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Old 09-03-2014, 08:59 AM   #41
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I bought some of these last month around 8 27 shouldnt the treasury direct account show the interest now for august?


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Old 09-03-2014, 09:32 AM   #42
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I bought some of these last month around 8 27 shouldnt the treasury direct account show the interest now for august?


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Money, if my math is right it goes like this... You will eventually be credited for the entire months interest of August in your account shortly after December 1st. They always hold back the latest 3 months interest until your 5 year anniversary. So in December you will see Augusts interest and then January Septembers interest etc.


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Old 09-03-2014, 11:40 AM   #43
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Money, if my math is right it goes like this... You will eventually be credited for the entire months interest of August in your account shortly after December 1st. They always hold back the latest 3 months interest until your 5 year anniversary. So in December you will see Augusts interest and then January Septembers interest etc.


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That, plus treasury direct sucks big time.
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Old 09-03-2014, 12:29 PM   #44
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That, plus treasury direct sucks big time.

You don't like that fancy little pop up keyboard, Brewer? I have to make sure my reader glasses are nearby whenever I want to go into TD.


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Old 09-03-2014, 02:02 PM   #45
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We put $10,000 into Ibonds several years ago as sort of an emergency fund. The problem is the money doesn't grow.

Made me realize that having money sitting idle like this bothers me more than the risk of an emergency or market downturn.

Going to close the account, lose the 3 months interest (maybe $50), and invest the money somewhere.


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Old 09-03-2014, 02:21 PM   #46
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We put $10,000 into Ibonds several years ago as sort of an emergency fund. The problem is the money doesn't grow.

Made me realize that having money sitting idle like this bothers me more than the risk of an emergency or market downturn.

Going to close the account, lose the 3 months interest (maybe $50), and invest the money somewhere.


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I understand what you are saying, but I just can't put this money into the market. Since I am not ever going to spend this money I may consider 10 year CDs if they would ever climb a few basis points higher.


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Old 09-03-2014, 04:38 PM   #47
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We put $10,000 into Ibonds several years ago as sort of an emergency fund. The problem is the money doesn't grow.

Made me realize that having money sitting idle like this bothers me more than the risk of an emergency or market downturn.

Going to close the account, lose the 3 months interest (maybe $50), and invest the money somewhere.
I haven't taken time to calculate a rate of return for my I-Bonds but I'm happy to know that it does increase in value, albeit quite slowly. For instance, over the past 10 years or so I've contributed a total of $37,125 and it's grown to a value of $51,376. DW has a similar amount.

Different strokes for different folks... but for us it's good to have cash on hand for situations that come up periodically. Keep in mind we have very little cash compared to many "retirees" - a quick back of the envelope calculation indicates our total cash (including cash in savings accounts, brokerage accounts, I-Bonds) is on the order of 6%. I-Bonds work well for us and I suspect for many people they are unknown/overlooked.
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Old 09-03-2014, 04:48 PM   #48
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We put $10,000 into Ibonds several years ago as sort of an emergency fund. The problem is the money doesn't grow. Made me realize that having money sitting idle like this bothers me more than the risk of an emergency or market downturn. Going to close the account, lose the 3 months interest (maybe $50), and invest the money somewhere. Sent from my iPhone using Early Retirement Forum
This is just asset allocation. Going into ER I became more conservative with my fixed income. I think it's important to have enough in vehicles that preserve principal for you to ride out severe market downturns, so cash, I Bonds, CDs and stable value funds take on added significance.
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Old 09-03-2014, 04:56 PM   #49
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Re: Returns on I Bonds. Maybe I was too obscure

Quote:
We started in 2001... with the max. (at that time $60K/person)
Current per $10K to 2014

10000 2001
13452 Inflation
16387 DJIA
21736 Ibond
this was a comparison of a $10,000 bond bought in 2001, when the base rate was 3.4%
Compared to CPI inflation from 2001 to 2014... $13,452
Compared to the DJIA $10,000 in 2001 equals $16287 today
The I Bond is now worth $21736.

Who do ya trust?
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Old 09-03-2014, 05:31 PM   #50
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Re: Returns on I Bonds. Maybe I was too obscure

Quote:
We started in 2001... with the max. (at that time $60K/person)
Current per $10K to 2014

10000 2001
13452 Inflation
16387 DJIA
21736 Ibond
this was a comparison of a $10,000 bond bought in 2001, when the base rate was 3.4%
Compared to CPI inflation from 2001 to 2014... $13,452
Compared to the DJIA $10,000 in 2001 equals $16287 today
The I Bond is now worth $21736.

Who do ya trust?
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Old 09-03-2014, 05:32 PM   #51
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Re: Returns on I Bonds. Maybe I was too obscure







this was a comparison of a $10,000 bond bought in 2001, when the base rate was 3.4%

Compared to CPI inflation from 2001 to 2014... $13,452

Compared to the DJIA $10,000 in 2001 equals $16287 today

The I Bond is now worth $21736.



Who do ya trust?

No doubt I would love your 3.4% fixed I Bonds. Are you including all the dividends from the Dow the past 13 years though in your calculation? If not I imagine that would change it by a decent amount.


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Old 09-03-2014, 05:49 PM   #52
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No doubt I would love your 3.4% fixed I Bonds. Are you including all the dividends from the Dow the past 13 years though in your calculation? If not I imagine that would change it by a decent amount.


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Point well made... no,
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Old 09-03-2014, 05:57 PM   #53
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Point well made... no,

Just curious, not trying to be Mr. Know It All. Besides probably like you, the money I have in IBonds would never have been in the stock market anyways.


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Old 09-04-2014, 03:25 PM   #54
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We put $10,000 into Ibonds several years ago as sort of an emergency fund. The problem is the money doesn't grow.

Made me realize that having money sitting idle like this bothers me more than the risk of an emergency or market downturn.
since mid-2011 - 2.26% annualized
since early-2012 - 1.87% annualized
since early-2013 - 1.49% annualized
since early-2014 - 1.71% annualized (includes 0.2% fixed)

These investments are guaranteed and the interest may be tax-deferred at your option (Federal only - no state tax is imposed). To me, they fit the need for an emergency fund.
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Old 09-06-2014, 11:12 AM   #55
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Have you ever redeemed an ibond? Is it a simple process?
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Yes also on the partial redemptions. I think Nords has done this.
How easy to redeem? If from the bank where you originally bought - easy. Otherwise a medallion signature may be required.
If the question refers to using TreasuryDirect to redeem electronic bonds then it's simple. Tedious but simple.

If you're asking about paper... especially paper purchased through an employer's payroll deduction bond-buying program... ouch. Do yourself a favor and convert them to an electronic bond, then redeem them that way. The advantages outweigh the hypothetical downsides. Converting may be a time hassle, but it's less time (and lots less hassle) than finding a friendly bank to redeem them for you.

We had EE and I bonds for our daughter's college fund. We cashed those out for her college expenses as soon as we could, and now our TreasuryDirect accounts are empty. We have no intention of ever buying any more bonds, let alone EE or I bonds. My federal pension is the gold-plated equivalent of TIPS or I bonds and we don't need more of that in our asset allocation.
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Old 10-27-2014, 12:51 PM   #56
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Just went to treasury direct to see what the fixed portion of I bond rates will be November 1. I couldn't find anything. I recall some posters purchasing I bonds at the very end on April because the fixed rate was less favorable beginning in May.

Where do you find the upcoming fixed rate in time to make a buy now or buy later decision?


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Old 10-27-2014, 04:35 PM   #57
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Just went to treasury direct to see what the fixed portion of I bond rates will be November 1. I couldn't find anything. I recall some posters purchasing I bonds at the very end on April because the fixed rate was less favorable beginning in May.

Where do you find the upcoming fixed rate in time to make a buy now or buy later decision?


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It won't be released until the first of the month...Unofficially, the inflation component will be 1.48%. The fixed part isn't released until Nov. 1 I believe. Fixed has been 0%, .02%, and .01% the last 3 times. I would be willing to bet a significant amount of money it will one of those three.


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Old 10-27-2014, 04:48 PM   #58
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JWhere do you find the upcoming fixed rate in time to make a buy now or buy later decision?
As far as I know, the fixed rate adjustment is a secret which only officials in the Treasury Department know until it is made public at the beginning of November. It's the variable rate that's available early, and it will be 1.47% (plus or minus .01%, depending on how the Treasury handles rounding). It's calculated to be twice the change in CPI as measured from March through September. That number is

2*(238.031-236.293)/236.293 = 1.47%

The new variable rate will be 0.37% lower than the current variable rate of 1.84%. You can still get the higher 1.84% variable rate +0.1% fixed rate for six months if you purchase by the end of October. This is what I would advise, rather than waiting until November and hoping for an increase in the fixed rate. Even if the fixed rate does go up, it's not likely to be a large enough increase to fully compensate for the lower variable rate.
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Old 10-27-2014, 05:20 PM   #59
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Thanks Mulligan and Karluk


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Old 10-27-2014, 05:34 PM   #60
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Thanks Mulligan and Karluk


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FIY, I agree with Karluk. I already purchased my allowed limit for the year, but if I hadn't I would buy now. As you know, IBonds are not the quickest way to instant wealth, but it serves a purpose for me....To get the money out of my sight so I'm not trying to buy a stock with it.


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