a couple weeks before he gets the money.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by CletusCaddy »

metalworking wrote: Sun Mar 26, 2023 8:49 pm
cshell2 wrote: Sun Mar 26, 2023 10:21 am
PA_Boglehead wrote: Sun Mar 26, 2023 8:40 am
Mel Lindauer wrote: Sat Mar 25, 2023 11:04 pm
PA_Boglehead wrote: Sat Mar 25, 2023 5:59 pm FYI..
  • Federal return accepted March 6th
  • Excess federal refund direct deposit received March 20th
  • $5,000 paper I-Bond received March 25th
They've really improved their service over the horror stories we heard here previously. Kudos for that.
The downside is still dealing with TreasuryDirect. I was in the midst of converting my paper bond to 'electronic' on the website last evening. I was 99% complete, and just before passing the finish line I had to overcome a final obstacle and provide an answer to a security question. Of course I failed in comic fashion and I am now locked out of my account, pending a phone call to TreasuryDirect on Monday. I am dreading the hold times.
You don't have to convert them though. I don't see any point to sending them back in. I can easily cash them in same day at my bank if needed.
Better check on that. My fathers long time bank refused to cash his. He had to send them to the treasury in Minnesota. It was very stressful for him to put those bonds in the mail. Probably be a couple weeks before he gets the money.
So much for paper I bonds being superior. What is the point of them again?
cshell2
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by cshell2 »

metalworking wrote: Sun Mar 26, 2023 8:49 pm
cshell2 wrote: Sun Mar 26, 2023 10:21 am
PA_Boglehead wrote: Sun Mar 26, 2023 8:40 am
Mel Lindauer wrote: Sat Mar 25, 2023 11:04 pm
PA_Boglehead wrote: Sat Mar 25, 2023 5:59 pm FYI..
  • Federal return accepted March 6th
  • Excess federal refund direct deposit received March 20th
  • $5,000 paper I-Bond received March 25th
They've really improved their service over the horror stories we heard here previously. Kudos for that.
The downside is still dealing with TreasuryDirect. I was in the midst of converting my paper bond to 'electronic' on the website last evening. I was 99% complete, and just before passing the finish line I had to overcome a final obstacle and provide an answer to a security question. Of course I failed in comic fashion and I am now locked out of my account, pending a phone call to TreasuryDirect on Monday. I am dreading the hold times.
You don't have to convert them though. I don't see any point to sending them back in. I can easily cash them in same day at my bank if needed.
Better check on that. My fathers long time bank refused to cash his. He had to send them to the treasury in Minnesota. It was very stressful for him to put those bonds in the mail. Probably be a couple weeks before he gets the money.
I've never had a problem cashing bonds (EE or I) at either Wells Fargo or my local credit union.
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HueyLD
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by HueyLD »

There are fewer and fewer financial institutions that will cash savings bonds nowadays. It is definitely YMMV.

At least in my part of the country, cashing paper savings bonds can be a real challenge. Even though I like the joint ownership feature of paper bonds, I don’t like having no easy way to cash them in my area. As a result, I no longer own any paper bonds and have no desire to do the annual $5k purchase via tax refund.
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Mel Lindauer
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Mel Lindauer »

cshell2 wrote: Sun Mar 26, 2023 8:57 pm
metalworking wrote: Sun Mar 26, 2023 8:49 pm
cshell2 wrote: Sun Mar 26, 2023 10:21 am
PA_Boglehead wrote: Sun Mar 26, 2023 8:40 am
Mel Lindauer wrote: Sat Mar 25, 2023 11:04 pm

They've really improved their service over the horror stories we heard here previously. Kudos for that.
The downside is still dealing with TreasuryDirect. I was in the midst of converting my paper bond to 'electronic' on the website last evening. I was 99% complete, and just before passing the finish line I had to overcome a final obstacle and provide an answer to a security question. Of course I failed in comic fashion and I am now locked out of my account, pending a phone call to TreasuryDirect on Monday. I am dreading the hold times.
You don't have to convert them though. I don't see any point to sending them back in. I can easily cash them in same day at my bank if needed.
Better check on that. My fathers long time bank refused to cash his. He had to send them to the treasury in Minnesota. It was very stressful for him to put those bonds in the mail. Probably be a couple weeks before he gets the money.
I've never had a problem cashing bonds (EE or I) at either Wells Fargo or my local credit union.
That's been my experience, too. I have several local banks that will redeem them with no problem.
Best Regards - Mel | | Semper Fi
coachd50
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by coachd50 »

Seems like quite the conundrum. We have posters saying that they never have issues with TD (until they do) and some who hate the experience. Then we have posters who can't cash paper bonds and some who can as easily as cashing a check (until their bank stops that service).
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by placeholder »

coachd50 wrote: Sun Mar 26, 2023 10:27 pm Seems like quite the conundrum. We have posters saying that they never have issues with TD (until they do) and some who hate the experience. Then we have posters who can't cash paper bonds and some who can as easily as cashing a check (until their bank stops that service).
But there's no reason you have to do it right away so if in the future you can't find a bank that will cash it then you can use treasury direct.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by coachd50 »

placeholder wrote: Mon Mar 27, 2023 12:26 am
coachd50 wrote: Sun Mar 26, 2023 10:27 pm Seems like quite the conundrum. We have posters saying that they never have issues with TD (until they do) and some who hate the experience. Then we have posters who can't cash paper bonds and some who can as easily as cashing a check (until their bank stops that service).
But there's no reason you have to do it right away so if in the future you can't find a bank that will cash it then you can use treasury direct.
Yes- but isn’t one of the most common reasons cited by paper bond holders the immediate liquidity? That disappears when you walk into your branch and surprisingly rejected doesn’t it?

What is the anticipated turnaround time for converting paper bonds into cash via treasury direct?
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theac
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by theac »

coachd50 wrote: Mon Mar 27, 2023 6:39 am
placeholder wrote: Mon Mar 27, 2023 12:26 am
coachd50 wrote: Sun Mar 26, 2023 10:27 pm Seems like quite the conundrum. We have posters saying that they never have issues with TD (until they do) and some who hate the experience. Then we have posters who can't cash paper bonds and some who can as easily as cashing a check (until their bank stops that service).
But there's no reason you have to do it right away so if in the future you can't find a bank that will cash it then you can use treasury direct.
Yes- but isn’t one of the most common reasons cited by paper bond holders the immediate liquidity? That disappears when you walk into your branch and surprisingly rejected doesn’t it?

What is the anticipated turnaround time for converting paper bonds into cash via treasury direct?
Why, how many bonds are you trying to change?
"We keep you alive to serve this ship. Row well...and live." Ben Hur...and The Taxman! hahaha (a George Harrison song)
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by abc132 »

coachd50 wrote: Sun Mar 26, 2023 8:08 pm
abc132 wrote: Sun Mar 26, 2023 7:57 pm I-Bonds in taxable and long term nominal bonds in Roth for the win in early retirement.

I will sell whichever one has a better price without worrying about what interest rates do in the short to medium term.

I-Bonds are up 15-20% on intermediate bond funds since Jan 2022 even if that is 0% real.

It doesn't take much effort to see how they can add value.
Sure, if you pick a time frame with high inflation and rising interest rates....
If you purchase a bunch of 0% or near 0% fixed I bonds NOW...and the next 15 years are similar to the last 15 with low inflation and falling interest rates?
They add value by being a store of value.
I would expect nominal long bonds to earn a great rate in that scenario and I would spend from them while reinvesting existing I-bonds if the fixed rate ever increases. The mix of I-bonds + long nominal bonds should do better in the scenario of low inflation and falling interest rates. The key is both are in tax advantaged accounts.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by coachd50 »

theac wrote: Mon Mar 27, 2023 6:56 am
coachd50 wrote: Mon Mar 27, 2023 6:39 am
placeholder wrote: Mon Mar 27, 2023 12:26 am
coachd50 wrote: Sun Mar 26, 2023 10:27 pm Seems like quite the conundrum. We have posters saying that they never have issues with TD (until they do) and some who hate the experience. Then we have posters who can't cash paper bonds and some who can as easily as cashing a check (until their bank stops that service).
But there's no reason you have to do it right away so if in the future you can't find a bank that will cash it then you can use treasury direct.
Yes- but isn’t one of the most common reasons cited by paper bond holders the immediate liquidity? That disappears when you walk into your branch and surprisingly rejected doesn’t it?

What is the anticipated turnaround time for converting paper bonds into cash via treasury direct?
Why, how many bonds are you trying to change?
Personally, none at the moment. I just think that is a valuable piece of information with regards to the "keep them paper" or "convert them as soon as you get them" debate.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by SnowBog »

coachd50 wrote: Mon Mar 27, 2023 6:26 pm
theac wrote: Mon Mar 27, 2023 6:56 am
coachd50 wrote: Mon Mar 27, 2023 6:39 am
placeholder wrote: Mon Mar 27, 2023 12:26 am
coachd50 wrote: Sun Mar 26, 2023 10:27 pm Seems like quite the conundrum. We have posters saying that they never have issues with TD (until they do) and some who hate the experience. Then we have posters who can't cash paper bonds and some who can as easily as cashing a check (until their bank stops that service).
But there's no reason you have to do it right away so if in the future you can't find a bank that will cash it then you can use treasury direct.
Yes- but isn’t one of the most common reasons cited by paper bond holders the immediate liquidity? That disappears when you walk into your branch and surprisingly rejected doesn’t it?

What is the anticipated turnaround time for converting paper bonds into cash via treasury direct?
Why, how many bonds are you trying to change?
Personally, none at the moment. I just think that is a valuable piece of information with regards to the "keep them paper" or "convert them as soon as you get them" debate.
There's a separate thread for that: viewtopic.php?t=97443
malabargold
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by malabargold »

ustaad9 wrote: Sun Mar 26, 2023 11:39 am
MKP wrote: Sun Mar 26, 2023 11:13 am
malabargold wrote: Sun Mar 26, 2023 10:26 am The real downside is buying too much safety and losing out on much better returns in stocks,

A good store for emergency funds, perhaps a year's expenses, but more than that is a riff on value trap
I kind of agree with this. I have put a large chunk of change into fixed income in the last year. I am pivoting back to building my stock portfolio after my (kids) ibond purchase goes in April.
Would very much like to know your view on investing in stocks after the 1st Qtr earnings come out.


I've been essentially 100% stocks since the mid-1960''s
and my opinion will not change
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by sperry8 »

malabargold wrote: Mon Mar 27, 2023 6:54 pm
ustaad9 wrote: Sun Mar 26, 2023 11:39 am
MKP wrote: Sun Mar 26, 2023 11:13 am
malabargold wrote: Sun Mar 26, 2023 10:26 am The real downside is buying too much safety and losing out on much better returns in stocks,

A good store for emergency funds, perhaps a year's expenses, but more than that is a riff on value trap
I kind of agree with this. I have put a large chunk of change into fixed income in the last year. I am pivoting back to building my stock portfolio after my (kids) ibond purchase goes in April.
Would very much like to know your view on investing in stocks after the 1st Qtr earnings come out.


I've been essentially 100% stocks since the mid-1960''s
and my opinion will not change
You must be quite the high net worth individual these days then. Kudos.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by erp »

sperry8 wrote: Tue Mar 28, 2023 9:50 am
malabargold wrote: Mon Mar 27, 2023 6:54 pm I've been essentially 100% stocks since the mid-1960''s
and my opinion will not change
You must be quite the high net worth individual these days then. Kudos.
post did not say which stocks though :wink:
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Tom_T »

Great post on Tipswatch today: "Want to exit your I Bond investment? You’d better have a plan."

https://tipswatch.com/2023/03/29/want-t ... ve-a-plan/
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Silk McCue »

Tom_T wrote: Wed Mar 29, 2023 7:42 am Great post on Tipswatch today: "Want to exit your I Bond investment? You’d better have a plan."

https://tipswatch.com/2023/03/29/want-t ... ve-a-plan/
Thanks for sharing. Very useful for us.

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

Post by MrJedi »

Very nice writeup. I had already kinda mapped this out myself, but it's nice to see everything laid out like that. I plan to refer back that post later this year when I make some decisions. As mentioned in that post, I did not originally intend to hold I Bonds for the long term, only for short term rate chasing.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by greenspam »

Just a quick note; a month after 9/11 had occurred (oct 2001), seeking a 'safe' investment, and taking advice on this forum from the i-bond crew (ML, TL?), I invested $27K in i-bonds...

current value: $85.7K WOW !!!
current interest rate: 12.76%

pretty darn good investment,

except i suppose the actual value of the $85.7K is gonna be reduced by about 15-25% by federal taxes (state too???), depending on if/when I cash them...

Any suggestions on how to reduce tax burden on these? my present strategy is to hold as long as possible and cash in during a year when I'm retired and earning much less than now.

thanks all
as always, | peace, | greenie.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by ehh »

greenspam wrote: Wed Mar 29, 2023 9:20 am except i suppose the actual value of the $85.7K is gonna be reduced by about 15-25% by federal taxes (state too???), depending on if/when I cash them...
No state income tax on I Bond interest. I think this is true in every state.

Depending on your expected tax situation as you approach 2031, all I can suggest is perhaps start cashing your I bonds a year or two early. Spreading the tax over two or three years.

For what it is worth, I purchased I Bonds from 2001 -2007. And will also face the tax question starting in 2031. Too far in the future for me to start planning.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by exodusNH »

Mel Lindauer wrote: Fri Mar 17, 2023 8:33 pm
dcabler wrote: Fri Mar 17, 2023 7:10 pm
Mel Lindauer wrote: Fri Mar 17, 2023 2:52 pm ^^^ While it's probably highly unlikely, that really doesn't matter at all if you happen to be the first and become the poster boy for how it was done. You can't go crying to TD, since you were warned.
Somebody's always going to be the first at something. I might get in a car accident. You as well. (heaven forbid on both counts) but I can think a lot of risks I'm taking elsewhere with higher probability than this with significantly more impact. Wouldn't surprise me a bit if this might be the case for you as well. As for me, I'll continue to not lose sleep over this.

Cheers (really, cheers!) :D
Let's hope that neither you nor anyone else has to be the first. That's simply a risk I'm not willing to take since I already have more than my fair share of high fixed rate I Bonds.
Unfortunately, it's a risk one can't avoid if one needs to accumulate I Bonds.

In terms of sending new paper bonds to be converted, well, it a matter of balancing risks. Keeping paper bonds might have some advantages, but now you've increased the number of ways you can have problems. (A related example would be requiring company executives to fly on separate flights. While you've reduced the maximum damage, you've multiplied your chances of having an incident as the events are usually uncorrelated.)

Not to mention the scattershot response to paper bond refunds.

I also strongly suspect that, being a US Government website, it is MUCH less likely to be attacked by scammers. As a division of the US Treasury, you REALLY don't want to be on the other side of an investigation. (It's like the jokers who rob banks. Don't do that. Why tussle with the FBI? Knock over a convenience store so that you're only dealing with local police.)
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by legalwriter1 »

greenspam wrote: Wed Mar 29, 2023 9:20 am Just a quick note; a month after 9/11 had occurred (oct 2001), seeking a 'safe' investment, and taking advice on this forum from the i-bond crew (ML, TL?), I invested $27K in i-bonds...

current value: $85.7K WOW !!!
current interest rate: 12.76%

pretty darn good investment,

except i suppose the actual value of the $85.7K is gonna be reduced by about 15-25% by federal taxes (state too???), depending on if/when I cash them...

Any suggestions on how to reduce tax burden on these? my present strategy is to hold as long as possible and cash in during a year when I'm retired and earning much less than now.

thanks all
By comparison, if you invested $27k in the S&P 500 in Oct 2001 and reinvested all dividends, you would have around $139k in October 2022 (8.1% annual return not adjusted for inflation or 5.5% annual return adjusted for inflation). I still love my I-bonds, but it's still good to be in the market and diversify.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by HerrRogan »

Very quick turnaround this year.

Federal return accepted March 15th
Excess federal refund direct deposit received March 20th
$5,000 paper I-Bond received today March 29th

Seems silly to some, I'm sure, but I am excited to finally receive the 5k denomination. I have been overpaying with extension 4868 since 2012 and always had received the 50, 200, 500, 1000 collection.

In regards to converting or not. What I've done is converted all the paper 50's, 200's and 500's since 2012. I keep the paper 1000's and now will keep the 5000.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by CletusCaddy »

HerrRogan wrote: Wed Mar 29, 2023 10:41 am Very quick turnaround this year.

Federal return accepted March 15th
Excess federal refund direct deposit received March 20th
$5,000 paper I-Bond received today March 29th

Seems silly to some, I'm sure, but I am excited to finally receive the 5k denomination. I have been overpaying with extension 4868 since 2012 and always had received the 50, 200, 500, 1000 collection.

In regards to converting or not. What I've done is converted all the paper 50's, 200's and 500's since 2012. I keep the paper 1000's and now will keep the 5000.
Do you keep the paper at your house? Safe deposit box? Under mattress?
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by CletusCaddy »

legalwriter1 wrote: Wed Mar 29, 2023 10:18 am
greenspam wrote: Wed Mar 29, 2023 9:20 am Just a quick note; a month after 9/11 had occurred (oct 2001), seeking a 'safe' investment, and taking advice on this forum from the i-bond crew (ML, TL?), I invested $27K in i-bonds...

current value: $85.7K WOW !!!
current interest rate: 12.76%

pretty darn good investment,

except i suppose the actual value of the $85.7K is gonna be reduced by about 15-25% by federal taxes (state too???), depending on if/when I cash them...

Any suggestions on how to reduce tax burden on these? my present strategy is to hold as long as possible and cash in during a year when I'm retired and earning much less than now.

thanks all
By comparison, if you invested $27k in the S&P 500 in Oct 2001 and reinvested all dividends, you would have around $139k in October 2022 (8.1% annual return not adjusted for inflation or 5.5% annual return adjusted for inflation). I still love my I-bonds, but it's still good to be in the market and diversify.
Why would you ever compare equity returns with savings bonds?
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by malabargold »

Because over the long term diversified stocks are safer than bonds
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by cshell2 »

CletusCaddy wrote: Wed Mar 29, 2023 10:51 am
HerrRogan wrote: Wed Mar 29, 2023 10:41 am Very quick turnaround this year.

Federal return accepted March 15th
Excess federal refund direct deposit received March 20th
$5,000 paper I-Bond received today March 29th

Seems silly to some, I'm sure, but I am excited to finally receive the 5k denomination. I have been overpaying with extension 4868 since 2012 and always had received the 50, 200, 500, 1000 collection.

In regards to converting or not. What I've done is converted all the paper 50's, 200's and 500's since 2012. I keep the paper 1000's and now will keep the 5000.


Do you keep the paper at your house? Safe deposit box? Under mattress?

I just keep mine in a safe in the house (although tbh, most of the time the safe is unlocked and open, so may as well be in a desk drawer)

I have a list of all serial numbers and issue dates in an Excel file that is saved in numerous locations so if anything ever did happen to them, they're easily replaceable.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by erp »

HerrRogan wrote: Wed Mar 29, 2023 10:41 am Seems silly to some, I'm sure, but I am excited to finally receive the 5k denomination. I have been overpaying with extension 4868 since 2012 and always had received the 50, 200, 500, 1000 collection.

In regards to converting or not. What I've done is converted all the paper 50's, 200's and 500's since 2012. I keep the paper 1000's and now will keep the 5000.
It seems like if keeping paper, then the small denominations are more flexible when it comes to redemptions.

And for those who convert to electronic, why don't they just partner up and buy gift bonds each year in the extra amount they want (and avoid the tax refund hassle)? They would just swap down the road when they were no longer purchasing new ones.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Mel Lindauer »

exodusNH wrote: Wed Mar 29, 2023 9:57 am
Mel Lindauer wrote: Fri Mar 17, 2023 8:33 pm
dcabler wrote: Fri Mar 17, 2023 7:10 pm
Mel Lindauer wrote: Fri Mar 17, 2023 2:52 pm ^^^ While it's probably highly unlikely, that really doesn't matter at all if you happen to be the first and become the poster boy for how it was done. You can't go crying to TD, since you were warned.
Somebody's always going to be the first at something. I might get in a car accident. You as well. (heaven forbid on both counts) but I can think a lot of risks I'm taking elsewhere with higher probability than this with significantly more impact. Wouldn't surprise me a bit if this might be the case for you as well. As for me, I'll continue to not lose sleep over this.

Cheers (really, cheers!) :D
Let's hope that neither you nor anyone else has to be the first. That's simply a risk I'm not willing to take since I already have more than my fair share of high fixed rate I Bonds.
Unfortunately, it's a risk one can't avoid if one needs to accumulate I Bonds.

In terms of sending new paper bonds to be converted, well, it a matter of balancing risks. Keeping paper bonds might have some advantages, but now you've increased the number of ways you can have problems. (A related example would be requiring company executives to fly on separate flights. While you've reduced the maximum damage, you've multiplied your chances of having an incident as the events are usually uncorrelated.)

Not to mention the scattershot response to paper bond refunds.

I also strongly suspect that, being a US Government website, it is MUCH less likely to be attacked by scammers. As a division of the US Treasury, you REALLY don't want to be on the other side of an investigation. (It's like the jokers who rob banks. Don't do that. Why tussle with the FBI? Knock over a convenience store so that you're only dealing with local police.)
1. Putting all your eggs in one basket (as with TD), you're taking on risk that can be diversified away by having some paper I Bonds if/when the TD site is down or you're locked out and trying to get back in. And, having both options, if you can't find a bank to redeem the paper ones, you still have TD to fall back on. Nice to have choices.
2. Actually, while you and others here seem to focus on the low odds of TD getting hacked, TD is worried about someone cleaning out your TD account using YOUR login info, so they specifically state that they won't make you whole if that happens. So folks need to focus on protecting that avenue (possibly even more) as much as worrying about TD being hacked since most posts on this topic (like yours) seem to focus on the low odds of TD getting hacked and don't even mention the other way.
Best Regards - Mel | | Semper Fi
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by exodusNH »

Mel Lindauer wrote: Wed Mar 29, 2023 6:08 pm 2. Actually, while you and others here seem to focus on the low odds of TD getting hacked, TD is worried about someone cleaning out your TD account using YOUR login info, so they specifically state that they won't make you whole if that happens. So folks need to focus on protecting that avenue (possibly even more) as much as worrying about TD being hacked since most posts on this topic (like yours) seem to focus on the low odds of TD getting hacked and don't even mention the other way.
I understand what your saying. But that's not anything out of the ordinary. If someone gets your credentials for your bank or Vanguard and transfers your money somewhere else, I don't think they'd make you whole unless you could prove it was a flaw in their system that allowed it to happen.

Someone could get your credentials for TD and try adding a new bank to the account. We know what has historically been a very difficult process with TD.

Really, the attack would be to login into your account with stolen credentials, have TD cash out a bond, and send the money to your already linked account. Then, they'd need to get your login credentials for your linked bank account and send money out of that.

You've now needed to compromise two completely independent systems to even have a chance to send money elsewhere. Maybe you could use Zelle, but that's all traceable.

Plus this includes misusing a US Government system. They really, really, frown upon that.

I think you're much more likely to misplace a paper certificate or have it damaged, whether by water, fire, or animal activity.
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