I Bonds Mega Thread (I Bond Heads Rejoice!)

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cshell2
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by cshell2 »

Jaylat wrote: Tue May 23, 2023 12:08 pm
cshell2 wrote: Tue May 23, 2023 11:53 am
Jaylat wrote: Tue May 23, 2023 10:09 am
The weird thing is, I received a pretty big refund anyway. I have no idea what the "other debts" might be, but the refund I got included the extra $5,000 I had allocated to I Bonds.
So you got the full amount of the refund you were expecting, it just wasn't in bonds?
Yes, exactly.
Well, that makes zero sense then. I've known people to have tax refunds garnished for debts, but they like...you know...actually take the money to pay the debt.
Jaylat
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Jaylat »

cshell2 wrote: Tue May 23, 2023 12:24 pm
Jaylat wrote: Tue May 23, 2023 12:08 pm
cshell2 wrote: Tue May 23, 2023 11:53 am
Jaylat wrote: Tue May 23, 2023 10:09 am
The weird thing is, I received a pretty big refund anyway. I have no idea what the "other debts" might be, but the refund I got included the extra $5,000 I had allocated to I Bonds.
So you got the full amount of the refund you were expecting, it just wasn't in bonds?
Yes, exactly.
Well, that makes zero sense then. I've known people to have tax refunds garnished for debts, but they like...you know...actually take the money to pay the debt.
Yeah, I actually got a slightly higher refund than I expected, even including the I Bonds. Weird!

Not sure I want to spend an hour on the phone to figure out why.
Mudpuppy
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Mudpuppy »

Jaylat wrote: Tue May 23, 2023 1:14 pm Yeah, I actually got a slightly higher refund than I expected, even including the I Bonds. Weird!

Not sure I want to spend an hour on the phone to figure out why.
Ah, that's the reason the bond purchase didn't go through, they just sent the wrong reason code along. If you make a calculation error in either direction, that will also cause the bond purchase to fail.
Jaylat
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Joined: Sat Mar 12, 2016 10:11 am

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

Post by Jaylat »

Mudpuppy wrote: Tue May 23, 2023 1:24 pm
Jaylat wrote: Tue May 23, 2023 1:14 pm Yeah, I actually got a slightly higher refund than I expected, even including the I Bonds. Weird!

Not sure I want to spend an hour on the phone to figure out why.
Ah, that's the reason the bond purchase didn't go through, they just sent the wrong reason code along. If you make a calculation error in either direction, that will also cause the bond purchase to fail.
Thanks!
Mudpuppy
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Location: Sunny California

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

Post by Mudpuppy »

Jaylat wrote: Tue May 23, 2023 1:36 pm
Mudpuppy wrote: Tue May 23, 2023 1:24 pm
Jaylat wrote: Tue May 23, 2023 1:14 pm Yeah, I actually got a slightly higher refund than I expected, even including the I Bonds. Weird!

Not sure I want to spend an hour on the phone to figure out why.
Ah, that's the reason the bond purchase didn't go through, they just sent the wrong reason code along. If you make a calculation error in either direction, that will also cause the bond purchase to fail.
Thanks!
And just as another data point, my refund was also slightly different than what the tax software said on the e-file form. I can't recall the exact difference or what direction it was in, and I'm not by those records to look it up right now. What I do recall is that the refund had cents in it instead of being a whole-dollar amount, which struck me as odd.
Jaylat
Posts: 349
Joined: Sat Mar 12, 2016 10:11 am

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

Post by Jaylat »

Mudpuppy wrote: Tue May 23, 2023 3:27 pm
Jaylat wrote: Tue May 23, 2023 1:36 pm
Mudpuppy wrote: Tue May 23, 2023 1:24 pm
Jaylat wrote: Tue May 23, 2023 1:14 pm Yeah, I actually got a slightly higher refund than I expected, even including the I Bonds. Weird!

Not sure I want to spend an hour on the phone to figure out why.
Ah, that's the reason the bond purchase didn't go through, they just sent the wrong reason code along. If you make a calculation error in either direction, that will also cause the bond purchase to fail.
Thanks!
And just as another data point, my refund was also slightly different than what the tax software said on the e-file form. I can't recall the exact difference or what direction it was in, and I'm not by those records to look it up right now. What I do recall is that the refund had cents in it instead of being a whole-dollar amount, which struck me as odd.
Yes, same here. I got an extra $140.02 on my rebate. The whole thing seems illogical, but I suppose that's par for the course.
lazyday
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by lazyday »

Here’s one reason it can be difficult to cash savings bonds in person:
https://www.freep.com/story/money/personal-finance/susan-tompor/2023/05/23/fake-savings-bonds-how-to-cash-banks-treasurydirect/70233192007/ wrote:
Authorities claimed that $1 million in counterfeit savings bonds showed up at South Texas banks as part of one crackdown on a scheme to steal money by cashing phony savings bonds, including inflation-indexed or I Bonds, according to the U.S. Attorney's Office for the Southern District of Texas.

Nationwide losses are estimated at over $50 million, according to an alert issued earlier this year by the Oklahoma Bankers Association.

….

Con artists might deposit the bond money into the account but then withdraw the money before the financial institution finds out, through the U.S. Treasury, that the savings bonds were fake. The Treasury later makes an adjustment that leaves the bank or credit union on the hook for the lost money. …. "The U.S. Treasury adjustments can take several days to weeks, which unfortunately aids the fraudster," according to an alert last year by the CUNA Mutual Group, an insurance company that provides services to credit unions and others.
Chase will cash U.S. savings bonds for customers who have banked with Chase for more than a year. But there are limits for how much in savings bonds can be cashed and how much money you can get on the spot.

"We offer up to $500 redemption value — purchase price plus interest — at all of our branches," according to a spokesperson for Chase.
Gadget
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Gadget »

I vaguely remember reading somewhere that if your refund isn't a whole dollar amount, your I Bond purchase won't go through. The system really doesn't like change.

But now I can't find my source on that...
evelynmanley
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Joined: Tue Sep 21, 2010 9:13 am

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

Post by evelynmanley »

Gadget wrote: Wed May 24, 2023 8:07 am I vaguely remember reading somewhere that if your refund isn't a whole dollar amount, your I Bond purchase won't go through. The system really doesn't like change.

But now I can't find my source on that...
https://thefinancebuff.com/overpay-taxe ... le-dollars
protagonist
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Date of I-bond fixed rate change

Post by protagonist »

[This thread has been merged into this on-going discussion thread. Moderator Pops1860]

I want to make sure I understand this. Correct me if I am wrong.

Any I-bond previously issued in any year in the month of May will receive variable rate interest of 6.48% until the END of May, 2023 REGARDLESS of what date in May the I-bonds were previously issued. On June 1 that variable rate will adjust to 3.38% (and will adjust again to a new rate on Dec.1).

Any I-bond previously issued in any year in the month of June will receive variable rate interest of 6.48% until the END of June, 2023 REGARDLESS of what date in June the I-bonds were previously issued. On July 1 that variable rate will adjust to 3.38% (and will adjust again to a new rate on Jan.1).

So the date of issue is unimportant...the rate adjustment takes place at the end of the month.

Am I correct?
toddthebod
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Re: Date of I-bond fixed rate change

Post by toddthebod »

protagonist wrote: Fri May 26, 2023 9:49 am [This thread has been merged into this on-going discussion thread. Moderator Pops1860]

I want to make sure I understand this. Correct me if I am wrong.

Any I-bond previously issued in any year in the month of May will receive variable rate interest of 6.48% until the END of May, 2023 REGARDLESS of what date in May the I-bonds were previously issued. On June 1 that variable rate will adjust to 3.38% (and will adjust again to a new rate on Dec.1).

Any I-bond previously issued in any year in the month of June will receive variable rate interest of 6.48% until the END of June, 2023 REGARDLESS of what date in June the I-bonds were previously issued. On July 1 that variable rate will adjust to 3.38% (and will adjust again to a new rate on Jan.1). Then, the following May 1st, you receive your twelfth interest payment and the variable rate adjusts again.

So the date of issue is unimportant...the rate adjustment takes place at the end of the month.

Am I correct?
That doesn't sound right. Any I bonds bought in May are treated as if they had been bought on May 1st. On June 1st, they are credited with the interest earned for the entire month of May (even if bought on May 31st.) Therefore, on November 1st, you will receive your final interest "payment" of six months at that original rate, and you will start accruing at the new rate.

Interest rates for bonds bought in May adjust on May 1 and November 1. For bonds bought in June, they adjust on June 1 and December 1.
JayDee37
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Location: California

Re: Date of I-bond fixed rate change

Post by JayDee37 »

protagonist wrote: Fri May 26, 2023 9:49 am [This thread has been merged into this on-going discussion thread. Moderator Pops1860]

I want to make sure I understand this. Correct me if I am wrong.

Any I-bond previously issued in any year in the month of May will receive variable rate interest of 6.48% until the END of May, 2023 REGARDLESS of what date in May the I-bonds were previously issued. On June 1 that variable rate will adjust to 3.38% (and will adjust again to a new rate on Dec.1).

Any I-bond previously issued in any year in the month of June will receive variable rate interest of 6.48% until the END of June, 2023 REGARDLESS of what date in June the I-bonds were previously issued. On July 1 that variable rate will adjust to 3.38% (and will adjust again to a new rate on Jan.1).

So the date of issue is unimportant...the rate adjustment takes place at the end of the month.

Am I correct?
This is incorrect. TodtheBod's reply is correct.

To wit:
  • 1. I bonds are considered held for the entirety of the month in which they are purchased (e.g. if you purchase the bond on the 26th of the month, the issue date will still be the 1st of the month).
    2. Any I bond purchase initially receives the composite rate in force at the time of the purchase, and it receives that rate for 6 months.
    3. After six months, the bond resets to the next composite rate in the sequence, and on it goes.


You can visit http://eyebonds.info/ibonds/home10000.html to see when an I bond purchased in any given month will switch to each subsequent composite rate. Be advised that the dollar amounts shown on this site do not account for the 3 month loss of interest penalty for redeeming the bond before the 5 year holding period is up.

Hope this helps.
Tell me, what is it you plan to do with your one wild and precious life? | ~Mary Oliver
protagonist
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Re: Date of I-bond fixed rate change

Post by protagonist »

JayDee37 wrote: Fri May 26, 2023 11:12 am
  • 1. I bonds are considered held for the entirety of the month in which they are purchased (e.g. if you purchase the bond on the 26th of the month, the issue date will still be the 1st of the month).
    2. Any I bond purchase initially receives the composite rate in force at the time of the purchase, and it receives that rate for 6 months.
    3. After six months, the bond resets to the next composite rate in the sequence, and on it goes.


You can visit http://eyebonds.info/ibonds/home10000.html to see when an I bond purchased in any given month will switch to each subsequent composite rate. Be advised that the dollar amounts shown on this site do not account for the 3 month loss of interest penalty for redeeming the bond before the 5 year holding period is up.

Hope this helps.
It does, thanks.

So to clarify, an I-bond issued on any date in May of any previous year would have been getting a variable rate (VR) of 3.38% since May 1, 2023, and an I-bond issued on any date in June would still be getting a variable rate of 6.48% through May, after which the variable rate would switch to 3.38%.

If a May I-bond is redeemed at any date in a future May, it will receive interest through May 31 of the redemption year, regardless of the date in May in which it was redeemed.

Or to generalize for this year:

-Any I-bond issued between the months of May and October in previous years would get a VR of 6.48% this year until the corresponding first of that month in 2023 , at which time the VR would change to the current VR of 3.38%.

-Any I-bond issued between November and April of a previous year will continue to get a VR of 6.48% this year until 6 months following the corresponding issue month this year and then change to 3.38% (so an I-bond issued in a previous April would now be getting a VR of 6.48% until Oct. 1, and then get a VR of 3.38% for the next 6 months.

-Redemption at any time during a given month will pay interest for the entire month.

That seems to make more sense. Do I understand it correctly now?
BrokerageZelda
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Re: Date of I-bond fixed rate change

Post by BrokerageZelda »

protagonist wrote: Fri May 26, 2023 12:58 pm So to clarify, an I-bond issued on any date in May of any previous year would have been getting a variable rate (VR) of 3.38% since May 1, 2023, and an I-bond issued on any date in June would still be getting a variable rate of 6.48% through May, after which the variable rate would switch to 3.38%.

If a May I-bond is redeemed at any date in a future May, it will receive interest through May 31 of the redemption year, regardless of the date in May in which it was redeemed.

Or to generalize for this year:

-Any I-bond issued between the months of May and October in previous years would get a VR of 6.48% this year until the corresponding first of that month in 2023 , at which time the VR would change to the current VR of 3.38%.

-Any I-bond issued between November and April of a previous year will continue to get a VR of 6.48% this year until 6 months following the corresponding issue month this year and then change to 3.38% (so an I-bond issued in a previous April would now be getting a VR of 6.48% until Oct. 1, and then get a VR of 3.38% for the next 6 months.

-Redemption at any time during a given month will pay interest for the entire month.

That seems to make more sense. Do I understand it correctly now?
Almost. One thing I want to correct:

The interest paid on the first of a given month corresponds to the interest earned during the previous month. So a bond issued in May 2023 would have an issue date of May 1, 2023, and it would receive its first interest payment on June 1, 2023, for the interest earned during the month of May 2023.

Redemption at any time during a given month will forfeit the uncredited interest earned during the month of redemption (or, for bonds younger than five years, during the analogous period three months prior). This is why you will hear advice to redeem I Bonds as early in the month as possible.
protagonist
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Re: Date of I-bond fixed rate change

Post by protagonist »

BrokerageZelda wrote: Fri May 26, 2023 1:59 pm
protagonist wrote: Fri May 26, 2023 12:58 pm So to clarify, an I-bond issued on any date in May of any previous year would have been getting a variable rate (VR) of 3.38% since May 1, 2023, and an I-bond issued on any date in June would still be getting a variable rate of 6.48% through May, after which the variable rate would switch to 3.38%.

If a May I-bond is redeemed at any date in a future May, it will receive interest through May 31 of the redemption year, regardless of the date in May in which it was redeemed.

Or to generalize for this year:

-Any I-bond issued between the months of May and October in previous years would get a VR of 6.48% this year until the corresponding first of that month in 2023 , at which time the VR would change to the current VR of 3.38%.

-Any I-bond issued between November and April of a previous year will continue to get a VR of 6.48% this year until 6 months following the corresponding issue month this year and then change to 3.38% (so an I-bond issued in a previous April would now be getting a VR of 6.48% until Oct. 1, and then get a VR of 3.38% for the next 6 months.

-Redemption at any time during a given month will pay interest for the entire month.

That seems to make more sense. Do I understand it correctly now?
Almost. One thing I want to correct:

The interest paid on the first of a given month corresponds to the interest earned during the previous month. So a bond issued in May 2023 would have an issue date of May 1, 2023, and it would receive its first interest payment on June 1, 2023, for the interest earned during the month of May 2023.

Redemption at any time during a given month will forfeit the uncredited interest earned during the month of redemption (or, for bonds younger than five years, during the analogous period three months prior). This is why you will hear advice to redeem I Bonds as early in the month as possible.
Thanks, Zelda!
comeinvest
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by comeinvest »

Quick question: If I want to redeem my I bonds after my 21 months since the effective purchase date expire (18 months favorable interest rates [> T-bill rates] + 3 months to avoid the penalty), then I schedule the redemption for the 1st of the following month, correct? Interest accrues on the last day of the month, and should show in the Treasury Direct account and be available to be withdrawn on the 1st?
So for example if I bought on 12/31/2021, then I would schedule the redemption for exactly Friday 09/01/2023, right? And the money including all interest for 18 months will be in my checking account on ...?
MisterMister
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by MisterMister »

comeinvest wrote: Sun May 28, 2023 8:08 pm Quick question: If I want to redeem my I bonds after my 21 months since the effective purchase date expire (18 months favorable interest rates [> T-bill rates] + 3 months to avoid the penalty), then I schedule the redemption for the 1st of the following month, correct? Interest accrues on the last day of the month, and should show in the Treasury Direct account and be available to be withdrawn on the 1st?
So for example if I bought on 12/31/2021, then I would schedule the redemption for exactly Friday 09/01/2023, right? And the money including all interest for 18 months will be in my checking account on ...?
Yes, the 3.68% lower composite rate on that purchase kicks in in June, so yes you would redeem on 9/1 to surrender the first three months of interest at the lower rate. http://eyebonds.info/ibonds/10000/ib_2021_12.html shows the full values, so a 10K purchase would have a redemption value of $11,208 when redeemed on 9/1/23. You get the correct value from the June column (not the September one) due to the 3-month penalty.

You can't "schedule" the redemption (as far as I know), you need to do it on the date you want it to happen. According to TD, the money should be in the target bank account in two business days; so most likely Tuesday 9/5 if you redeem on Friday 9/1. I did a partial redemption earlier this year on Thursday and the money was in my bank account on Monday.
comeinvest
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by comeinvest »

MisterMister wrote: Mon May 29, 2023 9:44 pm
comeinvest wrote: Sun May 28, 2023 8:08 pm Quick question: If I want to redeem my I bonds after my 21 months since the effective purchase date expire (18 months favorable interest rates [> T-bill rates] + 3 months to avoid the penalty), then I schedule the redemption for the 1st of the following month, correct? Interest accrues on the last day of the month, and should show in the Treasury Direct account and be available to be withdrawn on the 1st?
So for example if I bought on 12/31/2021, then I would schedule the redemption for exactly Friday 09/01/2023, right? And the money including all interest for 18 months will be in my checking account on ...?
Yes, the 3.68% lower composite rate on that purchase kicks in in June, so yes you would redeem on 9/1 to surrender the first three months of interest at the lower rate. http://eyebonds.info/ibonds/10000/ib_2021_12.html shows the full values, so a 10K purchase would have a redemption value of $11,208 when redeemed on 9/1/23. You get the correct value from the June column (not the September one) due to the 3-month penalty.

You can't "schedule" the redemption (as far as I know), you need to do it on the date you want it to happen. According to TD, the money should be in the target bank account in two business days; so most likely Tuesday 9/5 if you redeem on Friday 9/1. I did a partial redemption earlier this year on Thursday and the money was in my bank account on Monday.
Thanks!
Not that I care a lot, but always interesting how the banks thought up reasons and methods so that money takes time to "travel" between banks, when electronic bits and bytes move at the speed of light. Somebody earns some risk-free returns here ;)
QuiGonJohn
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Re: Clarification on iBond Interest Rates

Post by QuiGonJohn »

plutoblackhole wrote: Tue Nov 01, 2022 12:27 pm
You can start from here: https://eyebonds.info/ibonds/index.html -- I had entered the info from your original post about buying $10,000 in May of 2022 (unless I read it wrong).

Interest is a bit oddly calculated, since it's actually based on a $25 bond value. For a $10,000 bond, the interest will always be in increments of $4. To this point, some months you'll see a $4 difference even though they were in the same 6 month period.
So I tried to use this to see what my monthly interest on each 10K iBond will be, May 2023 thru Oct 2023, but didn't seem to be able to get it to work right. We each bought (1) 10K iBond in May 2022. I have each iBond separate in Quicken, so I only need the info for one. Thanks, John
alluringreality
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Re: Clarification on iBond Interest Rates

Post by alluringreality »

QuiGonJohn wrote: Wed May 31, 2023 1:50 pm So I tried to use this to see what my monthly interest on each 10K iBond will be, May 2023 thru Oct 2023, but didn't seem to be able to get it to work right. We each bought (1) 10K iBond in May 2022. I have each iBond separate in Quicken, so I only need the info for one. Thanks, John
Here are redemption values for the next five months on a May 2022 purchase for $10k:
06-01-2023: $10,704.00
07-01-2023: $10,764.00
08-01-2023: $10,820.00 (Last 6.48% composite rate payment)
09-01-2023: $10,852.00 (First of six 3.38% composite rate payments)
10-01-2023: $10,880.00
https://eworkpaper.com/ibond.php
45% US Indexes, 25% Ex-US Indexes, 30% Fixed Income - Buy & Hold
QuiGonJohn
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by QuiGonJohn »

Thanks, but it is so confusing. It seems the monthly interest amount does not stay the same, even within the same 6 month period of when the Inflation Rate is set. You show $60 increase earned in June, then $56 earned in July. After the change in composite that you show, you have $32 earned in August, but only $28 earned in Sept. Also, I'm not clear why the composite rate changes at the end of July. When I bought in May 2022, that should have been the start of a 6 month cycle with 9.62%. Then it changed in Nov 2022 and then again in May 2023. Very hard to wrap my head around this when I've always worked with accounts that are basically bank accounts and interest accrues monthly and if the rate doesn't change, the interest amount doesn't change (except when the prior interest is compounded into the whole thing).
PizzaEater
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by PizzaEater »

QuiGonJohn wrote: Wed May 31, 2023 2:20 pm Thanks, but it is so confusing. It seems the monthly interest amount does not stay the same, even within the same 6 month period of when the Inflation Rate is set. You show $60 increase earned in June, then $56 earned in July. After the change in composite that you show, you have $32 earned in August, but only $28 earned in Sept. Also, I'm not clear why the composite rate changes at the end of July. When I bought in May 2022, that should have been the start of a 6 month cycle with 9.62%. Then it changed in Nov 2022 and then again in May 2023. Very hard to wrap my head around this when I've always worked with accounts that are basically bank accounts and interest accrues monthly and if the rate doesn't change, the interest amount doesn't change (except when the prior interest is compounded into the whole thing).
When the I Bond is less than 5 years old there is a 3-month interest penalty (you don't receive interest for the last 3 months). eyebonds.info does not reflect this so you have to look 3 months in the past for your actual redemption value (for bonds less than 5 years old).

The interest amount can change during a 6-month period due to rounding issues. The way I understand it is the interest for the whole 6 month period is calculated, and then that interest is distributed among the 6 months as evenly as possible (taking into account everything is scaled up from a $25 bond).
alluringreality
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by alluringreality »

QuiGonJohn wrote: Wed May 31, 2023 2:20 pm It seems the monthly interest amount does not stay the same, even within the same 6 month period of when the Inflation Rate is set.
I think the "How interest is calculated" section from the following is correct regarding the variation in month to month payments.
https://www.bogleheads.org/wiki/I_savings_bonds
Also, I'm not clear why the composite rate changes at the end of July. When I bought in May 2022, that should have been the start of a 6 month cycle with 9.62%. Then it changed in Nov 2022 and then again in May 2023.
As noted by PizzaEater, there is a three month penalty for redeeming before five years. In May the first 12 months have passed, but due to the penalty only the first 9 months of payments were available for redemption. After three more months, in August, the first 12 months of payments will be available to redeem.
45% US Indexes, 25% Ex-US Indexes, 30% Fixed Income - Buy & Hold
QuiGonJohn
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by QuiGonJohn »

alluringreality wrote: Wed May 31, 2023 3:04 pm As noted by PizzaEater, there is a three month penalty for redeeming before five years. In May the first 12 months have passed, but due to the penalty only the first 9 months of payments were available for redemption. After three more months, in August, the first 12 months of payments will be available to redeem.
I didn't catch that he had put down redemption values. Since that table has both the current values and the redemption values. I guess my tendency is to not want to deal with redemption values, since I don't intend to cash them in until after the 5 years. Unless, maybe, if we get 3 months of ZERO interest (and I'm on 0% Fixed Rate), then I might cash em in early. And I still feel it should be on the individual to know when/if they have to deduct the 3 months, TD should show the actual current value. Like a savings or checking account, where they show the current balance (and if something is pending that lowers it, then they separately show Available Balance).
Last edited by QuiGonJohn on Fri Jun 02, 2023 8:46 am, edited 2 times in total.
itispossible
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by itispossible »

Hi, how long does it take the money to be transferred to the bank account after the bond is redeemed? Thanks.
bret64
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Joined: Tue Jan 23, 2018 11:12 am

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

Post by bret64 »

I have some I bonds that I bought in December 1 of 2022. It says it is only paying 3.7% currently. And when I look at the interest accumulated from the first 6 months, It works out to be 3.4% on an annualized basis. The rates were much higher when I bought it. Any idea what is happening here? Feels like they messed something up.
jj
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Location: Texas

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

Post by jj »

itispossible wrote: Fri Jun 02, 2023 8:37 am Hi, how long does it take the money to be transferred to the bank account after the bond is redeemed? Thanks.
I've just redeemed some old ones (0% fixed) and it was showing pending in my account the day following redemption, and was in there the day after.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Mel Lindauer »

itispossible wrote: Fri Jun 02, 2023 8:37 am Hi, how long does it take the money to be transferred to the bank account after the bond is redeemed? Thanks.
The proceeds from paper I Bonds redeemed at a bank are available immediately.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Beachey »

bret64 wrote: Fri Jun 02, 2023 8:53 am I have some I bonds that I bought in December 1 of 2022. It says it is only paying 3.7% currently. And when I look at the interest accumulated from the first 6 months, It works out to be 3.4% on an annualized basis. The rates were much higher when I bought it. Any idea what is happening here? Feels like they messed something up.
Until five years, if you redeem the bond, the last 3 months of interest are forfeited and the value on the website reflects that.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by itispossible »

jj wrote: Fri Jun 02, 2023 8:58 am
itispossible wrote: Fri Jun 02, 2023 8:37 am Hi, how long does it take the money to be transferred to the bank account after the bond is redeemed? Thanks.
I've just redeemed some old ones (0% fixed) and it was showing pending in my account the day following redemption, and was in there the day after.
Thank you!
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by itispossible »

Mel Lindauer wrote: Fri Jun 02, 2023 9:02 am
itispossible wrote: Fri Jun 02, 2023 8:37 am Hi, how long does it take the money to be transferred to the bank account after the bond is redeemed? Thanks.
The proceeds from paper I Bonds redeemed at a bank are available immediately.
Thank you!
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by itispossible »

Last couple of years I purchased some I-bonds for child (8 years old). Child has over $50K in this account.

I now think that given the child's age, I would like to redeem the bonds and put it in the equity market. Because it is the child's money, are UTMA/UGMA accounts my only option? I do not have either account but can look into opening one. Any downside to opening these accounts? Thanks.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by evelynmanley »

itispossible wrote: Fri Jun 02, 2023 9:14 am Last couple of years I purchased some I-bonds for child (8 years old). Child has over $50K in this account.

I now think that given the child's age, I would like to redeem the bonds and put it in the equity market. Because it is the child's money, are UTMA/UGMA accounts my only option? I do not have either account but can look into opening one. Any downside to opening these accounts? Thanks.
https://thefinancebuff.com/buy-i-bonds-kids-name.html

<<When you cash out I Bonds from a Minor Linked Account for your child, the money goes to the linked bank account. After that, you can transfer the money to the child’s UTMA account elsewhere for some other investments for your child or spend the money on expenses that specifically benefit the child.

Just like cashing out I Bonds in any other account, by default the accumulated interest is taxable to the child in the year you cash out. TreasuryDirect will generate a 1099-INT form but they won’t send it by mail. You’ll have to remember to come into the Minor Linked Account and download or print the 1099 form. You use the 1099 form to file the tax return for the child.<<
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by lazyday »

Does anyone else get kicked out of their account with an error message, after submitting a redemption? If you figure out how to avoid this please either quote me when posting about it, or PM me.

For me, some redemptions work properly. And one of those that seemed to fail did produce a working redemption, but without any email notification. If you get logged out after submitting a redemption, you can check History or Current Holdings to see if there’s a pending redemption.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by itispossible »

evelynmanley wrote: Fri Jun 02, 2023 9:27 am
itispossible wrote: Fri Jun 02, 2023 9:14 am Last couple of years I purchased some I-bonds for child (8 years old). Child has over $50K in this account.

I now think that given the child's age, I would like to redeem the bonds and put it in the equity market. Because it is the child's money, are UTMA/UGMA accounts my only option? I do not have either account but can look into opening one. Any downside to opening these accounts? Thanks.
https://thefinancebuff.com/buy-i-bonds-kids-name.html

<<When you cash out I Bonds from a Minor Linked Account for your child, the money goes to the linked bank account. After that, you can transfer the money to the child’s UTMA account elsewhere for some other investments for your child or spend the money on expenses that specifically benefit the child.

Just like cashing out I Bonds in any other account, by default the accumulated interest is taxable to the child in the year you cash out. TreasuryDirect will generate a 1099-INT form but they won’t send it by mail. You’ll have to remember to come into the Minor Linked Account and download or print the 1099 form. You use the 1099 form to file the tax return for the child.<<
Thanks very much for this information. Do you happen to know if the child's tax return will be filed as part of the parents or does it have to be a standalone return?

Second, does having UTMA later affect the child's ability to get scholarships to universities?

Thanks again.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by FactualFran »

Beachey wrote: Fri Jun 02, 2023 9:07 am
bret64 wrote: Fri Jun 02, 2023 8:53 am I have some I bonds that I bought in December 1 of 2022. It says it is only paying 3.7% currently. And when I look at the interest accumulated from the first 6 months, It works out to be 3.4% on an annualized basis. The rates were much higher when I bought it. Any idea what is happening here? Feels like they messed something up.
Until five years, if you redeem the bond, the last 3 months of interest are forfeited and the value on the website reflects that.
Some additional details:
  • the composite rate for the first 6 months was 6.89%
  • the "net" rate was about half of that due to the 3 month penalty
  • the composite rate for the second 6 months is 3.79%.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by SnowBog »

QuiGonJohn wrote: Wed May 31, 2023 3:14 pm And I still feel it should be on the individual to know when/if they have to deduct the 3 months, TD should show the actual current value. Like a savings or checking account, where they show the current balance (and if something is pending that lowers it, then they separately show Available Balance).
The counter argument is TD is setup to show "what you see is what you get". Avoids people who don't understand, or forget, the whole 3-month penalty from "complaining" about getting less than was shown in their account. Saves lots of contacts with "support".

From the user side, this is simple - if my balance shows $x, when I redeem I get exactly $x.

It's also easy for anyone planning on holding longer than 5-years, as they can effectively "ignore" the penalty (it won't apply when they sell after 5 years).

The only place this is an issue is for those planning to sell before 5 years, who are trying to "optimize" their sale by "minimizing" the interest penalty. To do so, they need to wait until 3 months of "lower" interest rates apply - so the penalty is those lower rate months not their higher rate months.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Mudpuppy »

itispossible wrote: Fri Jun 02, 2023 9:59 am Second, does having UTMA later affect the child's ability to get scholarships to universities?
This seems like something that would warrant its own thread, as there are many factors to financial aid eligibility beyond UTMAs. Also, although scholarships are typically distributed through the financial aid office, some scholarships are purely merit-based rather than financial-need-based, so you're not quite asking the right question here. I'd suggest making a new thread asking specifically how assets affect need-based financial aid calculations.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by DMoogle »

I bought one Ibond on 12-01-2021 and one Ibond on 01-01-2022. I know I'll take a 3-month interest penalty by selling early, but I'm OK with that as long as it's at the lower rate (~3.38%). When is the earliest I should sell each bond to ensure that the 3-month penalty is only applied to that lower rate?

TreasuryDirect says the interest rate on the 12-01-2021 bond is 3.38% and 6.48% on the 01-01-2022 bond.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by alluringreality »

DMoogle wrote: Mon Jun 12, 2023 11:56 am I bought one Ibond on 12-01-2021 and one Ibond on 01-01-2022. I know I'll take a 3-month interest penalty by selling early, but I'm OK with that as long as it's at the lower rate (~3.38%). When is the earliest I should sell each bond to ensure that the 3-month penalty is only applied to that lower rate?
Looks like September and October.
https://eworkpaper.com/ibond.php
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 DMoogle »

alluringreality wrote: Mon Jun 12, 2023 12:33 pm
DMoogle wrote: Mon Jun 12, 2023 11:56 am I bought one Ibond on 12-01-2021 and one Ibond on 01-01-2022. I know I'll take a 3-month interest penalty by selling early, but I'm OK with that as long as it's at the lower rate (~3.38%). When is the earliest I should sell each bond to ensure that the 3-month penalty is only applied to that lower rate?
Looks like September and October.
https://eworkpaper.com/ibond.php
https://tipswatch.com/2023/03/29/want-t ... ve-a-plan/
Exactly what I needed. Thanks!
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by tj »

DMoogle wrote: Mon Jun 12, 2023 11:56 am I bought one Ibond on 12-01-2021 and one Ibond on 01-01-2022. I know I'll take a 3-month interest penalty by selling early, but I'm OK with that as long as it's at the lower rate (~3.38%). When is the earliest I should sell each bond to ensure that the 3-month penalty is only applied to that lower rate?

TreasuryDirect says the interest rate on the 12-01-2021 bond is 3.38% and 6.48% on the 01-01-2022 bond.
Such information can be located here. https://eyebonds.info/ibonds/index.html

I bought in October 2021 and April 2022, and my understanding is I can sell January 2024, for both, in order to sell at the lower rate.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by dan7800 »

Id like to buy 10k of ibonds for 2023. Would it make the most sense for me to:

1) Buy a 4 month Tbill (the rate will be higher)
2) See what the Ibond rate will be in mid October (for the Nov 1 reset) and I will buy the ibond then (with the knowledge of the October and November 1 rates)?

Thanks all
-Dan
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by HueyLD »

dan7800 wrote: Mon Jun 19, 2023 7:05 am Id like to buy 10k of ibonds for 2023. Would it make the most sense for me to:

1) Buy a 4 month Tbill (the rate will be higher)
2) See what the Ibond rate will be in mid October (for the Nov 1 reset) and I will buy the ibond then (with the knowledge of the October and November 1 rates)?

Thanks all
-Dan
Your idea is a good one.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by evelynmanley »

DMoogle wrote: Mon Jun 12, 2023 11:56 am I bought one Ibond on 12-01-2021 and one Ibond on 01-01-2022. I know I'll take a 3-month interest penalty by selling early, but I'm OK with that as long as it's at the lower rate (~3.38%). When is the earliest I should sell each bond to ensure that the 3-month penalty is only applied to that lower rate?

TreasuryDirect says the interest rate on the 12-01-2021 bond is 3.38% and 6.48% on the 01-01-2022 bond.
I believe this article addresses your question:

Cash Out Old I Bonds to Buy New Ones for a Better Rate
by Harry Sit


https://thefinancebuff.com/switch-old-i ... -rate.html
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by Tom_T »

dan7800 wrote: Mon Jun 19, 2023 7:05 am Id like to buy 10k of ibonds for 2023. Would it make the most sense for me to:

1) Buy a 4 month Tbill (the rate will be higher)
2) See what the Ibond rate will be in mid October (for the Nov 1 reset) and I will buy the ibond then (with the knowledge of the October and November 1 rates)?

Thanks all
-Dan
What you won't know in October is what the new fixed rate will be.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by QuiGonJohn »

Exactly, concern over Fixed Rate. Should try to gauge what it might do in Nov. But unless the Fixed Rate looks solid to stay at .9 or go up. Might be better to buy it in October.
Last edited by QuiGonJohn on Mon Jun 19, 2023 8:48 am, edited 1 time in total.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by alluringreality »

dan7800 wrote: Mon Jun 19, 2023 7:05 am Id like to buy 10k of ibonds for 2023. Would it make the most sense for me to:

1) Buy a 4 month Tbill (the rate will be higher)
2) See what the Ibond rate will be in mid October (for the Nov 1 reset) and I will buy the ibond then (with the knowledge of the October and November 1 rates)?
I did this for January-May, but these sorts of things tend to have some personal choice involved. I decided that the current 0.9% fixed rate was easily better than my other holdings, so I took it in May. I basically use I bonds as emergency funds after a year, and buying in the first month limits the time to pay future inflation. I'm probably going to buy again next year, so for my own purposes I didn't see enough payoff in waiting, since I can buy the November rate next January. The best guess at the current rate from the forum was the following, which seems to be based on discounting the average 5 year rates for TIPS over the 6 months. It's too early to use this at guessing if the next fixed rate might be higher or lower.
viewtopic.php?p=7231977#p7231977
Last edited by alluringreality on Mon Jun 19, 2023 10:34 am, edited 1 time in total.
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by IowaFarmWife »

I bonds and EE bonds made the news today. It seems like some folks are running into issues due to some fake bonds floating around.

https://tinyurl.com/jy6v25s8
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Re: I Bonds Mega Thread (I Bond Heads Rejoice!)

Post by ehh »

IowaFarmWife wrote: Mon Jun 19, 2023 10:33 am I bonds and EE bonds made the news today. It seems like some folks are running into issues due to some fake bonds floating around.

https://tinyurl.com/jy6v25s8
Interesting. And a bit depressing. Paper savings bonds might not be the best choice for an emergency fund or a source of ready cash.

Why can't the Treasury create an online system, available only to banks and credit unions, to allow the teller/banker to key in the paper bond id number and see whether it is a legitimate bond and who the owner(s) are? Or would the criminals simply gain access to such a system, making the fraud situation worse?
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