I love my i-bonds. But did read a post by someone disappointed when they didn't get the November rate on their tax refund bonds. I almost sold mine when they went to zero interest (deflation), for one or maybe two periods, but glad I held on!
The I Bond Thread
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I love my i-bonds. But did read a post by someone disappointed when they didn't get the November rate on their tax refund bonds. I almost sold mine when they went to zero interest (deflation), for one or maybe two periods, but glad I held on!
Dash man
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What month was the tax refund bond issued? The rates update every six months from the issue month. So if the bond was issued in April, it updated in October for the rate effective last May. It will update with this November rate in April 2022.
I'm not doing the tax refund method myself, but sounds like people are hoping to get Nov rate when filing taxes in 2022 and it might not work out:
Originally Posted by Dimsumkid View Post
Yes, you get paper bonds. I was in the same situation last yr. I got the max $5k bonds thru tax return using Turbotax. It was kind of a headache to get Turbotax to allow me to pay the extra needed on my return to get to $5k. I had to fill out an extension, even though I filed on time and had to move the numbers around to force the payment. The I bonds were at the new, lower rate (May 2012) which was disappointing and they sent me as many small denomination bonds as possible in multiple mailings too.
Retire2023
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Newbie I-Bond investor question: The site states that the rate changes twice per year. Is that rate good for what is purchased during that 6 month window, and that rate applies to that purchase until cashed out, or does the rate on a November 2021 purchase ride the 6 months changes up or down along the way?
LarryMelman
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This has been explained so many times, but not in this thread apparently. We really need a sticky thread explaining how I-bonds work. Take a look here:
https://www.early-retirement.org/forums/f28/i-bond-rate-5-2021-a-109136-2.html#post2602957
https://www.early-retirement.org/forums/f28/i-bond-rate-5-2021-a-109136-2.html#post2602957
Dash man
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I Bond rate 11/2021
The iBond rates change every Nov 1 and May 1. Your individual iBonds adjust every six months on the six month and yearly anniversary month of the original purchase.
The iBond rates change every Nov 1 and May 1. Your individual iBonds adjust every six months on the six month and yearly anniversary month of the original purchase.
Retire2023
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Thanks for the confirmation!
misanman
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How is the fixed rate component determined?
Mulligan
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They have never expressed that, nor will they. Though its been zero most of the time for well over a decade now.
https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm#fixed
retired1
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Dash man
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Treasury Direct has updated their website to prevent this now. [emoji17]
I was able to do this in 2017 successfully and still have the iBonds. This year they took the money and issued the bond, but I was notified this morning they are redeeming the joint iBond and returning the funds.
I apologize if I misled anyone.
Sunset
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Are they giving you the interest ?
Dash man
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Sunset
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I had interpreted your post to mean that they were redeeming everything from 2017 onwards, as the joint account is not valid.
But it seems they are letting the old bonds in the joint account (not valid account) remain and just stop the buying of new ones.
Pretty decent of them.
Dash man
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I had interpreted your post to mean that they were redeeming everything from 2017 onwards, as the joint account is not valid.
But it seems they are letting the old bonds in the joint account (not valid account) remain and just stop the buying of new ones.
Pretty decent of them.
They’re only redeeming the most recent extra purchase. The $10k bonds from 2017 remains. 2017 is the only other time I tried this. But they’ve improved their website since then, so no more bending the rules. I’ll just have to wait for January to buy it back.
OP
OP
steelyman
Moderator Emeritus
I got my entity account (trust) signature verification done at the credit union on Friday. They used a medallion signature guarantee which seems overkill to me but they see a lot more in their business than I do.
It was dropped in the mailbox and picked up yesterday. I’ll be curious to see how long the process takes. I’d like to be able to use the account in 2021 but it’s not a disaster if it takes longer.
It was dropped in the mailbox and picked up yesterday. I’ll be curious to see how long the process takes. I’d like to be able to use the account in 2021 but it’s not a disaster if it takes longer.
Wow, I am trying to learn and am reading through. Your post is so supportive and thoughtful. </s>
steelyman, FYI, it took just under 3 weeks from the time they received my mailed medallion signature document Nov. 5th and I got the notice yesterday it was setup Nov. 24th. I submitted my $10k purchase yesterday to be completed tomorrow.
Sent from my SM-G955U using Early Retirement Forum mobile app
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steelyman
Moderator Emeritus
Fantastic - the Treasury is alive! I may be able to squeak in by year end. Thanks for posting.
newbie question
I've never purchased a treasury bond and I want to make sure I understand the terms. My questions are:
Can the rate of 7.12% change for an I bond I purchase (I'm confused because it's set twice a year - is that only for new bonds)?
Does the 3 month penalty only apply if I cash out before 5 years?
Is the original investment taxable or only the interest (I'm guessing that it's only the interest but I want to be double sure)?
Thank you!
I've never purchased a treasury bond and I want to make sure I understand the terms. My questions are:
Can the rate of 7.12% change for an I bond I purchase (I'm confused because it's set twice a year - is that only for new bonds)?
Does the 3 month penalty only apply if I cash out before 5 years?
Is the original investment taxable or only the interest (I'm guessing that it's only the interest but I want to be double sure)?
Thank you!
Sunset
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Interest is set every 6 months, and affects all the I-bonds, new and old. So the 7.12% will change (but I think it will still be above 2%, however if it's only 1%, I win compared to my bank.)
The 3 month penalty (loss if interest) only applies if cash out before 5 years, after that no penalty.
The interest is taxable ONLY at the Federal level, no tax for States, original investment is not as it is principle.
I personally think it's a great investment , compared to my bank account. And will be buying another $10K per person in January. And forcing a $5K tax refund purchase too
Maybe in 2 or 3 or 4 yrs the interest won't be great, so then I might cash out (note at low interest rate times, the penalty is small too). After the 2->4 years, I will have earned a lot more interest than a comparative bank account. I am comparing to Ally bank that pays 0.65% for 3 year CD which has a penalty for early withdrawals.
Dash man
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
In addition to what Sunset said, the interest rates on the individual iBonds update every six months based on the anniversary of their purchase month. So a bond that was previously purchased in the month of March will adjust to the November rate in March, and the May rate in September.
Sorry if this has been asked before, but...
I'm new to I bonds and having just purchased 20k, I am wondering if there is a special selection on treasury direct to indicate that I wish to defer taxes on all interest until the bond is redeemed or is that just assumed by the irs?
I'm new to I bonds and having just purchased 20k, I am wondering if there is a special selection on treasury direct to indicate that I wish to defer taxes on all interest until the bond is redeemed or is that just assumed by the irs?
