Sell I Bonds....or not?

[cranberryjoe]

Stupid question: how can I determine the fixed rate portion of an I bond if I did not record that information when I purchased it? Treasury Direct only shows me one interest rate, which I assume is the rate it is currently earning.

 

[Jerry1]

Stupid question: how can I determine the fixed rate portion of an I bond if I did not record that information when I purchased it? Treasury Direct only shows me one interest rate, which I assume is the rate it is currently earning.

Go to this web site. Click on the initial date of your bond. It will show the interest rates. At the very top it will describe the bond and state its fixed percentage.

I Bonds Home

 

[jollystomper]

There is a 52 week Treasury auction this coming Tuesday. I may sell my May 2021 I Bonds and roll the money into a 1 year treasury bill. Things to ponder over the weekend... .

 

[temartin]

If you want to sell I-Bonds and they are less than 5 years old you should sell 3 months after they reset to the lower rate. Then you get all the higher interest and your 3-month penalty is on the lower rate.

 

[Gearhead Jim]

...
Another factor is that I am simplifying my portfolio to make things easier for DW and DD if I get hit by a beer truck and would like to see Treasury Direct gone from our life, so I'm leaning towards getting out and replacing with 5-year TIPS bought from our brokerage accounts.

My attitude exactly. Because of the $10k/yr limit, we have a named account for me and a trust account for me, then a named account for my wife and a trust account for her, and a bunch of paper bonds. Finally we emptied the Gift Boxes. People who use it frequently may find TD to be straight forward, but with the PITA website and trying to replace older low-fixed bonds with newer stuff, it's the most labor intensive of any paper investments we have.

 

[Kayzmum]

Can I use part of my iBond sale for tuition?

 

[pb4uski]

Can I use part of my iBond sale for tuition?

Yes. See post #7 in this thread:

Also, one can use i-bonds to pay for college tuition. Tax free.

https://www.treasurydirect.gov/savi...-ee-i-bonds/using-bonds-for-higher-education/ (some AGI limits apply)

 

[Love This Community]

+1 You should receive $22,416 and depending on just when in Dec you bought them your annual return will be between 6.72% and 7.06%.



$10,000 I Bond December 2021

6.72%7.06%

12/01/21-20,000.00

12/31/21-20,000.00

09/02/2322,416.0022,416.00

I bought on December 31st. Have another set of ibonds- same $20,000 that I bought on April 15, 2022. When would be a good time to sell these? My criteria would be same where I might put the proceeds into a 529 plan or invest in after tax brokerage account. Don’t have immediate need as I am still in the accumulation phase. Thank you!

 

[pb4uski]

I bought on December 31st. Have another set of ibonds- same $20,000 that I bought on April 15, 2022. When would be a good time to sell these? My criteria would be same where I might put the proceeds into a 529 plan or invest in after tax brokerage account. Don’t have immediate need as I am still in the accumulation phase. Thank you!

Whether you bought on Dec 1 or Dec 31, the effective date of your purchase was Dec 1. Same thing for your Apr 15 purchase, it was Apr 1.

https://eyebonds.info/ibonds/10000/ib_2022_04.html

 

[Willers]

Another factor is that I am simplifying my portfolio to make things easier for DW and DD if I get hit by a beer truck and would like to see Treasury Direct gone from our life, so I'm leaning towards getting out and replacing with 5-year TIPS bought from our brokerage accounts.

Now that TIPS are returning better real returns I'm also unwinding my i-bonds so DW does not have two more accounts to deal with. I'm almost done with a ladder that will cover typical yearly expenses through until SS at 70.

 

[foxfirev5]

I'm a little surprised at the number of posts regarding dumping I bonds now that yields have dropped. It wasn't that long ago that every post was about how to open multiple accounts to maximize purchases. Just the musings of an old plodder who changes investments at the speed of a sloth. I'm still buying I bonds for the same reason I did decades ago.

 

[mrfeh]

I bought on December 31st. Have another set of ibonds- same $20,000 that I bought on April 15, 2022. When would be a good time to sell these? My criteria would be same where I might put the proceeds into a 529 plan or invest in after tax brokerage account. Don’t have immediate need as I am still in the accumulation phase. Thank you!

Note that if you use IBonds for college costs, the interest is tax free.

 

[tulak]

I sold some of my I bonds. I’m planning to sell them all. I was thinking of holding them long-term, but decided I don’t want to deal with TreasuryDirect.

Odds are good I’ll buy TIPS instead of I Bonds as an inflation hedge (mostly to deal with SORR). Otherwise, you can get a better yield elsewhere, so no point in staying with I Bonds.

 

[Love This Community]

Thanks pb4uski and mrfeh. I’m planning on cashing these out, pay the taxes and invest in 529 since oldest kid doesn’t start college until 2 years

 

[Quattro73]

I'm a little surprised at the number of posts regarding dumping I bonds now that yields have dropped. It wasn't that long ago that every post was about how to open multiple accounts to maximize purchases. Just the musings of an old plodder who changes investments at the speed of a sloth. I'm still buying I bonds for the same reason I did decades ago.

“Like”

 

[Kayzmum]

Yes. See post #7 in this thread:

Thank you.

 

[pb4uski]

I'm a little surprised at the number of posts regarding dumping I bonds now that yields have dropped. It wasn't that long ago that every post was about how to open multiple accounts to maximize purchases. Just the musings of an old plodder who changes investments at the speed of a sloth. I'm still buying I bonds for the same reason I did decades ago.

I think many of us bought them because of the juicy 9.62% yield compared to other alternatives available at the time and have never said that we would be in it for the long haul.

 

[Gumby]

That was my reason-- the most lucrative place to hold cash at the time.

 

[Fermion]

I redeemed one of the $1000 face I-bonds purchased in 2011 that recently were converted to electronic and got a paltry $1356

That is not a lot of gain for 12 years and most of that is from the last three years!

If inflation really is declining I can see why some people would sell.

 

[Quattro73]

I redeemed one of the $1000 face I-bonds purchased in 2011 that recently were converted to electronic and got a paltry $1356

That is not a lot of gain for 12 years and most of that is from the last three years!

If inflation really is declining I can see why some people would sell.

Well per portfolio visualizer BND would have gotten you $1255 and itip etf $1348, so there’s that.

 

[NoiseBoy]

I have an even $100k in I bonds, some of which have a 0% base rate. I was thinking of standing pat next year partly because I don't know that I have another $10k in "cash" that I want to put into I bonds. But, I like the idea of selling one of my older, 0% bonds next year and then using those proceeds to fund a new I bond purchase. I'd only sell a 0% bond that was at least 5 years old, so are there any other timing factors that I should consider?

Edit to add: I live in IL so I like investing in US gov't instruments that are exempt from our 4.95% state income tax.

 

[RunningBum]

I have an even $100k in I bonds, some of which have a 0% base rate. I was thinking of standing pat next year partly because I don't know that I have another $10k in "cash" that I want to put into I bonds. But, I like the idea of selling one of my older, 0% bonds next year and then using those proceeds to fund a new I bond purchase. I'd only sell a 0% bond that was at least 5 years old, so are there any other timing factors that I should consider?

The only consideration I'd give is if you don't want the income this year (or next year). Perhaps selling a bond would push you into the next IRMAA level, or you'll be in a lower tax bracket the following year.

Beyond that, unless you have a reason to take more income, I would sell the newest one over 5 years. It's less of a tax hit to take 5 years of I-bond income than 10.

 

[Cathydeverhart]

I'm just waiting for my iBonds to complete the 6.48% interests payments, and then I will sell it. That would be first few days in January.
Then, will look for a 5% CD

Same. Of what I purchased in October 2022, this was a good write up from today. https://tipswatch.com/2023/08/06/the-i-bond-exit-ramp-is-now-open-proceed-with-caution/

 

[bobbyr]

question -- how does selling the ibonds that are still in gift form? do you have to wait until the appropriate calendar year to first accept the gift then sell?

 

[Gumby]

question -- how does selling the ibonds that are still in gift form? do you have to wait until the appropriate calendar year to first accept the gift then sell?

Yes. We have $20k of bonds in the gift box that are trapped there until 1/1/25.