The I Bond Thread

[Dash man]

One of my 2001 iBonds is now paying 12.76% interest! Several are over 11%. I wish I had bought larger amounts!

 

[Dash man]

I learned something new about iBonds. The month you redeem them does not earn any interest. It doesn’t matter whether you redeem on the first day or the last day of the month, there is no interest paid for that month. Apparently in the mind of the government, it offsets the full month of interest paid in the purchase month of the iBond.

 

[pb4uski]

Yup, that makes sense... they pay you a full month of interest in the month that you purchase and no interest in the month that you redeem... seems fair enough.

Funny thing is that if another financial institution did that to a consumer/investor I wonder if they would find that acceptable?

 

[jldavid47]

Yup, that makes sense... they pay you a full month of interest in the month that you purchase and no interest in the month that you redeem... seems fair enough.

Kinda encourages the investor to buy on the last day of a month and sell on the first day of a month.

Funny thing is that if another financial institution did that to a consumer/investor I wonder if they would find that acceptable?

No financial institution would be stupid enough to do that (see comment above). The government, on the other hand...

 

[pb4uski]

Yeah, with online savings account rates at 0.7% you could pick up $5.83 on $10,000!

 

[jazz4cash]

I was just on Vanguard looking at bonds and CDs and noticed this banner at the top of the page. Looks like perhaps i-bonds are pretty popular!

Wait! Vanguard says you can buy ibonds at a bank? That’s not correct is it?

 

[Mulligan]

Wait! Vanguard says you can buy ibonds at a bank? That’s not correct is it?

I bet they dont care if its true as long as you arent pestering them to buy, ha! I talked to a Vanguard rep a couple months ago needing help getting a bond quote. He thought I said I Bond. I said I already have a full amount of those and know they cant be purchased at Vanguard anyways. I asked if they were being pestered with phone calls on Ibonds, and he laughed and said the phone was ringing off the hook with people trying to buy them through Vanguard.

 

[jazz4cash]

I bet they dont care if its true as long as you arent pestering them to buy, ha! I talked to a Vanguard rep a couple months ago needing help getting a bond quote. He thought I said I Bond. I said I already have a full amount of those and know they cant be purchased at Vanguard anyways. I asked if they were being pestered with phone calls on Ibonds, and he laughed and said the phone was ringing off the hook with people trying to buy them through Vanguard.

Come to think of it, on my last Fidelity zoom call, I was explaining to my rep that I had purchased an ibond and entered the details on Fido’s portfolio monitor. He starts navigating to the Fidelity treasury bond pages as if I could’ve bought the ibond at Fido. I felt kinda bad for him as I explained.

 

[jldavid47]

Yeah, with online savings account rates at 0.7% you could pick up $5.83 on $10,000!

That's not the point. From the financial institution's perspective, that kind of interest payment arrangement would cost them millions (or more) per year. THAT'S why it would be stupid for them to do that.

 

[Chuckanut]

That's not the point. From the financial institution's perspective, that kind of interest payment arrangement would cost them millions (or more) per year. THAT'S why it would be stupid for them to do that.

You may be right.

Thankfully, we are under no obligation to accept such low rates these days.

I finally got a standard form letter response from my Representative about increasing the limit on I-bond sales. My guess is that it is probably the only such email she received. It's easier to complain about gas prices than write a well thought out email to one's elected representatives.

 

[Eucerin]

Ok, in a 10weeks waiting of the Fed returning my money back, I can't help wondering if, just if, its possible that I indeed bought 30k for the year Or another word that Fed did took my 30k for the year for Ibond It sounds like I am being naive but it has been too long, or its just a subconscious hope
I went on TD to see the accrued interest for the Ibond to determine whether Fed took 10k or 30k, but I can't find it. Not sure if I just didn't see it Or the website didn't provide that information

 

[calmloki]

My post #89:

screwed up a purchase back on 3/18/22. Was informed that I had over-purchased in my attempt to buy cross-gifts betwixt wife and I and that money would be refunded. Still haven't seen it, but it shows in TD as being there and earning 7.2%.

My current working theory is that TD shows purchases made during the month as being made and earning interest as of the first, but redemptions made before 5 years incur a 3 month interest penalty. So if they charged a penalty for early redemption of March, April, and May they could return exactly $20k to us on June 1st. Or maybe they decided to just keep the borrowed money for a while. Eager to see what the first of June reveals.
__________________**************
June 1 came and went with no refund - or interest posted - currently TD has this posted:
"The annual purchase limit for Series I savings bonds in TreasuryDirect® is $10,000. Purchases exceeding the annual limit will be refunded; refunds may take up to 16 weeks."

Now I'm waiting to see what happens July 1.

 

[Wupot2020]

I called TD today and waited 2.5 hours before I could talk to someone. My purchase mistake from 10 weeks ago hasn’t been refunded so I wanted to find out status. I was told refunds now take 12-16 weeks.

 

[Eucerin]

My post #89:

screwed up a purchase back on 3/18/22. Was informed that I had over-purchased in my attempt to buy cross-gifts betwixt wife and I and that money would be refunded. Still haven't seen it, but it shows in TD as being there and earning 7.2%.

My current working theory is that TD shows purchases made during the month as being made and earning interest as of the first, but redemptions made before 5 years incur a 3 month interest penalty. So if they charged a penalty for early redemption of March, April, and May they could return exactly $20k to us on June 1st. Or maybe they decided to just keep the borrowed money for a while. Eager to see what the first of June reveals.
__________________**************
June 1 came and went with no refund - or interest posted - currently TD has this posted:
"The annual purchase limit for Series I savings bonds in TreasuryDirect® is $10,000. Purchases exceeding the annual limit will be refunded; refunds may take up to 16 weeks."

Now I'm waiting to see what happens July 1.

Thank you for sharing your story. You are 14weeks in and still waiting I have seen the "up to16weeks refund" statement in TD website, it looks like we may get the refund in the 16th week. You mentioned "it shows in TD as being there and earning 7.2%", where can I see this in the website? I saw the 30k (which should refund 20k) but I didn't see the accrued interest for all 30k.

 

[Eucerin]

I called TD today and waited 2.5 hours before I could talk to someone. My purchase mistake from 10 weeks ago hasn’t been refunded so I wanted to find out status. I was told refunds now take 12-16 weeks.

You are in the same boat as me, it looks like we will have to wait the 16th week to be refunded. See another post that he is in 14th week and still not yet being refund

 

[Sunset]

Reading about how long it takes mistakes to be refunded is amazing.

Could also be informative to people who haven't bought any I-bonds to read a bunch, watch the treasury videos, ask questions, and then make the first purchase carefully with only a tiny amount of money. If it works fine, then can do another up to the $10K limit.

Had I heard of all these issues, I would have made my first purchase as a $100.

 

[Nurseninja]

I-Bond question

Newbie here, skimmed thru the 890 posts for the I-BOND thread. My impression is, drop 10k a year and the rate of return is 8-9 percent? Is this true. I’m cool with holding long haul and know I would lose 3 month interest if I do t hold for 5 years…..but wow- 8-9 percent.

Any feedback would be appreciated for this newbie. I have way too much cash sitting I. Money markets paying less than 1 percent.

 

[RetiredAndLovingIt]

The 9.62% is only for 6 months and then it changes. The official rate will be announced in November and May but you will get it for a full 6 months from the month of your original I-Bond purchase.
I bought last December at 7.26% , the official rate changed to 9.26% in May but my rate did not change till June.

 

[mystang52]

Newbie here, skimmed thru the 890 posts for the I-BOND thread. My impression is, drop 10k a year and the rate of return is 8-9 percent? Is this true. I’m cool with holding long haul and know I would lose 3 month interest if I do t hold for 5 years…..but wow- 8-9 percent.

Any feedback would be appreciated for this newbie. I have way too much cash sitting I. Money markets paying less than 1 percent.

You're correct. If you have the cash, and want to park it, no better place than I Bond right now. You'll have to hold on to it for minimum of 1 year, but it's a great deal.

 

[Nurseninja]

Buying today!!!! Thanks guys for the clarification. I do wish it was more than 10k. For 2023 can I purchase again on January 1 2023

 

[Dash man]

Newbie here, skimmed thru the 890 posts for the I-BOND thread. My impression is, drop 10k a year and the rate of return is 8-9 percent? Is this true. I’m cool with holding long haul and know I would lose 3 month interest if I do t hold for 5 years…..but wow- 8-9 percent.



Any feedback would be appreciated for this newbie. I have way too much cash sitting I. Money markets paying less than 1 percent.

The rate isn’t always this high. It’s based on inflation and adjusted every May and November, though the rates on individual bonds change on the six month anniversary of your purchase. If you buy an iBond today, the 9.62% is good for six months from your date of purchase. In six months it will adjust to the rate set on November 1.

 

[Nurseninja]

9 percent for 6 months - win win. If I drops to 7 percent, still not bad.

 

[Gumby]

The 9.62% is only for 6 months and then it changes. The official rate will be announced in November and May but you will get it for a full 6 months from the month of your original I-Bond purchase.
I bought last December at 7.26% , the official rate changed to 9.26% in May but my rate did not change till June.

A minor nit. It was 7.12% when we both bought last December.

 

[RetiredAndLovingIt]

Oops, I quoted the rate from memory, I should have looked it up.

 

[Mulligan]

Reading about how long it takes mistakes to be refunded is amazing.

Could also be informative to people who haven't bought any I-bonds to read a bunch, watch the treasury videos, ask questions, and then make the first purchase carefully with only a tiny amount of money. If it works fine, then can do another up to the $10K limit.

Had I heard of all these issues, I would have made my first purchase as a $100.

Treasury has just been slammed with people buying online this year as the word got out. Then throw in a lot of people trying to buy more or screwing it up has probably left them playing catch up. I tried to intentionally buy more late last year after my friend got away with it. But they returned my money in full approximately one week after I over contributed.