I-bonds

#1
volinbham

volinbham

VN GURU
Joined
Oct 21, 2004
Messages
69,331
Likes
60,708
#1
Last edited:
  • Like
Reactions: Danl, Go aeiou and Orange.
#2
#2
How are you buying them? I signed up for a treasury direct account and it said it couldn’t verify me and I’d have to send in a medallion stamped form and it’ll take 10-15 days to process. I was going to call the bank and see if I could buy them there.
 
#3
#3
Is the annual limit just for new money? Can what was added in earlier years remain in the program at the current rates offered on newly deposited money?
 
#4
#4
  • Like
Reactions: BigOrangeMojo
#11
#11
Thunder Good-Oil said:
Maybe I read it wrong, but I thought it was $5,000 plus $5,000 through the IRS for $10,000 total. But I read the articles rather than study the Treasury Direct website.
Click to expand...

Individual - Buying Series I Savings Bonds

Highlighted section in green below

How much in I bonds can I buy for myself?
In a calendar year, you can acquire:

  • up to $10,000 in electronic I bonds in TreasuryDirect
  • up to $5,000 in paper I bonds using your federal income tax refund
Two points:

  • The limits apply separately, meaning you could acquire up to $15,000 in I bonds in a calendar year
  • Bonds you buy for yourself and bonds you receive as gifts or via transfers count toward the limit. Two exceptions:
    • If a bond is transferred to you due to the death of the original owner, the amount doesn't count toward your limit
    • If you own a paper bond issued before 2008, you can convert it to an electronic bond in your account in TreasuryDirect regardless of the amount of the bond. (The annual limit before 2008 was greater than today's limit of $10,000.)
 
  • Like
Reactions: Danl and Thunder Good-Oil
#12
#12
DancingOutlaw said:
How are you buying them? I signed up for a treasury direct account and it said it couldn’t verify me and I’d have to send in a medallion stamped form and it’ll take 10-15 days to process. I was going to call the bank and see if I could buy them there.
Click to expand...

I signed up at Treasury Direct with no issues - purchased there.

You can only buy direct. They are not a traded instrument
 
Last edited:
#13
#13
to the earlier question about buying over multiple years and do they continue to earn interest.

as I understand it they mature (eg. earn interest until) after 30 years. you have to keep them for 1 year and if you cash out prior to 5 years you lose the last 3 months interest (a pretty modest penalty).

interest compounds.

unlike other bonds from the gov they begin at the value you bought rather than being bought at a discount and grow to face value.

the limit is calendar year - so for me I can buy again next April.

you get the rates based on when you buy - for example the rate is currently 7.12 and going to 9.6. Even though the rate is about to change to 9.6 I bought at the tail end of 7.12 so I get six months of that rate and six of 9.6 for an annual of 8.37 or something like that. If the rate after 9.6 is going to be higher than 7.12 I would have been better off waiting to buy at 9.6 (May 1) and getting 6 of that and 6 of the new rate.

the good news for those considering buying you have until the next rate change (October?) to lock in the 9.6 for six months.



My PNC "Premier" Money Market was paying me .1% on the same money...
 
#15
#15
DancingOutlaw said:
How are you buying them? I signed up for a treasury direct account and it said it couldn’t verify me and I’d have to send in a medallion stamped form and it’ll take 10-15 days to process. I was going to call the bank and see if I could buy them there.
Click to expand...

volinbham said:
I signed up at Treasury Direct with no issues - purchased there.
Click to expand...

I did the same. I don't recall it taking too long to setup and the funds were pulled from my bank account within a couple of days of requesting it. Was a very smooth process.
 
#16
#16
Well, I took the "I-bonds gift" plunge. Wife and I bought an extra round as gifts for each other. We had already bought as many as are allowed in 2022. I have to wait until next year to give her the gift, but it will draw interest this year. We took them in April so that they'd run the 6 months at the old rate of 7-ish.

You can only buy from treasury direct. The good news is, they're not tradeable, and the treasury has to buy them back from you at face value if you want to sell. Being forced to use treasury direct is the price you pay for that privilege, I guess.

I saw a discussion over on bogleheads that ibonds selling volume is currently 10X above normal (maybe more?) so the customer service times are very bad. So if you have trouble setting up an account, or lock your account, it'll be slow.
 
  • Like
Reactions: volinbham
#18
#18
Firebirdparts said:
Well, I took the "I-bonds gift" plunge. Wife and I bought an extra round as gifts for each other. We had already bought as many as are allowed in 2022. I have to wait until next year to give her the gift, but it will draw interest this year. We took them in April so that they'd run the 6 months at the old rate of 7-ish.
Click to expand...

so do the gift purchases count as your allotment for next year? Or can you effectively do 40K in a year (1 for each, 1 gift for each)?
 
#20
#20
volinbham said:
so do the gift purchases count as your allotment for next year? Or can you effectively do 40K in a year (1 for each, 1 gift for each)?
Click to expand...
They count as the recipient's allotment when given. You can do $100,000 today, but that's going to load up the recipient's quota for 10 years.
 
#21
#21
volinbham said:
I'm helping my parents do this. Did you have to create an account for each of you? If so, can each account draw funds from the same bank account?
Click to expand...
yes and yes.

I claim no expertise on this, but after I figured out a little more, I realized I wanted to make a "registration" if that's what they call it, which has a beneficiary payable on death. Not much extra effort to do that. The first ones I bought, i didn't know enough to do that.
 
  • Like
Reactions: volinbham
#22
#22
Firebirdparts said:
They count as the recipient's allotment when given. You can do $100,000 today, but that's going to load up the recipient's quota for 10 years.
Click to expand...

Interesting - but they start earning interest and I assume the have staggered maturities?

My folks have a pretty decent chunk of cash in savings and I'm trying to find something that earns them some return but is safe. My dad is opposed to online banks so thinks like High Yield Savings at a place Marcus are out.

I also need to be careful with how long the money is locked up since they are quite old and may need to access it for medical or assisted living.
 
  • Like
Reactions: orangebloodgmc
#23
#23
The T-Direct site is typical government. Functionality is that of a website from 10-15 years ago. Email notifications are terse and it that old font that looks like a computer printout from the 80s.
 
#24
#24
volinbham said:
I'm helping my parents do this. Did you have to create an account for each of you? If so, can each account draw funds from the same bank account?
Click to expand...

Yes, each have our own account and we were both able to draw from the same joint checking account. Not sure if it matters if the bank account is not joint (sometimes it does).
 
  • Like
Reactions: volinbham
#25
#25
volinbham said:
The T-Direct site is typical government. Functionality is that of a website from 10-15 years ago. Email notifications are terse and it that old font that looks like a computer printout from the 80s.
Click to expand...

I am not a fan of the website logon with the separate account number and then another page to enter the password on the manual keyboard on the screen. Oh well, I will jump through some hoops for 7-9%. :)
 
New posts
You must log in or register to reply here.

VN Store



Back
Top