Treasury Direct and Citibank

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beyou
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Treasury Direct and Citibank

Post by beyou »

i have been funding new trusts, and wanted to share my experience should it help others, and of course happy to get suggestions.

Created new Treasury Direct trust acct.
Already had 20 year old acct in my name (no trust).

TD would not let me transfer bonds online due to size of account. Wanted dreaded sig guaranteed form requesting transfer.

So I marched to my local Citibank branch, and while many of us have posted about their bad phone/online support, at the branch they were golden. Got my medallion sig in 10 mins.

Send transfer form off. Also did a test transaction to deposit cash for future purchase. Day of test deposit, I get a security email that acct is locked, have to do yet another sig guaranteed form to unlock. Sheesh.

March back to Citi, and again to PO, now waiting to have my new trust acct unlocked. They have my test deposit, a request to move my portfolio to this new acct, and no way to login and see progress, yet.

Called TD to discuss and the wait was 1 hr 45 mins with no ability to get a call back. Makes Vanguard look really good ! I hung up and decided to wait on the outcome of the mail and forms processing.

At this point, regardless of outcome, not planning to buy more savings bonds, just liquidate as it makes sense financially. This is just too annoying, the power they wield without the resources to answer phones/emails nor common sense to avoid ridiculous security theater. I am a 20 year long time customer, and NOW I am a security threat ?
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Re: Treasury Direct and Citibank

Post by Blue456 »

I had awful experiences with TD as well. I used to store my emergency fund in there but changing my mind after locking my account several times. Each time I had to wait until vacation to get it unlocked. Too bad because TD could be used as a nice online bank alternative.
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Re: Treasury Direct and Citibank

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Re: Treasury Direct and Citibank

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Re: Treasury Direct and Citibank

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Juice3 wrote: Tue Mar 21, 2023 5:23 am Treasury Direct is a government organization and behaves about like most would expect of a government organization.

Citibank on the other hand. Avoid them, you have been warned. Read why on any number of threads.
That was part of my point, I have posted negative experiences with Citibank. But many have posted that their bank wont do sig gurantee/medallion stamps. Citibank happily did this for me twice.

The main serious problem people had with Citi, was bonus chasers opening new accts and then treated as criminals when funding. I do not plan any new accounts with Citi ever again, but keeping my checking and cc just because of the ease of signature guarantee.

If anything, the problem I had with TD, was similar to what people experienced with Citi, opened new acct, was able to login until I made a deposit, and suddenly I was suspicious, locking my acct. Citi is bad, TD is worse.
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Re: Treasury Direct and Citibank

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beyou wrote: Tue Mar 21, 2023 4:14 amAlso did a test transaction to deposit cash for future purchase. Day of test deposit, I get a security email that acct is locked, have to do yet another sig guaranteed form to unlock.
Do you have any idea how a simple deposit could result in access being locked out?

I have done several small deposits and never encountered any problem. Did you direct a deposit of more than $1k into the C of I account? The transaction limit is $1k.
Called TD to discuss and the wait was 1 hr 45 mins with no ability to get a call back.
They are short staffed because they are not allowed to hire more people. So, it is best to call them when they first open at 8 a.m. ET. They can unlock you over the phone.
At this point, regardless of outcome, not planning to buy more savings bonds, just liquidate as it makes sense financially. This is just too annoying, the power they wield without the resources to answer phones/emails nor common sense to avoid ridiculous security theater. I am a 20 year long time customer, and NOW I am a security threat ?
Your concerns are certainly valid. And if you feel so strongly, you should vote with your feet.
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Re: Treasury Direct and Citibank

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HueyLD wrote: Tue Mar 21, 2023 6:05 am
beyou wrote: Tue Mar 21, 2023 4:14 amAlso did a test transaction to deposit cash for future purchase. Day of test deposit, I get a security email that acct is locked, have to do yet another sig guaranteed form to unlock.
Do you have any idea how a simple deposit could result in access being locked out?

I have done several small deposits and never encountered any problem. Did you direct a deposit of more than $1k into the C of I account? The transaction limit is $1k.
Called TD to discuss and the wait was 1 hr 45 mins with no ability to get a call back.
They are short staffed because they are not allowed to hire more people. So, it is best to call them when they first open at 8 a.m. ET. They can unlock you over the phone.
At this point, regardless of outcome, not planning to buy more savings bonds, just liquidate as it makes sense financially. This is just too annoying, the power they wield without the resources to answer phones/emails nor common sense to avoid ridiculous security theater. I am a 20 year long time customer, and NOW I am a security threat ?
Your concerns are certainly valid. And if you feel so strongly, you should vote with your feet.
$50 to c of i

Some financial institutions view new acct transactions suspiciously. No sense seeing it is an acct with same social sec # and address as a 20 year customer. And why do they think people open accounts if not to use them ?

I was told by email that I MUST use the form with sig guarantee to unlock due to “security precautions”.
A call would have been to complain, and understand what they may do with my transfer request already received while I am in the penalty box and they wait for my unlock form. Even if they let me unlock by phone, was quicker to go to Citibank and USPS than the hold time.

If the Treasury isn’t allowed to hire more people or fix their security procedures to meet demand, then my common sense says I am not allowed to buy more savings bonds.
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Re: Treasury Direct and Citibank

Post by KarlJ »

I think testing a new TD Trust account with a small transaction may have been a mistake. According to the following website:

https://thefinancebuff.com/buy-more-i-b ... trust.html

A transaction in the receiving account will result in a one-year delay before any transfer can be completed.

I am in the middle of the process where the desired end result is a TD Trust account housing all my I-Bonds. I have avoided making any kind of transaction in the receiving account until the transfer is completed. I figure based on my first transfer that this will take 16 weeks for my second transfer. Getting a Medallion is a hassle where I live, where the Chase bank that issues Medallions does not appreciate that I only have a Chase credit card, where the entrance says Private Client ($250,000 minimum account).

Why don't I just cash out everything? That was my kneejerk reaction when I first started having difficulty dealing with TD. The delays gave me a long time to consider what my lifetime goal was for the funds at TD. My conclusion was to stick with TD despite the hassles due to the uniqueness of I-Bonds that play an important role in meeting my lifetime financial goals.
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Re: Treasury Direct and Citibank

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KarlJ wrote: Tue Mar 21, 2023 11:11 am I think testing a new TD Trust account with a small transaction may have been a mistake. According to the following website:

https://thefinancebuff.com/buy-more-i-b ... trust.html

A transaction in the receiving account will result in a one-year delay before any transfer can be completed.
I do not agree. All I did was send cash to the C of I account, which is a cash balance that can later be used ti buy either US Treasuries or Savings bonds. The article was warning that the Treasury is trying to enforce the $10k savings bond limit, which has nothing to so with C of I cash balance.

Per the linked article, they don’t want you to buy $10k in each of 2 accts and then transfer to combine them, effectively bypassing their annual limits. This is not what I tried to do. I requested to transfer savings bonds but not to buy new ones.

I think in my case, this is the same old Know Your Customer / Anti Money Laundering “intelligence” to trap possible fraud/laundering/terrorism. Bad logic but an attempt that they are obligated to try somehow.
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Re: Treasury Direct and Citibank

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Re: Treasury Direct and Citibank

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Juice3 wrote: Wed Mar 22, 2023 5:11 am
beyou wrote: Tue Mar 21, 2023 5:49 am
Juice3 wrote: Tue Mar 21, 2023 5:23 am Treasury Direct is a government organization and behaves about like most would expect of a government organization.

Citibank on the other hand. Avoid them, you have been warned. Read why on any number of threads.
That was part of my point, I have posted negative experiences with Citibank. But many have posted that their bank wont do sig gurantee/medallion stamps. Citibank happily did this for me twice.
Providing an expected service does not make a vendor worthy. I maintain my statement about Citibank, avoid them.
beyou wrote: Tue Mar 21, 2023 5:49 am The main serious problem people had with Citi, was bonus chasers opening new accts and then treated as criminals when funding. I do not plan any new accounts with Citi ever again, but keeping my checking and cc just because of the ease of signature guarantee.
The main problem with Citibank is they are not able to handle the unexpected. This is why there are so many reports that Citibank has the worst customer service. Citibank manage to achieve this worst even when including Sub Prime (payday) lenders.

I hope you have considered carefully that are willing to accept this unusually low level of customer service from Citibank in return for ease of signature guarantee. I would not accept this.
beyou wrote: Tue Mar 21, 2023 5:49 am If anything, the problem I had with TD, was similar to what people experienced with Citi, opened new acct, was able to login until I made a deposit, and suddenly I was suspicious, locking my acct. Citi is bad, TD is worse.
TD is not worse. They are a government based organization. Like many government based organization they provide a unique service often at a lower standard of customer service than commercial organizations. TD has no/limited alternatives. TD just is TD.

Read peoples stories about Citibank. What makes them hands down worst if how things are handled. Find the stories and list how many 10s or 100s of thousand dollars Citibank blocks customer access to for many months. How Citibank CSR run customer around in circles providing limited information and no way out.

My personal interactions with Citibank have characteristics of bad interpersonal relationships. Citibank frequently deploys strategies of gaslighting and goal post moving. These are characteristics of abusive relationships.

I am happy that you are yet to run into a problem with Citibank and hope that you never do run into a problem. But if you do, I am sorry for the experience Citi will put you though.

Citi is bad and worse and worst.
There are unlimited alternatives to TD.
One can buy interest bearing government bonds from literally any broker. In fact I would say the alternatives are superior investments (more liquid, better service).

If you live near a Citi branch, and visit the branch, their service in the branch is excellent. Night and day vs dealing with their nightmarish call centers. I wouldn’t bank with them if not living near a branch. Historically most banks were setup for branch banking where you walk in, talk to a person and show id to open accts. Online-only banks like Ally, were designed for customers they will never meet. I make a point to know and speak to people in my local branch. They know me by name and go out if their way to help me when there in person. Phone support to call center, yeah I have had the experience getting India where nobody has authority to fix anything, but this is not true in their branches. I had the opposite experience with some brokers, like etrade, where branch staff were powerless to do anything, why have any ? Went to branch and all they do is call same place you could call yourself, or mail in your forms where you could mail them. Etrade was built for online service, Citi and many banks for in-person “relationship” banking. I don’t place too high a value on the relationship banking, but there are some services they provide that I can’t get from etrade, Vanguard and online banks.

And I wont have 10s of thousands locked up, I keep a tiny balance in checking, and usually an equivalent amount of Citi cc debt. If they seize my checking acct, good luck collecting on my cc. This is called right to offset, they have the right but so do you. And no bank is what I consider a place to “save/invest”. Checking and credit cards, mortgages. Better to owe them more than you have on deposit, then when they call to collect you can say, “let me transfer you to my department that pays debt to banks that froze my acct….sorry they are busy now, 2 hour wait, please hold”. And with a low balance, you can take them to small claims court if the CFPB does not get action.

As to expected service, many bogleheads reported that their bank will no longer do medallion and don’t know what is a signature guarantee. Even Citi who gave me a medallion, had no idea what TD is talking about as far as the alternative to medallion.
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Re: Treasury Direct and Citibank

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beyou wrote: Wed Mar 22, 2023 6:31 am If they seize my checking acct, good luck collecting on my cc. This is called right to offset, they have the right but so do you. And no bank is what I consider a place to “save/invest”. Checking and credit cards, mortgages. Better to owe them more than you have on deposit, then when they call to collect you can say, “let me transfer you to my department that pays debt to banks that froze my acct….sorry they are busy now, 2 hour wait, please hold”. And with a low balance, you can take them to small claims court if the CFPB does not get action.

As to expected service, many bogleheads reported that their bank will no longer do medallion and don’t know what is a signature guarantee. Even Citi who gave me a medallion, had no idea what TD is talking about as far as the alternative to medallion.
You definitely do not have a right of offset, and not paying your credit card bill because they froze your checking account will most likely result in them taking action against your card account and reporting the late payment(s) to credit bureaus.

I think you may have a good Citi branch near you, but they're not all great. I still bank with them, mostly for the TYP and ease of setting up recurring wires, but do very minimal daily banking with them. My experience dealing with issues on the deposit side (when I banked with them more) has been horrendous. Not a single issue was resolved in a manner where I could say "that worked, thank you." On the other hand, on the credit card servicing side, they're the second best issuer I've dealt with.
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Re: Treasury Direct and Citibank

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hachiko wrote: Wed Mar 22, 2023 8:36 am
beyou wrote: Wed Mar 22, 2023 6:31 am If they seize my checking acct, good luck collecting on my cc. This is called right to offset, they have the right but so do you. And no bank is what I consider a place to “save/invest”. Checking and credit cards, mortgages. Better to owe them more than you have on deposit, then when they call to collect you can say, “let me transfer you to my department that pays debt to banks that froze my acct….sorry they are busy now, 2 hour wait, please hold”. And with a low balance, you can take them to small claims court if the CFPB does not get action.

As to expected service, many bogleheads reported that their bank will no longer do medallion and don’t know what is a signature guarantee. Even Citi who gave me a medallion, had no idea what TD is talking about as far as the alternative to medallion.
You definitely do not have a right of offset, and not paying your credit card bill because they froze your checking account will most likely result in them taking action against your card account and reporting the late payment(s) to credit bureaus.

I think you may have a good Citi branch near you, but they're not all great. I still bank with them, mostly for the TYP and ease of setting up recurring wires, but do very minimal daily banking with them. My experience dealing with issues on the deposit side (when I banked with them more) has been horrendous. Not a single issue was resolved in a manner where I could say "that worked, thank you." On the other hand, on the credit card servicing side, they're the second best issuer I've dealt with.
I worked for major asset managers and on credit risk management, meaning measuring how much potential loss for a fund/portfolio when a broker (like Lehman) goes under. Lehman and other global banks create separate legal entities for different lines of business. Following the strict legal rights to offset, asset managers could end up owing one entity of a Lehman, but be owed by another entity. You would be asked to pay what you owe and likely given little or nothing of what is owed to you. So we debated if we should assume such worst case risk, and the decision was more or less “he who has the gold makes the rules”. We decided to assume we would NOT pay obligations to a failed bank/broker in excess of what they owe us and defaulted, and lawyer up to defend our case in court, protecting our clients. Our legal and risk managers said while aggressive, it is the right approach to take.

On a more personal level, I would make the so called min payments on my cc for months until they returned my deposit acct frozen funds, and make sure they know I plan to sue them if they do not return my frozen deposit funds. Small claims court in appropriate cases can help. Family member atty can handle a larger issue (which wont happen because I do not leave large balances earning zero rates). There is also the FCPB complaint.

I have had Citi checking for decades, and visited many branches in their traditional home area (NYC and burbs). Always excellent service in any branch I went for services, but it is better to stick with one local branch so they get to know you a bit.

As far as the cc being better, I don’t see it.
Whenever I have had anything unusual it takes them longer to resolve than Chase, Amex, my other main cards.
Recently I had a large credit applied to my citi card, and I was anxious that I would not get the credit from another terrible company that I was trying to terminate services. I see a “pending” credit, next day no longer there, just vanished. Called Citicard call center and they tell me will take 24 hours to re-appear. 24 hrs later, still not there, call again, they tell me 3-5 days. It posted next day. They literally have no idea how their systems handle refunds, but now I see they systemically handle them different from every other cc I ever used. All other the credit appears either as posted initially, or pending, then posted next day. Why show the customer a transaction, then hide it for 2 days ? Just bad system design, and bad support. I didn’t have to go to the branch given it took 2 days to resolve, but it does have the worst service of any cc I have had. Fortunately we don’t need much service on a cc. But when these days I think about the nature of a charge, the likelihood I may have a problem with a merchant, and if any doubt, use Chase or Amex, not Citi, so I reduce chances I have to contact Citi.

But hey, most of the time, I have more of their money than they have of mine, and he who has the gold makes the rules. And in my decades of using Citi services (which used to be excellent) recent issues have MOSTLY been cc related, and pleasant surprises with superior service have been on my checking deposit acct.
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Re: Treasury Direct and Citibank

Post by hachiko »

beyou wrote: Wed Mar 22, 2023 10:56 am
hachiko wrote: Wed Mar 22, 2023 8:36 am
beyou wrote: Wed Mar 22, 2023 6:31 am If they seize my checking acct, good luck collecting on my cc. This is called right to offset, they have the right but so do you. And no bank is what I consider a place to “save/invest”. Checking and credit cards, mortgages. Better to owe them more than you have on deposit, then when they call to collect you can say, “let me transfer you to my department that pays debt to banks that froze my acct….sorry they are busy now, 2 hour wait, please hold”. And with a low balance, you can take them to small claims court if the CFPB does not get action.

As to expected service, many bogleheads reported that their bank will no longer do medallion and don’t know what is a signature guarantee. Even Citi who gave me a medallion, had no idea what TD is talking about as far as the alternative to medallion.
You definitely do not have a right of offset, and not paying your credit card bill because they froze your checking account will most likely result in them taking action against your card account and reporting the late payment(s) to credit bureaus.

I think you may have a good Citi branch near you, but they're not all great. I still bank with them, mostly for the TYP and ease of setting up recurring wires, but do very minimal daily banking with them. My experience dealing with issues on the deposit side (when I banked with them more) has been horrendous. Not a single issue was resolved in a manner where I could say "that worked, thank you." On the other hand, on the credit card servicing side, they're the second best issuer I've dealt with.
I worked for major asset managers and on credit risk management, meaning measuring how much potential loss for a fund/portfolio when a broker (like Lehman) goes under. Lehman and other global banks create separate legal entities for different lines of business. Following the strict legal rights to offset, asset managers could end up owing one entity of a Lehman, but be owed by another entity. You would be asked to pay what you owe and likely given little or nothing of what is owed to you. So we debated if we should assume such worst case risk, and the decision was more or less “he who has the gold makes the rules”. We decided to assume we would NOT pay obligations to a failed bank/broker in excess of what they owe us and defaulted, and lawyer up to defend our case in court, protecting our clients. Our legal and risk managers said while aggressive, it is the right approach to take.

On a more personal level, I would make the so called min payments on my cc for months until they returned my deposit acct frozen funds, and make sure they know I plan to sue them if they do not return my frozen deposit funds. Small claims court in appropriate cases can help. Family member atty can handle a larger issue (which wont happen because I do not leave large balances earning zero rates). There is also the FCPB complaint.
That's fine, you can do what you want. But I'm just clarifying for others that this is not a contractually allowed method to satisfy your obligations.

How you treat assets and liabilities for financial reports has zero to do with what an individual is allowed or required to do in a situation.
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Re: Treasury Direct and Citibank

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hachiko wrote: Wed Mar 22, 2023 11:27 am
beyou wrote: Wed Mar 22, 2023 10:56 am
hachiko wrote: Wed Mar 22, 2023 8:36 am
beyou wrote: Wed Mar 22, 2023 6:31 am If they seize my checking acct, good luck collecting on my cc. This is called right to offset, they have the right but so do you. And no bank is what I consider a place to “save/invest”. Checking and credit cards, mortgages. Better to owe them more than you have on deposit, then when they call to collect you can say, “let me transfer you to my department that pays debt to banks that froze my acct….sorry they are busy now, 2 hour wait, please hold”. And with a low balance, you can take them to small claims court if the CFPB does not get action.

As to expected service, many bogleheads reported that their bank will no longer do medallion and don’t know what is a signature guarantee. Even Citi who gave me a medallion, had no idea what TD is talking about as far as the alternative to medallion.
You definitely do not have a right of offset, and not paying your credit card bill because they froze your checking account will most likely result in them taking action against your card account and reporting the late payment(s) to credit bureaus.

I think you may have a good Citi branch near you, but they're not all great. I still bank with them, mostly for the TYP and ease of setting up recurring wires, but do very minimal daily banking with them. My experience dealing with issues on the deposit side (when I banked with them more) has been horrendous. Not a single issue was resolved in a manner where I could say "that worked, thank you." On the other hand, on the credit card servicing side, they're the second best issuer I've dealt with.
I worked for major asset managers and on credit risk management, meaning measuring how much potential loss for a fund/portfolio when a broker (like Lehman) goes under. Lehman and other global banks create separate legal entities for different lines of business. Following the strict legal rights to offset, asset managers could end up owing one entity of a Lehman, but be owed by another entity. You would be asked to pay what you owe and likely given little or nothing of what is owed to you. So we debated if we should assume such worst case risk, and the decision was more or less “he who has the gold makes the rules”. We decided to assume we would NOT pay obligations to a failed bank/broker in excess of what they owe us and defaulted, and lawyer up to defend our case in court, protecting our clients. Our legal and risk managers said while aggressive, it is the right approach to take.

On a more personal level, I would make the so called min payments on my cc for months until they returned my deposit acct frozen funds, and make sure they know I plan to sue them if they do not return my frozen deposit funds. Small claims court in appropriate cases can help. Family member atty can handle a larger issue (which wont happen because I do not leave large balances earning zero rates). There is also the FCPB complaint.
That's fine, you can do what you want. But I'm just clarifying for others that this is not a contractually allowed method to satisfy your obligations.

How you treat assets and liabilities for financial reports has zero to do with what an individual is allowed or required to do in a situation.
It wasn’t for “financial reports” only, it was a legal strategy decided by a major asset manager charged with protecting it’s client’s $. In my case, I am an asset manager charged with protecting my own $ and I would do whatever it takes to accomplish that objective. Do you think Citi is following the law by holding. people’s money indefinitely with no communication ! No they are not, and success of CFPB complaints proves that to be the case. There is the law, and the application of the law.
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Re: Treasury Direct and Citibank

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Re: Treasury Direct and Citibank

Post by beyou »

Juice3 wrote: Thu Mar 23, 2023 7:47 am
beyou wrote: Wed Mar 22, 2023 6:31 am There are unlimited alternatives to TD.
You are not being logical.
Wikipedia wrote: TreasuryDirect is a website run by the Bureau of the Fiscal Service under the United States Department of the Treasury that allows US individual investors to purchase treasury securities, such as savings bonds, directly from the US government.
What other website is run by a part of the U.S. government that allows purchase of treasury security and is generally comparable to TD?

Perhaps the answer to your question is to not use TD. Especially if TD is not meeting your needs and those needs have alternatives places where they can be met.

Citibank that has a competitor on every corner offering very similiar services. I am happy that you are a fan of Citibank. My point is few are Citibank fans with good reason. Citibank is not a good place to deposit bank.

Best of luck to you.
You can buy US Tsy bonds from literally thousands of brokers. Savings bonds are not a required part of anyone’s portfolio.

As I said, MANY banks wont do medallion stamp, Citibank still does it. Not all banks provide exact same services, and this is a good reason for having multiple bank accounts.
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Re: Treasury Direct and Citibank

Post by KarlJ »

You can buy US Tsy bonds from literally thousands of brokers. Savings bonds are not a required part of anyone’s portfolio.
Cashing out generates a big tax bill and one is also losing a unique taxable space that is tax deferred. If none of the I-Bonds mature within one's lifetime, this is essentially a tax-free for one's lifetime. After cashing out, the proceeds would be in a taxable account where the best substitute for I-Bonds is probably TIPS, where "Phantom Income" makes taxes a nightmare. Having no IRA space makes it an easy call for me: don't cash out.
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Re: Treasury Direct and Citibank

Post by beyou »

KarlJ wrote: Sat Mar 25, 2023 5:08 pm
You can buy US Tsy bonds from literally thousands of brokers. Savings bonds are not a required part of anyone’s portfolio.
Cashing out generates a big tax bill and one is also losing a unique taxable space that is tax deferred. If none of the I-Bonds mature within one's lifetime, this is essentially a tax-free for one's lifetime. After cashing out, the proceeds would be in a taxable account where the best substitute for I-Bonds is probably TIPS, where "Phantom Income" makes taxes a nightmare. Having no IRA space makes it an easy call for me: don't cash out.
Tax free space can be had in your 401k, and having too much tax free (vs Roth) is not necessarily a good thing in the long run.
One wants a balance of tax-deferred, Roth and taxable.

I am not planning to cash out all I bought over the years (same problem for e and I bonds).
I would like to but as I said, will cash out as economically advantageous.
This is a good source of retirement income in my 60s, before taking RMDs from the 401k.
That said, when I bought the bonds, Try direct used to give better service, they responded to emails, answered the phone and didn't require sig guarantees for every little thing you wanted to do. I NEVER WOULD HAVE BOUGHT them had I known what the future would bring in terms of their neglecting to service existing bond holders. Just not worth the effort to deal with them, so I no longer plan to buy NEW savings bonds going forward.

Also note I say savings bonds are not required, they are not but didn't make my point/case.
First, if you have a very large portfolio, then the annual $10k limit makes them meaningless. There was a $30k limit years ago when I started buying,
which made them more meaningful and worth having an extra account.
Second, if you have a tiny portfolio, then while the amount is meaningful, the documented and undocumented reasons to lose access to your money can be a serious problem. If you don't have much, locking up your $ for the first year can be problematic for some young investors. Even after that first year, there are the random account locks so you can't login and access your savings, which recently required me to get a sig guarantee, mail in a form and then be told the form may take up to 13 weeks to process. How can you rely on this service if it's a meaningful part of your holdings, and why bother if it's not a meaningful portion ?

As far as TIPS, the income tax is not such a concern to me.

When held in an IRA, no issue there, still tax deferred and no phantom income.

When held in taxable, I only hold via ETF or mutual funds, where the only taxation is on the dividends paid (and those dividends are state tax free
for those of us in high income tax states). Yes no tax deferral but I get a single convenient holding vs a pile of savings bonds bought over many years in a separate account from all other investments. This will also reduce my taxable income when I get to the years where I need ACA healthcare,
Medicare, RMD and social security, spreading out the income across my life. One does not want to have ALL income deferred, just a portion. I accepted this tradeoff years ago not knowing what a hassle it was going to be, sorry I did it.

Note the issue is not just I bonds, but I have old e bonds, which have decent rates, but now locked up by bad service at Try Direct.
I could have put this $ in a good muni fund, avoided taxation and had easy liquid access to my $, or buy a good short-intermediate Treasury ETF/fund
if I prefer Try bonds create protection and willing to access just state tax-free treatment. There are LOTS of more convenient alternatives to e-bonds.
In fact I am earning less on very old e-bonds from a higher rate era than current yields in muni and try funds today, even short-term funds.

Maximizing tax-deferred space is one of many possible goals around which to optimize, but convenience and liquidity are also worthy goals.
In this analysis, one must decide which is more important. Try Direct has tipped the scales (pun intended) away from leaning in their direction, IMO.
I am not in favor of paper bonds as some older posters prefer, I am OK with the Try Direct website, just not OK with their service and locking up my savings, requiring I get multiple signature guarantees to deal with very simple, common needs, then telling me 13 weeks to unlock my account and transfer bonds to my new trust account. Had I bought bond funds at Vanguard, my account would not be locked today, and my request to transfer to a new trust account would be scheduled in 3-5 days instead of 13 weeks.
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beyou
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Re: Treasury Direct and Citibank

Post by beyou »

Note I followed advice on some TD thread to call first thing in the morning when TD opens, to avoid the longer wait.
Past midday calls estimated 2 hours to take my call, so I tried calling just after 8am today.
The results are mixed :

1) Initially was told 1 hour wait time. While better than 2 hours, still ridiculous.

2) Wait time ended up being far less than estimated, took about 20 minutes for them to assign someone.

3) The rep assigned was as rude as they come. Belligerent would be the word I would use to describe the tone.
I told him that I had updated my email address online a long time ago but still getting emails to the old address.
He confirms the system has the correct new email. So I explained again that I am still receiving recent emails to a very old email address
(one that I expect to stop receiving email before the bonds all mature or redeemed). I told him I recently mailed in forms and got confirmation of receipt of the forms to the old address. He says "you didn't tell me you had mailed anything in" in a rude tone, as if I should have known the reason for the email should be related to where they retrieved my email address. He informs me they have some back end system that is NOT updated when you update your email online, and that this is what they used to confirm receipt of paper requests. He says he fixed it, but I asked if this fix is going to cover both of my accounts (old acct and new trust acct), he was vague and hostile in answering my concern.

4) Finally I asked him if there was any way to accelerate unlocking my new trust account, which had to be unlocked with a signature guaranteed form.
Others report you can call and get an account unlocked, but this rep said I have to wait up to 13 weeks for the form to be processed to unlock my acct.
They had the form in their possession, which was the reason for the email to my incorrect older email address, but the email just said I have to wait to get the form processed. I can understand having some requests take longer, like moving bonds to a trust (my other request in a 13 week queue) but to unlock an account...13 weeks ? Ridiculous.

So if anything, my contact today with Try Direct staff confirmed my decision to avoid buying any new savings bonds ever again.
I will have to deal with them to redeem them as they various terms and conditions benefit me (and to spread out the taxable income),
but I don't have to add to the problem at this point.

With all the complaints about Vanguard on this board, I was astonished to get excellent service from Vanguard recently, and terrible service
from Try Direct. Can't wait to get my $ from TD to Vanguard.
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JoMoney
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Re: Treasury Direct and Citibank

Post by JoMoney »

beyou wrote: Wed Mar 29, 2023 7:40 am...having too much tax free (vs Roth) is not necessarily a good thing in the long run.
One wants a balance of tax-deferred, Roth and taxable....
It's a pretty odd scenario where paying taxes on income to save in a "taxable account" is better than putting it in a tax deferred account then paying the same tax rate to convert it to a Roth account.
Aside from those who've saved so much their income is higher in retirement than while working, or have large pensions making up their income when they stop working, most people are likely to have lower tax burden by taking the tax deferral and not withdrawing or converting until they're retired and in a lower bracket.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
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beyou
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Re: Treasury Direct and Citibank

Post by beyou »

JoMoney wrote: Wed Mar 29, 2023 8:01 am
beyou wrote: Wed Mar 29, 2023 7:40 am...having too much tax free (vs Roth) is not necessarily a good thing in the long run.
One wants a balance of tax-deferred, Roth and taxable....
It's a pretty odd scenario where paying taxes on income to save in a "taxable account" is better than putting it in a tax deferred account then paying the same tax rate to convert it to a Roth account.
Aside from those who've saved so much their income is higher in retirement than while working, or have large pensions making up their income when they stop working, most people are likely to have lower tax burden by taking the tax deferral and not withdrawing or converting until they're retired and in a lower bracket.
Not what I was suggesting, not sure how you read such detail into my posts. I was purposely vague and not trying to prescribe what is best for anyone in any scenario, this is an individually determined decision as to how best to use any investment options and based on your tax situation.

But I guess it would be useful to describe SOME scenarios.

Some people with low income may benefit from a direct contribution to Roth IRA. Those with high income can’t do so, but then again is $10k going to be as impactful for someone with very high income ?

Then there is the traditional ira or 401k. For someone of low income, they may not be maxing out such options, and they are far better than savings bonds if for some reason a low income person still wants tax deferral (why-probably better off in Roth?). For someone of very high income maxing out such options, is $10k extra really worth the hassle of TD ? If you do the max 401k, then fund non-deductible T-IRA for backdoor to roth, do you really need to invest the extra $10k into savings bonds ? If I have much more than $10k extra to invest, why have an extra small acct at TD ? I suppose if I had exactly $10k above the max 401k/ND IRA limit it might make sense, except do you want to lock up your last $10k in savings for a year and at random points when they lock your online acct ?

For me personally, as an early retiree, my choice now is between Roth conversions or Savings Bond redemptions, both realizing income in my soon to be lower income years. I have bonds < 30 years that I can redeem or keep a few years longer, each with different terms and conditions based on when purchased over last 20 years. I am choosing to redeem the savings bonds to get my $ out of TD, even if the Roth conversions would have some greater long term benefit. I just can't stand dealing with TD anymore (see my last post on a recent phone call). Once I have redeemed all my savings bonds, maybe I'll do roth conversions, we'll see, but it will take me years to redeem all the savings bonds, due to having started purchasing them 20 years ago when there was a $30k limit per year. I have lots of bonds doubling in value hence $30k principal and $30k interest to report in the coming years. Also, my spouse still works, and we are doing deductible IRA contributions to shield some of her income (later convert to Roth when we can), but no longer buying savings bonds. Not worth the hassle and better to get $ directly or indirectly into Roth when I can.

Finally the rates on savings bonds are not as competitive as they were a few months ago.
So this further diminishes the relative value of the tax deferral vs taxable and even more for IRA accounts.
alphabet
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Re: Treasury Direct and Citibank

Post by alphabet »

I had the same experience. I even called at 8:30 AM and the message was 1 hour wait.
I had a legacy TD bond that was due to mature 2/15/2023. My bank was sold to another institution so I went on TD and printed out the form . I filled it out had it certified and mailed it to TD. this was in October 2022. I never heard from them and started to get worried so I emailed them in January 2023 the return said we received it but haven't reviewed it yet.

But a happy ending on 2/15/2023 the money was direct deposited into my new bank. I am thinking about not reinvesting the T bills I have now because it is a hassle to deal with them.
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KarlJ
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Re: Treasury Direct and Citibank

Post by KarlJ »

TD is by-the-book where you do not have the book. An account is locked, an online transfer is denied all without explanation, all leading to long delays. My guess is that TD thinks revealing the triggering criteria would enable hackers.

I have experienced all the TD hassles mentioned, although the hassles are not enough to do something not in my best financial interest. An objective analysis of my financial situation showed that staying with TD was my best financial option long-term. Near-term pain for long-term gain.
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