The I Bond Thread

[Born2Fish]

I made I-bond purchases on the dates below, and attempted to determine the earliest date I could redeem after the interest rate fell to 3.38% for 3 months.

Are these Redeem Dates correct?


Purchased, Redeem
10/27/21, 1/1/2024

12/16/21, 9/1/2023

1/19/22, 10/1/2023

 

[xlf11]

Here is an ibonds calculator:
https://eyebonds.info/ibonds/home10000.html

 

[Born2Fish]

Here is an ibonds calculator:
https://eyebonds.info/ibonds/home10000.html

Thanks for the Calculator link! (I was off 1 month on each investment.)

 

[jollystomper]

I have $10K of I Bonds purchased in May 2021 that are off the "peak" interest rate cycles and now earning "only" 3.38%. One thought is to sell these (giving up $152 in the 3 month interest penalty) and use $10K of the proceeds to purchase a 52 week bill in the current auction (which I am guessing will be yielding over 5%; 52 week as it will be part of a T-Bill ladder). I do not need the money now. Thoughts about doing this?

Of course I am assuming the next rate adjustment will not jump up... but we all know what happens when we assume . I probably should analyze this in a spreadsheet, but I am too lazy at the moment (on the porch in sunny, warm but comfortable weather, enjoying the scenery).

 

[Dash man]

I have $10K of I Bonds purchased in May 2021 that are off the "peak" interest rate cycles and now earning "only" 3.38%. One thought is to sell these (giving up $152 in the 3 month interest penalty) and use $10K of the proceeds to purchase a 52 week bill in the current auction (which I am guessing will be yielding over 5%; 52 week as it will be part of a T-Bill ladder). I do not need the money now. Thoughts about doing this?

Of course I am assuming the next rate adjustment will not jump up... but we all know what happens when we assume . I probably should analyze this in a spreadsheet, but I am too lazy at the moment (on the porch in sunny, warm but comfortable weather, enjoying the scenery).

If you wait until August 1, you will only lose the three months of the 3.38%.

 

[Gumby]

If you wait until August 1, you will only lose the three months of the 3.38%.

That's what I would do. If you sell now, you will wipe out three months of interest at 6.48% 1 year treasuries are not likely to drop that much between now and August.

 

[jollystomper]

If you wait until August 1, you will only lose the three months of the 3.38%.

That's what I would do. If you sell now, you will wipe out three months of interest at 6.48% 1 year treasuries are not likely to drop that much between now and August.

Thanks! I knew I should have put this into a spreadsheet. Never make decisions when one is relaxing on the porch enjoying the weather .

 

[Sunset]

I have $10K of I Bonds purchased in May 2021 that are off the "peak" interest rate cycles and now earning "only" 3.38%. One thought is to sell these (giving up $152 in the 3 month interest penalty) and use $10K of the proceeds to purchase a 52 week bill in the current auction (which I am guessing will be yielding over 5%; 52 week as it will be part of a T-Bill ladder). I do not need the money now. Thoughts about doing this?

Of course I am assuming the next rate adjustment will not jump up... but we all know what happens when we assume . I probably should analyze this in a spreadsheet, but I am too lazy at the moment (on the porch in sunny, warm but comfortable weather, enjoying the scenery).

Another thought, is to hold onto this for 3 months at lower rate, then sell it and buy a new one, as the new one has .9 fixed rate plus the 3.38% rate. The new one will always pay .9 % better than the adjustable rate going forward.

 

[jollystomper]

Another thought, is to hold onto this for 3 months at lower rate, then sell it and buy a new one, as the new one has .9 fixed rate plus the 3.38% rate. The new one will always pay .9 % better than the adjustable rate going forward.

Thanks. I have thought about this as well, but not as much. Should look at it more. A classic "first world" issue of "too many sensible options" .

 

[Wupot2020]

A somewhat related question, how quickly are ibonds redeemed…meaning, if I put in a redemption request, does it get processed the same day?

 

[audreyh1]

If you wait until August 1, you will only lose the three months of the 3.38%.

+1

The tricky part to remember is that you have to wait until after the end of the month to redeem to get the prior month’s interest.

 

[audreyh1]

A somewhat related question, how quickly are ibonds redeemed…meaning, if I put in a redemption request, does it get processed the same day?

Not same day. Maybe following business day. It was quick.

 

[Chuckanut]

I have $10K of I Bonds purchased in May 2021 that are off the "peak" interest rate cycles and now earning "only" 3.38%. One thought is to sell these (giving up $152 in the 3 month interest penalty) and use $10K of the proceeds to purchase a 52 week bill in the current auction (which I am guessing will be yielding over 5%; 52 week as it will be part of a T-Bill ladder). I do not need the money now. Thoughts about doing this?

Of course I am assuming the next rate adjustment will not jump up... but we all know what happens when we assume . I probably should analyze this in a spreadsheet, but I am too lazy at the moment (on the porch in sunny, warm but comfortable weather, enjoying the scenery).

I don't blame you.


With the fixed rate now pushing 1%, I am thinking of buying a few more of those bonds next year with my personal ration of $10,000 and the $5,000 tax refund tool. I can pay for the 0.9% fixed rate bond by selling my 0% fixed rate bond. For now I will keep my 0.4% Ibond. This assumes inflation and interest rates keep on heading down. If not, then it's Plan B.

 

[madatrub]

CPI-U today = 304.127

 

[Phroig]

That’s a 0.76% increase over March. This does not bode well for the next I bond rate reset, even for those with the 0.9% fixed rate.

 

[steelyman]

That’s a 0.76% increase over March. This does not bode well for the next I bond rate reset, even for those with the 0.9% fixed rate.

I missed the 0.9% fixed rate and am done for 2023. Now I’ll pay attention to new fixed rates and swap older 0% fixed issues if non-zero are available. Not too sexy but I’ve reached my personal max for I Bonds.

 

[Sunset]

I missed the 0.9% fixed rate and am done for 2023. Now I’ll pay attention to new fixed rates and swap older 0% fixed issues if non-zero are available. Not too sexy but I’ve reached my personal max for I Bonds.

If you are married, or have a trusted parent, you can buy a gift for each other now to capture the 0.9% fixed rate (actually can buy a few) and then give them to each other $10K limit (not counting interest) each year.

I told DW , we can cash in a few we bought and then use the money to buy the 0.9% fixed rate as gifts to each other. Basically upgrading our holdings, but with the issue of locked into a many year process of delivering the gifts. But they earn interest and age while waiting.

 

[mrfeh]

If you are married, or have a trusted parent, you can buy a gift for each other now to capture the 0.9% fixed rate (actually can buy a few) and then give them to each other $10K limit (not counting interest) each year.

I told DW , we can cash in a few we bought and then use the money to buy the 0.9% fixed rate as gifts to each other. Basically upgrading our holdings, but with the issue of locked into a many year process of delivering the gifts. But they earn interest and age while waiting.

+1

We did this last month.

 

[steelyman]

If you are married, or have a trusted parent, you can buy a gift for each other now to capture the 0.9% fixed rate (actually can buy a few) and then give them to each other $10K limit (not counting interest) each year.

I told DW , we can cash in a few we bought and then use the money to buy the 0.9% fixed rate as gifts to each other. Basically upgrading our holdings, but with the issue of locked into a many year process of delivering the gifts. But they earn interest and age while waiting.

That’s a good idea and I’ve seen a number of other members posting that they’ve done similarly. In my case I just choose not to put any new money into I Bonds, gift or otherwise. That’s a personal thing. I pay very little attention to my holdings although I update their value in a spreadsheet periodically. I’m glad I have what I have and they’ve met my goal (takes a while, given purchase limits).

 

[Mulligan]

If you are married, or have a trusted parent, you can buy a gift for each other now to capture the 0.9% fixed rate (actually can buy a few) and then give them to each other $10K limit (not counting interest) each year.



I told DW , we can cash in a few we bought and then use the money to buy the 0.9% fixed rate as gifts to each other. Basically upgrading our holdings, but with the issue of locked into a many year process of delivering the gifts. But they earn interest and age while waiting.

I am doing the same, but waiting until September to get the full 6.4% returns off IBonds to be redeemed/recycled. I wouldnt advise anyone to pull the chord until your 3 months into the latest 3 handle cycle.

 

[Sunset]

I am doing the same, but waiting until September to get the full 6.4% returns off IBonds to be redeemed/recycled. I wouldnt advise anyone to pull the chord until your 3 months into the latest 3 handle cycle.

+1
We are also waiting until September to do it.

 

[Sunset]

That’s a good idea and I’ve seen a number of other members posting that they’ve done similarly. In my case I just choose not to put any new money into I Bonds, gift or otherwise. That’s a personal thing. I pay very little attention to my holdings although I update their value in a spreadsheet periodically. I’m glad I have what I have and they’ve met my goal (takes a while, given purchase limits).

You don't need to put new money into I-bonds.
A single person can sell an existing 0% fixed rate I-bond, and buy a 0.9% fixed rate one. No new money required.

A married couple using the gifting, can sell a bunch of 0% ones and buy as gifts a bunch of 0.9% ones. No new money required.

I hope if you have gifts for your spouse, that each year each of you are actually delivering one per year. They don't let you bank the delivery's, so you can't say "I didn't buy or deliver any for 3 years, now I want to deliver 3 ".

 

[Phroig]

The replacement strategy works well for investors who want a permanent allocation to I bonds. Otherwise, a gift to be delivered in x years is cash tied up for x years, at whatever rates the bonds pay. The fixed rate is great, but the interest rate may not be much higher going forward.
I've owned I bonds off and on when interest rates were attractive, mainly as a substitute for cash/bills/CDs. This time, I bought in 2021, and have one last pair of gifts to deliver in 2024. I expect I'll redeem the ones I own over the next couple of years, and don't expect I'll buy any more.

 

[steelyman]

You don't need to put new money into I-bonds.

A single person can sell an existing 0% fixed rate I-bond, and buy a 0.9% fixed rate one. No new money required.

A married couple using the gifting, can sell a bunch of 0% ones and buy as gifts a bunch of 0.9% ones. No new money required.

It may be that my understanding of the rules is incorrect (wouldn’t surprise me). For 2023 I have already bought $20K worth: $10K each for an individual and an entity (trust) account. I think that’s the limit. I’m OK with waiting till ‘24 and letting things sit. I suppose I just don’t get all jazzed about I Bonds. Or I’m lazy. [emoji4]

 

[11522914]

I am doing the same, but waiting until September to get the full 6.4% returns off IBonds to be redeemed/recycled. I wouldnt advise anyone to pull the chord until your 3 months into the latest 3 handle cycle.

Question. If I purchased an Ibond on 11/30/21, my interest would change to the 3.38% on May 1st and the earliest I should sell the bond would be August 1st. Is that correct?