The I Bond Thread

[ripper1]

Ibond repurchase

I purchased IBonds on 1-26-22. I am a bit confused about new calendar year. Does this mean I can buy again on 1-1-23 or after 1-26-23.

 

[Gumby]

I purchased IBonds on 1-26-22. I am a bit confused about new calendar year. Does this mean I can buy again on 1-1-23 or after 1-26-23.

The limit is per calendar year. And, not that it is controlling, but the I bonds you bought on 1/26/22 were considered issued on 1/1/22 and bear interest from that date.

 

[jldavid47]

With the fixed rate at 0.4% and the inflation at 6-7%, you still lose big after taxes.

Sorry to be the party pooper.

It doesn't really matter how they do relative to inflation (after tax). What matters is the relative performance vs other alternatives and right now I bonds are a big winner in that department.

 

[Chuckanut]

It doesn't really matter how they do relative to inflation (after tax). What matters is the relative performance vs other alternatives and right now I bonds are a big winner in that department.

+1

Never let the perfect become the enemy of the good.

 

[audreyh1]

I find the new 0.4% fixed rate for I-bonds interesting. Why now? It's not like they have stacks of the things rotting in some warehouse because nobody is buying them.

0.4% fixed rate eh? They rarely go above 0% last decade or so. Hmmmmm…

I usually only buy IBonds when there is a non-zero fixed rate component.

 

[DaveLeeNC]

It is very interesting that there was this huge rush to beat the 10/2022 deadline. And now it would seem that unless your Ibond horizon is pretty short, purchasing on 11/1/2022 would seem to be a better choice vs. 10/31/2022. I do not recall anybody speculating on that outcome. FWIW, it looks like it takes around 4 years for the November purchase value to surpass the October purchase value (it does vary with the inflation curve, whatever that turns out to be).

dave

 

[NW-Bound]

Yes, but in these times, losing less is winning

It doesn't really matter how they do relative to inflation (after tax). What matters is the relative performance vs other alternatives and right now I bonds are a big winner in that department.

+1

Never let the perfect become the enemy of the good.

Yes, yes, I know, I know. Things look bleak now. We have to go with what we are given.


"Beggars can't be choosers".

 

[CuriousJoe]

The limit is per calendar year. And, not that it is controlling, but the I bonds you bought on 1/26/22 were considered issued on 1/1/22 and bear interest from that date.

So, for my clarity: If I purchased the I Bond (maximum allowed limit) during any time in 2022, I can again purchase on Jan 1, 2023 ?

 

[audreyh1]

Yes, exactly.

You can double up on this 0.4% fixed rate issue if you want since it straddles the calendar year.

 

[CuriousJoe]

Thank you

 

[MJ]

I don't see where this has been asked. I just went on TD and checked my ibond rate and all the ones I bought in April and October in previous years show 9.62%. Is this because I bought them the month before the rate change in May and November or TD has not updated the site yet?

 

[audreyh1]

Yes - your rate extends for 6 months from your purchase month, so unless you bought in November or May you wouldn’t show or get the new rate yet. But you will get it for 6 months once you reach your purchase month, or purchase month+6 whichever occurs first.

 

[Dash man]

I don't see where this has been asked. I just went on TD and checked my ibond rate and all the ones I bought in April and October in previous years show 9.62%. Is this because I bought them 1 month before the rate change in May and November or TD has not updated the site yet?

All iBonds update the rates every six months after the iBonds we’re purchased. If bought in April or October in previous years, they would have recently updated as of October 1 to the 9.62% rate. The next update will be April 1.

 

[bookman51]

Just to catch folks up todate, last May I attempted to purchase some Series I bonds and gift them ahead. I did it incorrectly and got a message that the amount exceeded the $10,000 allowed for annual purchases, and it would take up to 13 weeks to refund the money. I tried calling but the wait time was over two hours. I waited the 13 weeks and then started writing letters, but no response.

Well, Wednesday I was able to get through after a 90 minute wait. Seems the bonds are drawing interest at the 9.62% and just went to lower rate. The person asked me if i wanted to keep the money as Series I bonds, and I said yes. So what I have to do is go in after the start of the new year and gift them as I planned. I guess all is well that ends well. Apparantly there is no penalty for purchasing more than the $10,000 since I have been drawing interest since the purchase in May. Of course, I think if they woulld have been gifted as intended back then, they would have drawn interest too. The person was quite pleasant, but I will admit I had to bite my tongue. Five months of calling, writing letters, and then waiting 90 minutes for someone to answer is not my idea of good service, but it did end well, and I have to realize it is not the fault of the person to whom I was talking. Nuf Sed

 

[MJ]

Thanks Audrey and Dash!

 

[audreyh1]

0.4% fixed rate eh? They rarely go above 0% last decade or so. Hmmmmm…

I usually only buy IBonds when there is a non-zero fixed rate component.

OK, bought another set for me and DH.

 

[steelyman]

I’ve scheduled an I bond purchase for the first week of January (hit the limit for 2022). You never know what will happen to the fixed rate component in May. Or the variable component for that matter.

 

[audreyh1]

Haven’t decided if we are going to buy again in 2023 or not. If we do it will be early in the year.

 

[Dash man]

Haven’t decided if we are going to buy again in 2023 or not. If we do it will be early in the year.

Neither have we. After monetary gifts to the kids, a quarterly condo fee, our LTC annual payment and a quarterly Federal tax payment through EFTPS coming this week, I’m giving my checking account a break.

 

[Sunset]

I was wondering if 5 year TIPs are better at 1.5% than I-bonds, I guess I just re-evaluate as the new rate shows up.

I was thinking of cashing in my 0% I-bond and replacing it with a TIP paying more than 0% not sure as it's all taxable account money.

 

[audreyh1]

I was wondering if 5 year TIPs are better at 1.5% than I-bonds, I guess I just re-evaluate as the new rate shows up.

I was thinking of cashing in my 0% I-bond and replacing it with a TIP paying more than 0% not sure as it's all taxable account money.

Well an IBond is a more flexible instrument as well as being longer term (30 years) and essentially without interest rate risk as you can partially (or fully) withdraw funds penalty free after 5 years, and 3 months interest after 1 year.

Due to the low annual purchase maximum in IBonds seems like you can do both. I generally don’t buy IBonds every year. Only when the fixed rate is higher than normal which interestingly seems to occur whenever interest rates are higher.

Yes, I’ve “upgraded” my IBonds occasionally and no longer have any 0% fixed rate ones.

 

[flyingaway]

The fixed part of the I bond interest does not change once purchased? I didn't know that.
Just bought my first I bond last month.

 

[audreyh1]

The fixed part of the I bond interest does not change once purchased? I didn't know that.
Just bought my first I bond last month.

That’s correct. Once purchased the fixed rate stays fixed for the life of the bond. Only the inflation rate changes every 6 months.

 

[jazz4cash]

I was excited about buying an ibond at the current rate in 2023 as a part of my fixed income allocation. Now I am having second thoughts as I realize in reality I am just continuing to save and maybe now that I am retired I should STOP SAVING. Old habits and all.

 

[audreyh1]

I was excited about buying an ibond at the current rate in 2023 as a part of my fixed income allocation. Now I am having second thoughts as I realize in reality I am just continuing to save and maybe now that I am retired I should STOP SAVING. Old habits and all.

I treat them as part of my cash allocation as they are quite liquid after 1 year.

I have plenty in money market funds and short-term t-bills. Plus some in high yield savings and short-term CDs.