The I Bond Thread

[Rianne]

Quote:

Originally Posted by cj1717 Just checked out of curiosity. I have some I bought in 2001 that are paying 10.23%.

Really! Are you sure? We bought 10 I bonds over a 5-year period in the early 2000s. They're sitting in a lockbox at the bank. We're not touching them. I use the treasury direct every so often to check interest rates. I did not see 10.23%. Maybe I should check again.

[Sunset]

Quote:

Originally Posted by Rianne Really! Are you sure? We bought 10 I bonds over a 5-year period in the early 2000s. They're sitting in a lockbox at the bank. We're not touching them. I use the treasury direct every so often to check interest rates. I did not see 10.23%. Maybe I should check again.

It would be base rate + inflation rate (was 7.12%)
So if your base rate on a bond is 3%, then you are getting over 10%.
It would need to be the very EARLY 2000's :

Past rates:
November 1, 2007 1.20%
May 1, 2007 1.30%
November 1, 2006 1.40%
May 1, 2006 1.40%
November 1, 2005 1.00%
May 1, 2005 1.20%
November 1, 2004 1.00%
May 1, 2004 1.00%
November 1, 2003 1.10%
May 1, 2003 1.10%
November 1, 2002 1.60%
May 1, 2002 2.00%
November 1, 2001 2.00%
May 1, 2001 3.00%
November 1, 2000 3.40%
May 1, 2000 3.60%
November 1, 1999 3.40%
May 1, 1999 3.30%
November 1, 1998 3.30%
September 1, 1998 3.40%

[copyright1997reloaded]

Quote:

Originally Posted by Sunset It would be base rate + inflation rate (was 7.12%) So if your base rate on a bond is 3%, then you are getting over 10%. It would need to be the very EARLY 2000's : Past rates: May 1, 2001 3.00% November 1, 2000 3.40% May 1, 2000 3.60% November 1, 1999 3.40% May 1, 1999 3.30% November 1, 1998 3.30% September 1, 1998 3.40%

Yes, these were good times to be buying these. I also talked a friend into buying a good bunch of TIPS with nearly a 4% base rate.

[cyber888]

The 9.62% rate is now officially posted on the website:

https://www.treasurydirect.gov/indiv...nds_glance.htm

[Sojourner]

I just bought my very first I-bond ever... at the new 9.62% rate!

Next step, get DW signed up at TreasuryDirect and buy another $10k bond to max out our yearly allocation.

EDIT TO ADD: I just read about how an additional $10k is allowed for a business account, so I guess I'll actually be able to do $30k/year once I open an account for my sole proprietor biz. Sweet! Hopefully it won't be a problem that I'm making less than $1k/year through that business nowadays.

[Dash man]

I have two iBonds that are now over 11%.

11-02-2002 11.3%
05-01-2006 11.09%

[misanman]

I tried earlier today to log into TD but it was "down for maintenance". I just successfully logged in and I'm seeing something strange. I have bonds issued in Nov, 2021, Dec, 2021, Jan, 2022, and Feb, 2022. The interest rate listed for the November bonds is 9.62%. The interest rate listed for the Dec, Jan, and Feb bonds is listed as 7.12%

Has anyone else seen this? I don't have an explanation. Maybe they let a junior programmer update the site.

[jldavid47]

Quote:

Originally Posted by misanman I tried earlier today to log into TD but it was "down for maintenance". I just successfully logged in and I'm seeing something strange. I have bonds issued in Nov, 2021, Dec, 2021, Jan, 2022, and Feb, 2022. The interest rate listed for the November bonds is 9.62%. The interest rate listed for the Dec, Jan, and Feb bonds is listed as 7.12% Has anyone else seen this? I don't have an explanation. Maybe they let a junior programmer update the site.

You earn the original interest rate for 6 months, then the next interest rate for 6 months, and so on. The bonds issued in Nov 2021 finished their first 6 months in April, so for May it will show the 9.62% rate. The others are not yet 6 months old so will show the original 7.12% rate. Next month the bonds issued Dec 2021 should show a 9.62% rate. The others should show it in July and August, respectively.

https://www.treasurydirect.gov/indiv...rms.htm#change

[pb4uski]

I did a couple calculations for a relative of the minimum IRR if you buy an ibond on 5/1/2022, get the 9.62% for 6 months and nothing thereafter and redeem on 5/1/23 or 1/1/24 and the yields were 4.70% and 2.79%, respectively.

4.70% for 12 months is great, and 2.79% for 20 months is not too shabby.

Now realistically, I think the yields for a 12 month and 20 month hold will be better than those numbers, but those are the minimum yields.

2023 Delivery			2024 Delivery
XIRR	4.70%		XIRR	2.79%
05/01/22	-10,000		05/01/22	-10,000
05/01/23	10,470		01/01/24	10,470
12	months		20	months

[Dash man]

Quote:

Originally Posted by misanman; I tried earlier today to log into TD but it was "down for maintenance". I just successfully logged in and I'm seeing something strange. I have bonds issued in Nov, 2021, Dec, 2021, Jan, 2022, and Feb, 2022. The interest rate listed for the November bonds is 9.62%. The interest rate listed for the Dec, Jan, and Feb bonds is listed as 7.12% Has anyone else seen this? I don't have an explanation. Maybe they let a junior programmer update the site.

They update on every six month anniversary of your purchase month, always on the first of the month.

[Gumby]

Let me try to restate things to be more understandable. Every May 1 and November 1, the Treasury sets the interest rate at which I-Bonds will be sold for the next 6 months. If you buy an I-Bond during that period, you get that rate for six full months. This applies whether you buy the I-Bond in the first month of the rate period or the sixth month. So if you buy an I-bond in May 2022, you get an APR of 9.62% until November 1, 2022. If you buy an I-Bond in June 2022, you get an APR of 9.62% until December 1, 2022. If you buy an I-Bond in July 2022, you get an APR of 9.62% until January 1, 2023. And so on and so forth.

[Katoslake]

Can these be purchased in an IRA ?

[Gumby]

Quote:

Originally Posted by Katoslake Can these be purchased in an IRA ?

My understanding is that they cannot be purchased in an IRA.

[jollystomper]

I get a pleasant feeling seeing the $10K in I-Bonds I bought a year ago has earned (even after deducting the 3 month penalty) $356. Whereas had I left that money in my savings or money market accounts, it would have earned about $40.

[homestead]

So does the 3 month penalty get added back in after 5 years?

[jollystomper]

Quote:

Originally Posted by homestead So does the 3 month penalty get added back in after 5 years?

Yes, that is how I understand it. The Treasury Direct display amount will show the full interest earned.

[pb4uski]

Quote:

Originally Posted by Gumby Let me try to restate things to be more understandable. Every May 1 and November 1, the Treasury sets the interest rate at which I-Bonds will be sold for the next 6 months. If you buy an I-Bond during that period, you get that rate for six full months. This applies whether you buy the I-Bond in the first month of the rate period or the sixth month. So if you buy an I-bond in May 2022, you get an APR of 9.62% until November 1, 2022. If you buy an I-Bond in June 2022, you get an APR of 9.62% until December 1, 2022. If you buy an I-Bond in July 2022, you get an APR of 9.62% until January 1, 2023. And so on and so forth.

Yes, you get the current rate for the first 6 months of ownership, then next declared rate for the second 6 months of ownership, etc.

[Sunset]

Quote:

Originally Posted by Sunset I got our tiny IRS refund deposited to the bank account yesterday, so now I wonder if the $5K in I-bonds will be dated this month I made our tax return refund $5,009.00 , so that $5,000 would be in I-bonds and $9.00 would go to the bank account, thereby letting me know when the return had processed. Now we have something to look forward to in the mailbox over the next week or two

We got our paper I-bond, it's a single $5,000 bond which is nice. Best of all it's Bond Date (top date) is for April. Means we get the 7.12% and then the 9.62% during the next 12 months !!

[Another Reader]

Is there a detailed set of instructions for buying in a revocable living trust? Do I open a new account in the name of the trust? Do I send in copies of the trust documents?

[Austin704]

Trying to decipher the I bond math... I understand interest is paid semiannually but is it also compounded semiannually or monthly?

In any case, perhaps someone could help me with the calculation. I bought a $10k I-Bond in November 2021. Six months of interest through April 2022 should be:

P*[1+(.0712/2)]=$10,356 or with monthly compounding
P*[1+(.0712/12)]^6=$10,361

However, what Treasury Direct shows is $10,236. I've read elsewhere that TD withholds 3 months' interest for the withdrawal penalty for holding less than 5 years but that would result in a value of $10,178 or something close depending on compounding.

What am I missing?