The I Bond Thread

[single2019]

Chances of that happening are somewhere between zero to nil.

Eating Crow.
This was in response to increase in fixed component of the interest

 

[steelyman]

Having any fixed rate component at all is a great and welcome surprise. I’ve been buying since 2015 and all but two of those bonds sport a 0.0% fixed rate.

 

[euro]

Help me out on this for a moment.

Having purchased four I-bonds between DW and I in Oct, we will get the 6.48% when our bonds renew in April. Those who buy in November will get 0.4% over our renewal rate for 6 months and continue to get 0.4% more than us for the duration of our I-Bonds?

I'm not complaining (much). I'm just trying to confirm my understanding.

correct

 

[finnski1]

Help me out on this for a moment.

Having purchased four I-bonds between DW and I in Oct, we will get the 6.48% when our bonds renew in April. Those who buy in November will get 0.4% over our renewal rate for 6 months and continue to get 0.4% more than us et tgefor the duration of our I-Bonds?

I'm not complaining (much). I'm just trying to confirm my understanding.

correct but you can buy new ones in January for the 2023 year and get the .4% fixed on that at the new rate (6.89 total) I believe.

 

[jj]

correct but you can buy new ones in January for the 2023 year and get the .4% fixed on that at the new rate (6.89 total) I believe.

If you have the free cash now you could buy gift bonds for someone else which would have a 0.4% fixed rate and deliver them at some time in the future - you don't have to wait until next year to do that.

So many possibilities

 

[Sunset]

I wonder if the fixed rate is to make up for the outages/slowdowns that limited bond purchases in October ?

While I think the fixed rate is GREAT, it is surprising at first.

Then I realized it means maybe they feel they need to improve the appeal as people just bought a TON of I-bonds and many are now tapped out. So to squeeze out some extra funds they have made it more appealing.

 

[Teacher Terry]

I bought one in November, 2021 and one January 2022. I intend to buy one in 2023. Love the guaranteed interest which is a great rate.

 

[finnski1]

If you have the free cash now you could buy gift bonds for someone else which would have a 0.4% fixed rate and deliver them at some time in the future - you don't have to wait until next year to do that.

So many possibilities

True

 

[DallasGuy]

On the new Nov 1st rate of 6.89%, there is a fixed rate of 0.4%. So does that mean for older bonds previously purchased, they will get 6.49% plus any fixed rate (if any) that those bonds have? If they had no fixed rate, they will get just the 6.49%, right?

 

[Sunset]

On the new Nov 1st rate of 6.89%, there is a fixed rate of 0.4%. So does that mean for older bonds previously purchased, they will get 6.49% plus any fixed rate (if any) that those bonds have? If they had no fixed rate, they will get just the 6.49%, right?

You mean if they have a 0% fixed rate, and the answer is yes.

 

[NW-Bound]

Having any fixed rate component at all is a great and welcome surprise. I’ve been buying since 2015 and all but two of those bonds sport a 0.0% fixed rate.

Time to trade these old ones up for the new ones?

 

[RunningBum]

Seems like it is worthwhile to make an extra $5K estimated tax payment to buy an extra $5K of I-Bonds with the refund, isn't it?

 

[jj]

Seems like it is worthwhile to make an extra $5K estimated tax payment to buy an extra $5K of I-Bonds with the refund, isn't it?

Good thinking, I was wondering about that. This would be my first time getting I Bonds through our tax return. As the fixed rate might change again next May, how certain can you be that bonds are issued in April?

I guess what I'm asking is, with an electronically submitted tax return how quickly are the bonds issued?

Does anyone have any experience to share?

 

[londo]

This year I filed electronically on April 5 and received my paper IBonds by the end of April.

 

[euro]

Good thinking, I was wondering about that. This would be my first time getting I Bonds through our tax return. As the fixed rate might change again next May, how certain can you be that bonds are issued in April?

I guess what I'm asking is, with an electronically submitted tax return how quickly are the bonds issued?

Does anyone have any experience to share?

Filed with extension in September 2022 - got the bond in the mail maybe 2-3 weeks later. Just converted that bond to electronic version - submitted (snail mail) paper bond along with manifest 10 days ago - received an e-mail acknowledging receipt of bond and explaining that it will take about 13 weeks to process (fine with me really, but that's quite a lot of time, it seems). Somehow, this whole process seems very convoluted. There should be some way to provide TD account info and have the bond issued from the IRS directly in electronic format.

 

[jj]

Thanks to you both for your experience. It seems as if it doesn't take too long for the bonds to come through. I'm usually in a position to file by early March and that would be soon enough to get the current fixed rate.

euro, I agree that it seems very convoluted and inefficient to be sending out paper bonds in these electronic times. We had some paper bonds years ago that I converted to electronic and it took a while then.

 

[Sunset]

Good thinking, I was wondering about that. This would be my first time getting I Bonds through our tax return. As the fixed rate might change again next May, how certain can you be that bonds are issued in April?

I guess what I'm asking is, with an electronically submitted tax return how quickly are the bonds issued?

Does anyone have any experience to share?

We filed April 14th, as we were slow, and we got the April bond.

Note: we took the advice of someone here, and made sure our over-payment which we did in January, was $5,100 to try to ensure the refund was more than simply $5,000 for the I-bond.
Seems some people who only requested an I-bond, got a refund instead, but if you request both I-bond and little refund, both came through.

The other great thing about doing both, was when the refund hits your bank account, you have a little signal the I-bond will be on it's way.

 

[Jerry1]

If you get a physical bond through your tax return, can’t you just hold on to it and cash it at a bank when you want to? Not sure of the value of converting it to a digital bond through TD.

 

[Sunset]

If you get a physical bond through your tax return, can’t you just hold on to it and cash it at a bank when you want to? Not sure of the value of converting it to a digital bond through TD.

We are holding onto our paper bond. Seems a pain to convert it, along with potential loss in the mail system.

No idea about cashing it in.

 

[NW-Bound]

While I think the fixed rate is GREAT, it is surprising at first.

Then I realized it means maybe they feel they need to improve the appeal as people just bought a TON of I-bonds and many are now tapped out. So to squeeze out some extra funds they have made it more appealing.

When the fixed rate was 1% and the inflation part was 2-3%, the fixed rate was enough to pay for taxes on the inflation part, so that you break even or have a teeny bit of gain after tax and inflation.

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.

 

[Mulligan]

We are holding onto our paper bond. Seems a pain to convert it, along with potential loss in the mail system.



No idea about cashing it in.

I converted my paper IBond about 10 years ago. I swear I linked it through the online account and it was a breeze. It had to be or I wouldnt have done it. I have went two years without voice mail on my latest cell phone because it was too much of a hassle. So this had to be easy or I wouldnt have done it….
Looks like I hope to be back more into gifting mode. I will buy this fixed .4% Ibond in January. And if they slap a 1 handle on the fixed on May cycle I will do the gift box thing again. Then if we have any fuddy duddy cycles I will sell off the other 0% percenters and recycle into fixed ones.

 

[bobbyr]

This year I filed electronically on April 5 and received my paper IBonds by the end of April.

we filed in april including our $5k ibond refund request - nothing in the mail (and no deposity in our checking) -- our cpa is supposedly checking into it

 

[pb4uski]

Seems like it is worthwhile to make an extra $5K estimated tax payment to buy an extra $5K of I-Bonds with the refund, isn't it?

Yes. What I did last year was that I did my tax return. Then I made an estimated payment applied to 2021 taxes to bring my refund to $5,000 and once the payment clead my bank I electronically filed my return requesting that my $5,000 refund be in I Bonds. When I received the I Bonds in the mail I added them to my lectronic account and mailed them to the UST. Easy peasy.

 

[RunningBum]

Yes. What I did last year was that I did my tax return. Then I made an estimated payment applied to 2021 taxes to bring my refund to $5,000 and once the payment clead my bank I electronically filed my return requesting that my $5,000 refund be in I Bonds. When I received the I Bonds in the mail I added them to my lectronic account and mailed them to the UST. Easy peasy.

That makes sense. No need to tie up any more than needed. I had no issues converting the paper bonds last year.

 

[Sunset]

When the fixed rate was 1% and the inflation part was 2-3%, the fixed rate was enough to pay for taxes on the inflation part, so that you break even or have a teeny bit of gain after tax and inflation.

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.

Yes, but in these times, losing less is winning