I Bond rate at 2.2 % starting in May

[Mulligan]

With the CPI announced for March, the next 6 months will be 2.2% starting in May assuming fixed rate is 0% (according to another forum). Any I Bonds purchased prior to end of month is 3.06% for 6 months before changing to 2.2%. The first 4 months of the cycle had little change, with most of the CPI inflation occurring in the past 2 months.

 

[Alan]

Thanks for the heads-up

 

[Chuckanut]

Greek bonds are about 19% in comparison.

 

[Mulligan]

Greek bonds are about 19% in comparison.

Thats way too risky for me. I Bonds to me, are gloried short term CDs that pay a better rate and have no state income tax. This is as exotic as I get in the bond arena!

 

[JPatrick]

Looks like those of us who jumped in at the end of October can continue to ride another 6 months,,

 

[Chuckanut]

Thats way too risky for me.!

Me also. It was offered as a comparison, not a recommendation.

 

[FANOFJESUS]

I am new to I Bonds. Are their yearly taxes on I bonds if you do not sell them?

 

[brewer12345]

I am new to I Bonds. Are their yearly taxes on I bonds if you do not sell them?

Taxes are deferred until you cash them in.

 

[FANOFJESUS]

Thanks brewer. Can you buy 10k of I Bonds and 10k of EE bonds in the same year?

 

[Dreamer]

Thanks for posting this Mulligan.

 

[Mulligan]

Thanks for posting this Mulligan.

Your welcome Dreamer. You know I live a boring life when I track I Bond rates for entertainment! Rec, I believe you can buy 10k of both. However, I dont know the benefit of buying EE bonds and locking in at 0.60% interest, unless you are planning to hold the full 20 years and get your doubling of the principle which equals out somewhere in the neighborhood of a little over 3.5% if my memory serves me.

 

[FANOFJESUS]

Thanks Mulligan.

 

[Dimsumkid]

Can you buy 10k of I Bonds and 10k of EE bonds in the same year?

That's looks correct, plus you can buy another $5k (per SSN) in I Bonds using your Tax Refund.

Check out the chart for details:

Individual - I and EE Savings Bond Comparison

 

[FANOFJESUS]

So a total of 15k of I Bonds. I guess if you do not get a refund you could pay 5k in then you would get a 5k refund.

Thanks Dimsumkid.

 

[Dimsumkid]

So a total of 15k of I Bonds. I guess if you do not get a refund you could pay 5k in then you would get a 5k refund.

I saved this article discussing the forms needed to get the I bond using your tax return,IRS form 8888. If you owe, you can still get them using IRS form 4868 and making a payment.

Backdoor to Paper Savings Bonds

 

[JPatrick]

Question about interest forfeiture::
Cashing an I-Bond that is less than five years old results in a one quarter interest give back.
My question is this: Is the give back quarter the last quarter earned, or is it some percentage of the entire amount of interest earned during the life of the bond??

 

[jimbohoward69]

Question about interest forfeiture::
Cashing an I-Bond that is less than five years old results in a one quarter interest give back.
My question is this: Is the give back quarter the last quarter earned, or is it some percentage of the entire amount of interest earned during the life of the bond??

Taken from their website:

"If you redeem I Bonds before they’re five years old, you'll forfeit the three most recent months’ interest; at or after 5-years old, you won’t be penalized."


Individual - I Savings Bonds Rates & Terms

 

[JPatrick]

Taken from their website:

"If you redeem I Bonds before they’re five years old, you'll forfeit the three most recent months’ interest; at or after 5-years old, you won’t be penalized."


Individual - I Savings Bonds Rates & Terms

That's what I needed, thanks Jimbo.

 

[heirloom]

The EE bond will have a fixed rate of 3.5% from May thru Nov.
This rate has gone up, I wonder if the I bond will have a small fixed rate this time.

Individual - Series EE/E Savings Bond Rates

 

[amfox1]

The EE bond will have a fixed rate of 3.5% from May thru Nov.

That rate is an exploding rate, applicable only if the Series EE bond is held for 20 years. The rate during the period that ends April 30 is 0.60%.

 

[obgyn65]

I bought a 2.9%, 8-year CD a couple of weeks ago. Not sure if an I bond is a better choice or not, as I don't know enough about this financial product.

Any I Bonds purchased prior to end of month is 3.06% for 6 months before changing to 2.2%. The first 4 months of the cycle had little change, with most of the CPI inflation occurring in the past 2 months.

 

[CitizenK]

Taken from their website:

"If you redeem I Bonds before they’re five years old, you'll forfeit the three most recent months’ interest; at or after 5-years old, you won’t be penalized."


Individual - I Savings Bonds Rates & Terms

If you think you'll be cashing in prior to the full five year holding period, and may not need the whole 10K at once, consider purchasing I Bonds in smaller denominations. If you buy (5) 2K bonds or (10) 1K bonds, you would only pay the interest penalty on what you need to redeem. If you buy a single 10K bond you're stuck with the penalty on the full amount.

 

[JPatrick]

If you think you'll be cashing in prior to the full five year holding period, and may not need the whole 10K at once, consider purchasing I Bonds in smaller denominations. If you buy (5) 2K bonds or (10) 1K bonds, you would only pay the interest penalty on what you need to redeem. If you buy a single 10K bond you're stuck with the penalty on the full amount.

Good point..Might as well have flexibility--It's free..

 

[Mulligan]

I bought an 2.9%, 8-year CD a couple of weeks ago. Not sure if an I bond is a better choice or not, as I don't know enough about this financial product.

If you made a sizable CD deposit, they probably aren't comparable. Since you can only deposit 10k per year per person ( plus maybe a tax refund of 5k ) your 8 years might be up before you could get all the money into the I Bonds. I would hope inflation doesn't average more than 3% over that time, so they probably will be similar in return, except I Bonds are state income tax exempted and you can delay taxes by holding them 30 years. That is the main reason, I purchase them, along with the fact, that when I deposit money electronically into I Bonds or my Vanguard the money disappears to me so I don't have the itch to go spend it.

 

[Free To Canoe]

I saved this article discussing the forms needed to get the I bond using your tax return,IRS form 8888. If you owe, you can still get them using IRS form 4868 and making a payment.

Backdoor to Paper Savings Bonds

A new and interesting hoop to jump through.