The I Bond Thread

[pb4uski]

^^^ Only if you think that the rate that will be announced in November 2022 will be more than 7.12%... I'm not so sure it will be and 7.12% in the hand is better than whatever is in the bush to me, so I bought now.

 

[MissMolly]

So, is it better to wait for May 1st

Not in my opinion. You aren't going to lose out on the 9.62% either way. BUT, you know you will also get 7.12% for 6 months if you buy now. Then 9.62% for 6 months. After that, who knows? Could higher, could be lower. But buying now guarantees you 7.12% and 9.62%. Where you can you beat that on a guaranteed investment?

 

[Magus]

So, is it better to wait for May 1st

IMO no - at some point that 7.12% will be higher than inflation and you'll have wanted it (and its way higher than any fixed income today) - and you'll still get the 9.62% for 6 months plus whatever is next for 6 months. So by waiting, you'd effectively be saying you have a better return than 7.12% for fixed income today. Awesome if you do!

Plus, you'll get credit for the entire month of April for interest even though less than half a month - that pushes the effective yield higher than 7.12%.

So if you have the cash, I'd say do it before the end of April.

 

[Dash man]

So, is it better to wait for May 1st

There’s no benefit to delaying. The interest on the iBond will reset on every six month anniversary of your purchase month, to the latest interest rate announced on the previous May 1 and Nov 1 each year.

 

[Mulligan]

IMO no - at some point that 7.12% will be higher than inflation and you'll have wanted it (and its way higher than any fixed income today) - and you'll still get the 9.62% for 6 months plus whatever is next for 6 months. So by waiting, you'd effectively be saying you have a better return than 7.12% for fixed income today. Awesome if you do!



Plus, you'll get credit for the entire month of April for interest even though less than half a month - that pushes the effective yield higher than 7.12%.



So if you have the cash, I'd say do it before the end of April.

That is all there is to know. This isnt a growth stock. 7.12% alone is a reason to buy. Think of it as a 6 month extension from delaying withdrawal as it will hit a point where it will be less than a CD. That is the way it will likely pan out without a fixed component attached. I was in IBonds for about 3 years about 10 years ago. And even if inflation stays 7% forever its still a good buy.
I would gladly take a substantial bet the 5 year average yield of IBonds going forward will be less than 7.12%.

 

[copyright1997reloaded]

This thread made me go look at my Savings Bond inventory and update pricing info. I have i Bonds that are now yielding over 10%(10.85 % is highest - issued 4/2000 to 10/200).

 

[disneysteve]

This thread made me go look at my Savings Bond inventory and update pricing info. I have i Bonds that are now yielding over 10%(10.85 % is highest - issued 4/2000 to 10/200).

Our were all purchased in 2003 and are currently paying either 8.26% or 8.78%.

 

[cyber888]

Not in my opinion. You aren't going to lose out on the 9.62% either way. BUT, you know you will also get 7.12% for 6 months if you buy now. Then 9.62% for 6 months. After that, who knows? Could higher, could be lower. But buying now guarantees you 7.12% and 9.62%. Where you can you beat that on a guaranteed investment?

Thanks! That's a lock

 

[cyber888]

Not in my opinion. You aren't going to lose out on the 9.62% either way. BUT, you know you will also get 7.12% for 6 months if you buy now. Then 9.62% for 6 months. After that, who knows? Could higher, could be lower. But buying now guarantees you 7.12% and 9.62%. Where you can you beat that on a guaranteed investment?

Alright I opened an account ... Now, is this the correct choice. I'm attaching the pic

 

[Sunset]

Alright I opened an account ... Now, is this the correct choice. I'm attaching the pic

The treasurydirect site has 2 minute videos of how to do lots of things, including buying bonds and gifts etc...

I watched the video a few times to make sure I had it correct.

Your picture does not show a registrant (owner) and when you make an owner, think ahead about the beneficiary so you can add them too.

 

[cyber888]

The treasurydirect site has 2 minute videos of how to do lots of things, including buying bonds and gifts etc...

I watched the video a few times to make sure I had it correct.

Your picture does not show a registrant (owner) and when you make an owner, think ahead about the beneficiary so you can add them too.

So after I add my name (Registrant) and I want a Beneficiary (like spouse), I do a 2nd Registrant ?

 

[Sunset]

I added a beneficiary after I bought the I-bond and it was in my account, a couple of days later.
This page details how to do it.
https://www.treasurydirect.gov/indiv/help/TDHelp/howdoi.htm#addsecondary

 

[Love This Community]

Alright I opened an account ... Now, is this the correct choice. I'm attaching the pic

Once you register, I believe that’s the selection you choose to purchase the I bonds. Would love to get confirmation from others that picked the right selection from the myriad of radio buttons.

 

[cyber888]

Once you register, I believe that’s the selection you choose to purchase the I bonds. Would love to get confirmation from others that picked the right selection from the myriad of radio buttons.

I did it - bought $10,000 and they said it takes 1 day to close the transaction.


By the way, do you pay taxes only after you withdraw it ?

 

[Sunset]

I did it - bought $10,000 and they said it takes 1 day to close the transaction.

By the way, do you pay taxes only after you withdraw it ?

You have a choice, no tax until you cash in the bond or pay every year on the earned interest. Whichever choice you make, you are then stuck with that decision.

I'm going to pay tax when we redeem the bonds because it's simpler.

 

[aja8888]

Originally Posted by jazz4cash

Im impressed by how many members here have young wives. I don’t ever recall anyone having an old wife or a young husband for that matter.

I am in the group with a "young wife" also as my current DW is 2 years younger than me. Come to think of it, my previous wives were also younger than me.

 

[stepford]

I'm 10 months older than my wife. When I was first introduced to her Mom I was just over 30 and I remember Mom-in-law-to-be saying, "Oh, he's much much older than you, dear". That's been a running gag with us for over 30 years.

 

[Dtail]

I am in the group with a "young wife" also as my current DW is 2 years younger than me. Come to think of it, my previous wives were also younger than me.

My DGF is 15 months younger than me. Practically robbed the cradle.

 

[Chuckanut]

Interestingly, I just found an I-bond from 2003 that I had forgotten about. The good news is it's one of the 3% base bonds. The bad news is the bond is only a $100 bond. Oh well, live and learn.

 

[Dash man]

Interestingly, I just found an I-bond from 2003 that I had forgotten about. The good news is it's one of the 3% base bonds. The bad news is the bond is only a $100 bond. Oh well, live and learn.

I have a ton of $100 iBonds dating back to 3/2000 when I had a payroll deduction set up. I converted them years ago to electronic bonds. Some of them are paying over 10% now. Every little bit helps!

 

[wmc1000]

Just added gift I bond purchases for DW and myself for 2023 in addition to our regular I bond 2022 purchases. Thanks to everyone for the information on these bonds.

Even though my mind says it should be a no brainer to also do gifts for 2024 my risk averse self will most likely keep me waiting until 1-1-23 to do that even though I would be giving up the current higher rates.

 

[Gumby]

Just added gift I bond purchases for DW and myself for 2023 in addition to our regular I bond 2022 purchases. Thanks to everyone for the information on these bonds.

Even though my mind says it should be a no brainer to also do gifts for 2024 my risk averse self will most likely keep me waiting until 1-1-23 to do that even though I would be giving up the current higher rates.

Just remember that if you deliver the gift bonds to each other in 2023, you won't also be able to buy bonds for yourselves in 2023 (assuming you bought $10k in gift bonds each)

 

[pb4uski]

^^^ Yes, with the gift strategy one is effectively just pre-buying future annual i-bond buying capacity for the gift recipient. You get todays great rates, a leg up on the one year minimum holding period and a leg up on the 5 year period needed to avoid the 3-month of interest early withdrawal penalty.

DW and I have $30k sitting in gift boxes for each other representing our 2023, 2024 and 2025 buying capacity.

 

[cyber888]

You have a choice, no tax until you cash in the bond or pay every year on the earned interest. Whichever choice you make, you are then stuck with that decision.

I'm going to pay tax when we redeem the bonds because it's simpler.

I have a question for you or anyone.

Right now - When I click 'Redemption', I don't see my I Bill under Redemption.

So, the question is, will my iBond only appear under "Redemption" after 12 months ? Essentially, you cannot take anything out in less than 12 months, correct?

 

[REWahoo]

Look up the financial definition of redemption and you'll have your answer.