PSA: Federal i-Bonds are returning 3.54% right now

[sadlebred]

How much is the minimum you can buy?

[shaynaatl]

Apr 20, 2022 22:12:01 GMT -5 sadlebred said:

How much is the minimum you can buy?

$25 min purchase. 

[smock]

Thanks, MM, I'm jumping on the I-bond train! 😆

[whitemerlot]

Yay. Opened an account for me and my h with 10k each today.

[jewel]

I opened an acct and did $10k for me and $10k for my H. Except…apparently I did it wrong and both $10k were assigned to me so the second got cancelled and will be refunded in 8-10 weeks. Lol. I think I need to open a totally separate acct for my H, not add him as another member of mine? May rates are higher still, so at least I’ll get that once I get my money back and redeposited.

[whitemerlot]

Apr 24, 2022 14:35:21 GMT -5 jewel said:

I opened an acct and did $10k for me and $10k for my H. Except…apparently I did it wrong and both $10k were assigned to me so the second got cancelled and will be refunded in 8-10 weeks. Lol. I think I need to open a totally separate acct for my H, not add him as another member of mine? May rates are higher still, so at least I’ll get that once I get my money back and redeposited.

Yes. You each need your own account. There is a really good episode on Suze Orman’s podcast (I know not everyone likes her) about these from last week and if you can buy in April, you get the 7.12 for 6 months and 9.62 for the second 6 months.

[wildrice]

Well, I just opened an account and put in 10k. That is a crazy rate!

I am so tempted to open a second account and do another 10k for H. We only keep about 25k in our savings so I am guessing that it would be stupid to tie up 20k of it for a year. I don't anticipate using it for anything during that time, but that's kind of the point of an emergency fund...

The 4 cents we earned last quarter on that account makes it really hard to keep our money there, lol.

[tacokick]

So if I bought in March, do I get this new May rate in six months? For how long? I felt like I understood this but now I’m not sure again.

[mainelyfoolish]

Apr 24, 2022 19:05:59 GMT -5 tacokick said:

So if I bought in March, do I get this new May rate in six months? For how long? I felt like I understood this but now I’m not sure again.

The inflation rate for I-Bonds is calculated (and often changes) twice a year and you always get six months of any given rate. The rate that was in place when you purchased your bond in March is the rate you get for your first six months. When you hit month seven, you move to the next rate that was announced after you purchased your bond and then you keep that rate for six months. The rates will continue to adjust every six months for the life of the bond.

After one year, you are able to cash out your bond whenever you wish, but you will lose the last three months of interest payments if you have owned the bond for less than five years.

[wildrice]

Apr 24, 2022 21:28:26 GMT -5 mainelyfoolish said:

Apr 24, 2022 19:05:59 GMT -5 tacokick said:

So if I bought in March, do I get this new May rate in six months? For how long? I felt like I understood this but now I’m not sure again.

The inflation rate for I-Bonds is calculated (and often changes) twice a year and you always get six months of any given rate. The rate that was in place when you purchased your bond in March is the rate you get for your first six months. When you hit month seven, you move to the next rate that was announced after you purchased your bond and then you keep that rate for six months. The rates will continue to adjust every six months for the life of the bond.

After one year, you are able to cash out your bond whenever you wish, but you will lose the last three months of interest payments if you have owned the bond for less than five years.

Oh, this is good to know! So if you purchase now, you get the 7+% that was announced in November for the next 6 months AND the 9+% rate for the second half of your year? I'm glad I purchase now if that's the case! Who knows what will happen by November 2022 and if the rate will be as good anymore. 

I was kind of kicking myself that I never got around to this earlier and missed the good rate for the last 6 months. 

[tacokick]

Apr 25, 2022 8:16:24 GMT -5 wildrice said:

Apr 24, 2022 21:28:26 GMT -5 mainelyfoolish said:

The inflation rate for I-Bonds is calculated (and often changes) twice a year and you always get six months of any given rate. The rate that was in place when you purchased your bond in March is the rate you get for your first six months. When you hit month seven, you move to the next rate that was announced after you purchased your bond and then you keep that rate for six months. The rates will continue to adjust every six months for the life of the bond.

After one year, you are able to cash out your bond whenever you wish, but you will lose the last three months of interest payments if you have owned the bond for less than five years.

Oh, this is good to know! So if you purchase now, you get the 7+% that was announced in November for the next 6 months AND the 9+% rate for the second half of your year? I'm glad I purchase now if that's the case! Who knows what will happen by November 2022 and if the rate will be as good anymore. 

I was kind of kicking myself that I never got around to this earlier and missed the good rate for the last 6 months. 

This what I thought it was like and why I bought in the end of March but then I was second guessing myself.

[tacokick]

Apr 24, 2022 21:28:26 GMT -5 mainelyfoolish said:

Apr 24, 2022 19:05:59 GMT -5 tacokick said:

So if I bought in March, do I get this new May rate in six months? For how long? I felt like I understood this but now I’m not sure again.

The inflation rate for I-Bonds is calculated (and often changes) twice a year and you always get six months of any given rate. The rate that was in place when you purchased your bond in March is the rate you get for your first six months. When you hit month seven, you move to the next rate that was announced after you purchased your bond and then you keep that rate for six months. The rates will continue to adjust every six months for the life of the bond.

After one year, you are able to cash out your bond whenever you wish, but you will lose the last three months of interest payments if you have owned the bond for less than five years.

Thank you! I thought that was how it worked but then I looked at the site again and confused myself with the charts lol I wish they wrote things out in words more clearly.

[Roc A Bee]

I bought 5k today. Thanks for posting. I had never heard of these before!

[sadlebred]

If you have money in cds that may be needed in 1-2 years, would you take them out of the cds (.25% or so) and put the money in ibonds?

I already bought $1000 the other day.

[wildrice]

Apr 26, 2022 11:00:20 GMT -5 sadlebred said:

If you have money in cds that may be needed in 1-2 years, would you take them out of the cds (.25% or so) and put the money in ibonds?

I already bought $1000 the other day.

I think I would! I don't see any downside if you don't plan to use the money for another year. If you think you'll need it sooner, that's another story.

[cricketwife]

Thanks! I was coming here and searching for advice on another topic and saw this. I’ve just purchased bonds for both kids with the money in their savings accounts.

[shaynaatl]

Apr 27, 2022 20:11:15 GMT -5 cricketwife said:

Thanks! I was coming here and searching for advice on another topic and saw this. I’ve just purchased bonds for both kids with the money in their savings accounts.

Did you buy using their SSN? That can complicate things slightly. Some items to be aware of:

thefinancebuff.com/buy-i-bonds-kids-name.html

When you cash out I Bonds from a Minor Linked Account for your kid, the money goes to the linked bank account. After that, you can transfer the money to a custodial account elsewhere for some other investments for your kid or spend the money on expenses that specifically benefit the kid.



Just like cashing out I Bonds in any other account, the accumulated interest is taxable to the kid in the year you cash out. TreasuryDirect will generate a 1099-INT form but it won’t send it by mail. You’ll have to remember to come into the Minor Linked Account and download or print the 1099 form. You use the 1099 form to file the tax return for your kid.

[cherry1111]

Finally got around to doing this for both of us. Stupid to have the money sitting in savings making practically zilch. Thanks for posting!

[cricketwife]

Apr 28, 2022 8:01:55 GMT -5 shaynaatl said:

Apr 27, 2022 20:11:15 GMT -5 cricketwife said:

Thanks! I was coming here and searching for advice on another topic and saw this. I’ve just purchased bonds for both kids with the money in their savings accounts.

Did you buy using their SSN? That can complicate things slightly. Some items to be aware of:

thefinancebuff.com/buy-i-bonds-kids-name.html

When you cash out I Bonds from a Minor Linked Account for your kid, the money goes to the linked bank account. After that, you can transfer the money to a custodial account elsewhere for some other investments for your kid or spend the money on expenses that specifically benefit the kid.



Just like cashing out I Bonds in any other account, the accumulated interest is taxable to the kid in the year you cash out. TreasuryDirect will generate a 1099-INT form but it won’t send it by mail. You’ll have to remember to come into the Minor Linked Account and download or print the 1099 form. You use the 1099 form to file the tax return for your kid.

Good grief, I guess I've made a mistake in that I will have to file tax returns for them.  It was only $1300 each so they won't earn enough interest to be taxed.  Live and learn, I guess. Thanks for the additional info.   

[wanderingback]

Ok bumping this thread because it looks like the interest rate is 9.6% now.

So I reviewed this website:
www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm

So we can just put 10k in and take it out after a year if needed? You can't lose money on ibonds, right? And the tax you pay is just on the interest it makes? Anything else that makes this risky?

Thanks for sharing this knowledge!

[Roc A Bee]

Jul 23, 2022 19:23:03 GMT -5 wanderingback said:

Ok bumping this thread because it looks like the interest rate is 9.6% now.

So I reviewed this website:
www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm

So we can just put 10k in and take it out after a year if needed? You can't lose money on ibonds, right? And the tax you pay is just on the interest it makes? Anything else that makes this risky?

Thanks for sharing this knowledge!

Yes you can take it out in 12 months, but you’d pay the penalty of 3 months interest if cashed in prior to 5 years. Yes they are safe- basically like a savings bond. It’s guaranteed by the government.

[fryjack2]

Hmmm. I think I'll take 20k of our refund and buy a couple bonds.

[dr.girlfriend]

Can anyone explain this part:

Investors can buy up to $10,000 worth of I bonds annually through the government’s TreasuryDirect website. You can purchase another $5,000 with your tax refund, upping the annual total purchase amount of series I bonds to $15,000 per person.

Is that only if you get that much in refund, or can you buy $5k more in a calendar year of iBonds with a tax return and just owe?

[mainelyfoolish]

Jul 26, 2022 20:35:47 GMT -5 dr.girlfriend said:

Can anyone explain this part:

Investors can buy up to $10,000 worth of I bonds annually through the government’s TreasuryDirect website. You can purchase another $5,000 with your tax refund, upping the annual total purchase amount of series I bonds to $15,000 per person.

Is that only if you get that much in refund, or can you buy $5k more in a calendar year of iBonds with a tax return and just owe?

You can only buy as much as you are getting in a tax refund when you file your return. Instead of having the refund issued as a direct deposit or a check, you can opt to have some or all of the refund issued as a paper I-bond.

www.irs.gov/refunds/using-your-income-tax-refund-to-save-by-buying-us-savings-bonds

[carrotsmakemefat]

What’s the longest bond period? I’d like to do this for my kiddo. I wouldn’t want to touch it for a good 10 years.

[mainelyfoolish]

Aug 1, 2022 13:48:39 GMT -5 carrotsmakemefat said:

What’s the longest bond period? I’d like to do this for my kiddo. I wouldn’t want to touch it for a good 10 years.

They stop earning interest after 30 years.

[dr.girlfriend]

We finally got it together to try to do this over the weekend. DH's account went through just fine, but mine "couldn't be verified" and I have to do the paper form, which they say can take 10 - 12 weeks to process! Plus, I went to the bank today to try to get the form stamped and they are making me come back with an appointment even though the guy was right there and he says it only takes 10 minutes. Such a pain!

[Pilsy]

Aug 16, 2022 18:50:53 GMT -5 dr.girlfriend said:

We finally got it together to try to do this over the weekend. DH's account went through just fine, but mine "couldn't be verified" and I have to do the paper form, which they say can take 10 - 12 weeks to process! Plus, I went to the bank today to try to get the form stamped and they are making me come back with an appointment even though the guy was right there and he says it only takes 10 minutes. Such a pain!

I'm annoyed on your behalf. What a PITA!

[dr.girlfriend]

Aug 18, 2022 8:31:34 GMT -5 Pilsy said:

Aug 16, 2022 18:50:53 GMT -5 dr.girlfriend said:

We finally got it together to try to do this over the weekend. DH's account went through just fine, but mine "couldn't be verified" and I have to do the paper form, which they say can take 10 - 12 weeks to process! Plus, I went to the bank today to try to get the form stamped and they are making me come back with an appointment even though the guy was right there and he says it only takes 10 minutes. Such a pain!

I'm annoyed on your behalf. What a PITA!

I got an email that they just received the paperwork, and it could take 13 weeks to process!  :-P  I hope that's an overestimate.

[memenee]

9.62% am I reading this right?

Can I open them for my kids or has to be an adult?

Any negatives to this? Thanks!