RetireAge50
Thinks s/he gets paid by the post
- Joined
- Aug 6, 2013
- Messages
- 1,660
Just sold all my ibonds. Done with treasury direct.
Thanks for the reminder.
What happens when you do sell, it the $$$ in your treasury direct account immediately ?
Just sold all my ibonds. Done with treasury direct.
I'm wondering am I reading this correctly. Since I will lose 3 months of interest when selling the I bond, is Oct 1 or Nov 1 the better time to sell a bond when the issue date is 01-01-2022 ?
https://eyebonds.info/ibonds/10000/ib_2022_01.html
<edit>
I've gone to Treasury Direct, and for the same bond it says the value is:
01-01-2022 3.38% $10,000.00 $11,208.00
So to me this looks like the value as of July 1, while earning 6.84% , meaning I should wait until Nov 1 to cash out so I only lose 3 months of low 3.38% interest
Unless of course Treasury Direct is just being slow to update their valuation ?
What do people think
I'm wondering am I reading this correctly. Since I will lose 3 months of interest when selling the I bond, is Oct 1 or Nov 1 the better time to sell a bond when the issue date is 01-01-2022 ?
https://eyebonds.info/ibonds/10000/ib_2022_01.html
<edit>
I've gone to Treasury Direct, and for the same bond it says the value is:
01-01-2022 3.38% $10,000.00 $11,208.00
So to me this looks like the value as of July 1, while earning 6.84% , meaning I should wait until Nov 1 to cash out so I only lose 3 months of low 3.38% interest
Unless of course Treasury Direct is just being slow to update their valuation ?
What do people think
I'm wondering am I reading this correctly. Since I will lose 3 months of interest when selling the I bond, is Oct 1 or Nov 1 the better time to sell a bond when the issue date is 01-01-2022 ?
https://eyebonds.info/ibonds/10000/ib_2022_01.html
<edit>
I've gone to Treasury Direct, and for the same bond it says the value is:
01-01-20223.38% $10,000.00$11,208.00
So to me this looks like the value as of July 1, while earning 6.84% , meaning I should wait until Nov 1 to cash out so I only lose 3 months of low 3.38% interest
Unless of course Treasury Direct is just being slow to update their valuation ?
What do people think
Treasury Direct shows the interest through the end of June, which was at 6.48%. It does not show interest for July, August or September, because you lose those months due to the fact that there is a last three month interest penalty if you hold for less than 5 years. You have exhausted your 6.48% interest. If you held until Nov 1, you would get one month of interest at 3.38% (the interest for July). I sold my 1/1/22 issue date I-Bond today, because I can put the money in something earning more than 3.38%
Just to clarify, you earn interest on an I-Bond for the month only if you hold it on the last day of a month. It is credited to your account the next day.
+1, I did the identical and it said the money will show up in my bank account on 10/3.Exactly. I sold my 1/1/22 I-Bond yesterday on October 1st.
While the 3.4% right now is low, I'm holding out at least a few more months to see what the next reset is. Based on the 4 months already in CPI, plus guesses for the next few, I am guessing the new reset will be 4.5%-5.0%. If that turns out to be true, I will likely just hold the I-bonds for another 6 months, because even though I can do a bit better with a MMF or other bond, the I-bonds are still a good hedge in case inflation takes off again. For example, if I am receiving a rate that is say 1% less than the market rate (of a MMF or alternative bond) for 6 months, that's a pretty cheap insurance premium to pay for the right to keep inflation protection on these I-bonds for awhile. Its challenging to get any significant money into I-bonds, but easy to take the money out. I like the deferred tax and compounding nature of the I-bonds. So, I'm letting them ride a bit longer until we see if inflation is really extinguished. In the 1970s inflation bounced up and down a few times over a long period of time. Don't know what will happen this time, but having some money in I-bonds (even at a slightly below market rate) seems like a cheap inflation hedge to me. Also, if the fixed portion moves up closer to TIPS rates starting November, I may add more I-bonds at that time (or redeem some old ones and buy new ones with the higher fixed rate). I just feel like there is lots of optionality and its a cheap hedge.
... I sold my 1/1/22 issue date I-Bond today, because I can put the money in something earning more than 3.38%...
While the 3.4% right now is low, I'm holding out at least a few more months to see what the next reset is. Based on the 4 months already in CPI, plus guesses for the next few, I am guessing the new reset will be 4.5%-5.0%. If that turns out to be true, I will likely just hold the I-bonds for another 6 months, because even though I can do a bit better with a MMF or other bond, the I-bonds are still a good hedge in case inflation takes off again. For example, if I am receiving a rate that is say 1% less than the market rate (of a MMF or alternative bond) for 6 months, that's a pretty cheap insurance premium to pay for the right to keep inflation protection on these I-bonds for awhile. Its challenging to get any significant money into I-bonds, but easy to take the money out. I like the deferred tax and compounding nature of the I-bonds. So, I'm letting them ride a bit longer until we see if inflation is really extinguished. In the 1970s inflation bounced up and down a few times over a long period of time. Don't know what will happen this time, but having some money in I-bonds (even at a slightly below market rate) seems like a cheap inflation hedge to me. Also, if the fixed portion moves up closer to TIPS rates starting November, I may add more I-bonds at that time (or redeem some old ones and buy new ones with the higher fixed rate). I just feel like there is lots of optionality and its a cheap hedge.
We're holding onto what we have bought, but not purchasing any more. What we own is only about 3% of our assets, not enough to worry about especially since we lose 3 months of interest if we sell.