The I Bond Thread

[Gumby]

CPI for Jan 2024 was 308.417. CPI for Sep 2023 was 307.789.

The formula for the variable rate is ((CPI Mar/CPI Sep) - 1) x 200) = Variable APR.

So, if nothing changes for the next two months, the variable inflation component of I-Bonds will go to 0.4% APR.

If the monthly non seasonally adjusted increase is 0.2% for each of the next two months, the March CPI will be 309.652 and the I-Bond variable rate will be 1.2%.

I think it will be less, probably about 0.8% - 1.0% No prediction on the fixed rate component (which is currently 1.3%). In any event, I have more profitable alternatives at the moment.

 

[jollystomper]

CPI for Jan 2024 was 308.417. CPI for Sep 2023 was 307.789.

The formula for the variable rate is ((CPI Mar/CPI Sep) - 1) x 200) = Variable APR.

So, if nothing changes for the next two months, the variable inflation component of I-Bonds will go to 0.4% APR.

If the monthly non seasonally adjusted increase is 0.2% for each of the next two months, the March CPI will be 309.652 and the I-Bond variable rate will be 1.2%.

I think it will be less, probably about 0.8% - 1.0% No prediction on the fixed rate component (which is currently 1.3%). In any event, I have more profitable alternatives at the moment.

In practical application, if I buy an I Bond in April, I get 5.27% (1.3 fixed + 3.97 variable) for its first six month period. Then, if the next variable rate is 1%, the rate for its 2nd six month period would then be 2.3% (1.3 fixed + 1.0 variable). Is this correct?

 

[Gumby]

In practical application, if I buy an I Bond in April, I get 5.27% (1.3 fixed + 3.97 variable) for its first six month period. Then, if the next variable rate is 1%, the rate for its 2nd six month period would then be 2.3% (1.3 fixed + 1.0 variable). Is this correct?

Yes, that's correct.

 

[Mulligan]

I fully agree next cycle will yield pitifully. But I am committed to that 1.3% fixed being its the highest fixed in over 15 years. I want to keep a 50k base, so I gifted last fall, bought the full amount this year and then had GF gift me all my 0%s from the past. In turn I used proceeds to have her gift me right back the 1.3%. Nobody should have to hold 0% in gift boxes. They let you receive gifts even after a full yearly purchase.

 

[audreyh1]

Yes, I maintain a certain amount in IBonds for the long term and don’t worry about short-term rates. I just try to keep the highest fixed rates in my IBond portfolio.

 

[Sunset]

I fully agree next cycle will yield pitifully. But I am committed to that 1.3% fixed being its the highest fixed in over 15 years. I want to keep a 50k base, so I gifted last fall, bought the full amount this year and then had GF gift me all my 0%s from the past. In turn I used proceeds to have her gift me right back the 1.3%. Nobody should have to hold 0% in gift boxes. They let you receive gifts even after a full yearly purchase.

How long ago did you do this ?

Are you saying, I have a couple of 0% gifts in the box, and I can give them all out to DW in one year ?

 

[Mulligan]

I worked for me. I alluded to this last fall as others on an IBond article said they could and did. Another person I know did it. So I knew it would work, I just had to get around to doing it. If you look at their regs, it really only says if someone gifts you the limit you cannot purchase any that year. It doesnt ever come out and say if you buy 10k you cant receive a gift. Or maybe their programs arent set up to catch it. But Im assuming they leave the back door open because how is a gifter supposed to know the receiver has already bought. I probably wouldnt try to abuse the system and push 100k through or anything. But it may work just fine too.

 

[pb4uski]

Following as we each have a $10k gift that we were planning to do on 1/1/25 but would prefer to do sooner we can.

 

[mrfeh]

Following as we each have a $10k gift that we were planning to do on 1/1/25 but would prefer to do sooner we can.

You can do it now, as long as you haven't already received a gift for 2025.

https://mysolo401k.net/mycommunity/...rategy works as follows,or her limit for 2022.

https://keilfp.com/blogpodcast/buy-more-i-bonds-through-the-gift-box-method/

 

[Sunset]

I worked for me. I alluded to this last fall as others on an IBond article said they could and did. Another person I know did it. So I knew it would work, I just had to get around to doing it. If you look at their regs, it really only says if someone gifts you the limit you cannot purchase any that year. It doesnt ever come out and say if you buy 10k you cant receive a gift. Or maybe their programs arent set up to catch it. But Im assuming they leave the back door open because how is a gifter supposed to know the receiver has already bought. I probably wouldnt try to abuse the system and push 100k through or anything. But it may work just fine too.

Makes sense, as how would 2 different gifter's (Uncle, grandparents, Aunt, etc) know someone else already gave a gift or that the young relative had purchased some.

 

[pb4uski]

I worked for me. I alluded to this last fall as others on an IBond article said they could and did. Another person I know did it. So I knew it would work, I just had to get around to doing it. If you look at their regs, it really only says if someone gifts you the limit you cannot purchase any that year. It doesnt ever come out and say if you buy 10k you cant receive a gift. Or maybe their programs arent set up to catch it. But Im assuming they leave the back door open because how is a gifter supposed to know the receiver has already bought. I probably wouldnt try to abuse the system and push 100k through or anything. But it may work just fine too.

Do you have a link to the IBond article that you referred to?

 

[euro]

Do you have a link to the IBond article that you referred to?

I'd be interested too although I just initiated the delivery and will find out "in real time" what happens..... I'll report back

 

[Mulligan]

If you did it, they should hit your account almost instantly. Mine did, but I did it during “business hours” so that may have factored in though.

 

[Mulligan]

Sunset, I did it last week. Already got the dough within seconds and have already sold them into my bank account, to re-gift again.

 

[Mulligan]

PB, It wasnt the article but from the comments section….Here is one lifted for you….
M. Anderson says
JANUARY 2, 2023 AT 2:55 PM
As I have stated before, there is NO LIMIT to the dollar amount of gifts that you can deliver in any one year, even to the same person. For example, if you purchased a $10k I-bond for your wife every year for the last decade, you could deliver $100,000 (plus interest) in I-bonds to your wife this year.
However, whatever you deliver will go against that person’s purchase limit for that year. So, if your wife wants to buy her own I-bonds this year, she should purchase her $10,000 in I-bonds BEFORE you deliver the gift. Once you deliver the gift of $10,400, that will eat up whatever remains of her purchase limit
Here is the article link.
https://thefinancebuff.com/buy-i-bonds-as-gift.html/comment-page-4#comments

 

[Mulligan]

Did anyone sell yet? I already took the excess limit proceeds, deposited in bank and regifted already.

 

[pb4uski]

Did anyone sell yet? I already took the excess limit proceeds, deposited in bank and regifted already.

Not yet. I'm waiting to see how long it takes for Treasury Direct to figure out what you did and reverse it all.

I read some info that said that there was a limit on how much someone can gift to another person in any one year... if I gift $20k to DW in 2024 I can't claim that I didn't know that was over the limit.

Now if two different people gift $10k to another person then I can see that the giftors could claim that they didn't know what other giftors were doing and the giftee could claim that they have no control over what the giftors do and it would just wipe out the giftees ability to make any purchase for that year. But if the giftee has already purchased $10k and one or more giftees deliver gifts to the giftee then that is beyond the giftee's control.

So it would seem to be squishy depending on the circumstances and timing of purchases and gifts.

 

[Sunset]

^^^^^^^^^ Wow reversing it, would be messy..

 

[mrfeh]

Did anyone sell yet? I already took the excess limit proceeds, deposited in bank and regifted already.

Sold $20K of 0% fixed last month and gifted for 2025 (had already purchased limit for 2024).

Probably gonna do that again next month for 2026.

 

[Mulligan]

^^^^^^^^^ Wow reversing it, would be messy..

How about impossible? They would have to track the money from my account, to my bank, and then regifted to my GF. I will take a serious bet on that never happening ha. (Also I wouldnt bet against me since I have currently won 13 sports bets in a row…what a bowl and playoff season I had!) Seriously though…I dare someone to find in Treasury rules, that gifts cant be sent to someone that has already bought the limit….You wont find it because it is not there! People just assumed it wasnt possible, because they stated you cant buy any if you were gifted the 10k limit….TD never said they would deny gifts to be sent if someone already bought 10k.

 

[pb4uski]

You misunderstand me. I think that someone could gift $10k to someone who has already bought $10k because the giftor has no way of knowing whether the giftee has bought.

But I don't think a giftor could gift $20k in a single year because they would know that their $20k would exceed the giftee's annual limit.

I have heard of them reversing transactions. Certainly if you overbuy they will reverse the excess and send it to your linked bank account and then later let you know about it. If you overgifted (my $20k example) and the gift is still in the giftee's account then they could easily reverse the $10k excess.

Now if you gift $20k and the giftee redeems the $20k whether they would reverse $10k of the $20k redemption and then reverse the extra $10 gift I dunno.

 

[euro]

Not yet. I'm waiting to see how long it takes for Treasury Direct to figure out what you did and reverse it all.

I read some info that said that there was a limit on how much someone can gift to another person in any one year... if I gift $20k to DW in 2024 I can't claim that I didn't know that was over the limit.

\.

I didn't hear anything (although less than a week) about my first delivery to DW, so I just pulled the trigger on the last 3 deliveries. We will know (at SOME point)...

 

[Mulligan]

I didn't hear anything (although less than a week) about my first delivery to DW, so I just pulled the trigger on the last 3 deliveries. We will know (at SOME point)...

There have been people who have done more with no problems. Here is a post from one poster on another forum where we discussed it…And she was moving around way more money than me!

For those asking about redeeming more than $10K per year. I used our various family trust, professional LLCs, Gifts, etc to the tune of lower-mid six figures. I just spent hours redeeming; absolutely no issue. Ultimately there were two social security numbers and three bank accounts.

The only caution I have are the passwords. TD required me to update passwords on most. With so many accounts it becomes cumbersome. I went ahead and got the 1099 info for 2024 so I don’t have to try to endure password torture next year.

Not quite social security age but want to simplify my holdings/estate so doubt I will purchase anymore. Anyway, just a FYI

 

[Mulligan]

You misunderstand me. I think that someone could gift $10k to someone who has already bought $10k because the giftor has no way of knowing whether the giftee has bought.

But I don't think a giftor could gift $20k in a single year because they would know that their $20k would exceed the giftee's annual limit.

I have heard of them reversing transactions. Certainly if you overbuy they will reverse the excess and send it to your linked bank account and then later let you know about it. If you overgifted (my $20k example) and the gift is still in the giftee's account then they could easily reverse the $10k excess.

Now if you gift $20k and the giftee redeems the $20k whether they would reverse $10k of the $20k redemption and then reverse the extra $10 gift I dunno.

PB, as of now, the only reversing I have ever heard about is someone exceeding their purchase limit, not from a gift. It even happened to me. I had a friend get away with it with just a reprimand. But by the time I tried the trick too many had already done it, and they started clamping down.

 

[homestead]

Transferred our paper ibonds to TreasuryDirect only took a couple weeks for them to convert was expecting a lot longer.