A couple I-Bond Questions

[Jerry1]

I looked at my I-Bond holdings today and have a couple questions I was hoping someone could answer. I have one $10K bond that I bought early 2022 and it shows the interest earned. However, the $10K bond I bought on 10/1/22 sitting in my gift box does not show any interest earned. Does it not show interest earned because it's a gift? Because it's too soon? Not a big deal, but I was updating my NW spreadsheet and wanted to put in final YE 2022 numbers.

Regarding the bonds me and DW have in our gift box to give each other, I was thinking I would do that this coming week. Any reason not to process them (gift them)? Then, is there any particular things I should be aware of before I start that process?

Thanks for the help.

 

[erkevin]

The most recent three month's interest is withheld on an I-Bond; it's the penalty if you liquidate before 5 years. Also, interest is only added every six months. I delivered my wife's 2023 gift this morning. Pretty simple- no need to wait.

 

[Gumby]

For gift I-Bonds purchased in October 2022, interest will start to show on Treasury Direct on the first day of February 2023. Until the five years are up, it is always three months behind, because you lose that interest if you cash in early. You can still deliver it.

 

[Jerry1]

Thanks!

 

[braumeister]

Also, interest is only added every six months.

No, interest is monthly. The new rate is semi-annual.

 

[erkevin]

Sorry, should have been specific; interest is added to the value of the bond every six months on the TD website, but the bonds do accrue interest monthly

 

[yhoomajor]

Question folks: I delivered iBond gift to my wife today. ($10k principal and $xxx.xx in interest). Does interest count towards yearly $10k limit? If yes, did this gift delivery go over her annual $10k limit?

 

[erkevin]

Question folks: I delivered iBond gift to my wife today. ($10k principal and $xxx.xx in interest). Does interest count towards yearly $10k limit? If yes, did this gift delivery go over her annual $10k limit?

No, the interest does not count

 

[cyber888]

Question folks: I delivered iBond gift to my wife today. ($10k principal and $xxx.xx in interest). Does interest count towards yearly $10k limit? If yes, did this gift delivery go over her annual $10k limit?

Did it get credited today instanteously?

The interest will not count to the limit, just the $10K principal.

 

[PaunchyPirate]

Sorry, should have been specific; interest is added to the value of the bond every six months on the TD website, but the bonds do accrue interest monthly

I’m confused then. I have been checking the value of mine every month for the last 6 months or so. I see the value increase every month in my account. I have to drill into each bond, but I see a higher value every month. I do this and manually update Quicken each month with the new grand total value.

I only have 2 bonds so far — purchased in Dec 2021 and Jan 2022.

 

[erkevin]

I am confused also. I have a few I-bonds but I dont check them very often. From treasurydirect.gov "I bonds earn interest from the first day of the month you buy them.

Twice a year, we add all the interest the bond earned in the previous 6 months to the main (principal) value of the bond.

That gives the bond a new value (old value + interest earned)."

https://treasurydirect.gov/savings-...arn interest from,old value + interest earned).

 

[Linney]

Regarding the bonds me and DW have in our gift box to give each other, I was thinking I would do that this coming week. Any reason not to process them (gift them)? Then, is there any particular things I should be aware of before I start that process?

I just did the gifting and it was pretty straightforward. Transfer was instantaneous.

There are two things you might want to note: (1) The gifted Ibond gets a new ID in the recipient's account. When purchased it was "IAAAL", after delivery it was assigned "IAAAP" which was the next available ID in the recipient's account. (2) You can update the registration after gifting. After the transfer we were able to update the registration to be the same as our other IBonds. Treasury Direct required us to answer one of our security questions before updating the registration. My husband forgot to record his security Q&As (we try to always store these on an encrypted drive). There was brief moment of concern but he guessed the right answer and we were able to make the edit from sole ownership to joint.

 

[flyingaway]

I am new to ibond stuff and have a question.

Can you buy $10,000 ibond for yourself and buy $10,000 ibond gift for someone else in a year?

 

[pb4uski]

... I delivered my wife's 2023 gift this morning. Pretty simple- no need to wait.

Thanks for the reminder. I did the same while watching football today, printed screems for each of our accounts for my records and am all set unless I decide to buy more IBonds in our trusts. I'll decided that in April.

 

[audreyh1]

I see changes at least monthly on my IBonds on the Treasury Direct site. I usually just look at them quarterly.

 

[Jerry1]

I just did the gifting and it was pretty straightforward. Transfer was instantaneous.

There are two things you might want to note: (1) The gifted Ibond gets a new ID in the recipient's account. When purchased it was "IAAAL", after delivery it was assigned "IAAAP" which was the next available ID in the recipient's account. (2) You can update the registration after gifting. After the transfer we were able to update the registration to be the same as our other IBonds. Treasury Direct required us to answer one of our security questions before updating the registration. My husband forgot to record his security Q&As (we try to always store these on an encrypted drive). There was brief moment of concern but he guessed the right answer and we were able to make the edit from sole ownership to joint.

Thanks. This will be very helpful.

 

[PaunchyPirate]

I am confused also. I have a few I-bonds but I dont check them very often. From treasurydirect.gov "I bonds earn interest from the first day of the month you buy them.

Twice a year, we add all the interest the bond earned in the previous 6 months to the main (principal) value of the bond.

That gives the bond a new value (old value + interest earned)."

https://treasurydirect.gov/savings-...arn interest from,old value + interest earned).

After studying things a bit, I think I may better understand how this works. A key is the NEXT sentence from what you copied from the TD website:

“Over the next 6 months, we apply the new interest rate to that entire new value.”

I think it goes like this… I will use a fictitious annual interest rate of 12% to make it easier to follow. That means each month gets 1%.

I buy a $10,000 bond on January 1 when the interest rate is 12%. On Feb 1st, $100 interest (for January) is added to my bond value. On March 1st, $100 interest is added. And so on, until 6 months interest has been added. Of note, each month’s interest is based solely on the initial $10,000 in principle.

On July 1st, the interest is compounded into the principal. The principal becomes $10,600.

On August 1st, 1% interest is now added, but it is now 1% of $10,600. So $106 is the interest amount. And it remains the new monthly interest amount for the next 6 months when compounding will happen again.

The Current Value of the principle is updated Monthly on the website, including recent interest.

Or something like that.

Edited to add (and draw the conversation further off the OP’s specific question (sorry)), here is a tool that lets you select the month your bond was purchased and then see the monthly growth of it thru time. Remember that you can’t count the most recent 3 months interest until you have held the bond 5 years. This tool does not incorporate that penalty. My account increases over the months match this tool exactly. And my overall value matches this tool minus the most recent 3 month since my bonds are less than 5 years old.

http://eyebonds.info/ibonds/

 

[Sunset]

I am new to ibond stuff and have a question.

Can you buy $10,000 ibond for yourself and buy $10,000 ibond gift for someone else in a year?

You can buy $10K for yourself and UNLIMITED number of gifts, each up to $10K in size.
In one year I bought 3 gifts for my DW.
The catch is, I can only give her 1 gift per year, and if I give her a $10K gift, she cannot buy anything for her account.

As a couple we did the following:

• I bought myself a 10K.
• She bought herself a 10K.
• We bought each other three 10K's (total of $60K) in gifts. Leaving the gifts in the purchaser's account, to be given later.

Let me know if you need my name for a gift

 

[Gumby]

I am confused also. I have a few I-bonds but I dont check them very often. From treasurydirect.gov "I bonds earn interest from the first day of the month you buy them.

Twice a year, we add all the interest the bond earned in the previous 6 months to the main (principal) value of the bond.

That gives the bond a new value (old value + interest earned)."

https://treasurydirect.gov/savings-...arn interest from,old value + interest earned).

Interest is credited monthly but compounded seminannually.

I am new to ibond stuff and have a question.

Can you buy $10,000 ibond for yourself and buy $10,000 ibond gift for someone else in a year?

Yes. You can buying an unlimited amount of gift bonds. However, a person can only receive as a gift or buy for themselves $10k in any one year. Which means if you give someone $10k in a year, they will be maxed out and can't buy for themselves that year. So, for example, I have $30k in gift bonds for the young wife currently in my "gift box". I will deliver $10k to her tomorrow, another $10k next January and the final $10k in January 2025. What that means is that she won't be able to buy I-bonds for her own account until 2026. She has the same set up for me. We bought all those gifts to capture the high interest rates this past year.

 

[yhoomajor]

Did it get credited today instanteously?

The interest will not count to the limit, just the $10K principal.

Yeah it got credited within few minutes.

 

[Eucerin]

I also pushed 2023 10k gift to spouse and spouse to me. Haven't done much of buy and sell since retired, just stay in the course. This I-bond gifting is one big deal in this year's investing, glad to get it done
By the way, I purchased I-bond in April 2022, and made a mistake during the purchase, I expected the Fed to returned the mistake fund 40k, but to this date it hasn't returned, and the $$ is in the account earning interest. No complains. From this site, I knew that some people got refund.

 

[pb4uski]

.... I Bonds Home $25

Great site. I'll just use this for each IBond that I own rather than mess around with Excel.

 

[HarryHawk]

I just transferred a gift bond I had purchased to my wife. I was surprised the system required me to enter her Treasury Account number. The system already knew her name and SS# from when I purchased the gift, I would have thought that would have uniquely identified her.

 

[braumeister]

I just transferred a gift bond I had purchased to my wife. I was surprised the system required me to enter her Treasury Account number.

Might just be an additional identity check, since you would have had to enter her account number when you bought the gift.

 

[HarryHawk]

Might just be an additional identity check, since you would have had to enter her account number when you bought the gift.

I was trying to remember if the giftee had to have a Treasury account set up at the time of purchase. OF course, they definitely need one to receive the gift.