I bonds paying 9.62 next six months

[zoro]

if you buy before April 28th you get 7.12% for six months, and then 9.62% for the six months after that.

That's pretty good for a risk free return in this environment - especially as you can get it tax free if you use it for a kids education....

[Gone Fishing]

Thanks for the heads up.  Probably not the right thing for me, but I forwarded to a friend who won’t invest in the market.

[TomTX]

Thanks for the update. I already blew my wad* this year.

*ie, already purchased my $10k per SSN.

[MrGreen]

We're shifting 40k of bond allocation to I Bonds before the end of the month. VBTLX is basically guaranteed to continue losing value at this point. I believe this will be a much better home for 40k for the near future.

[aboatguy]

Glad we maxed out 2021 AND 2022 I BOND purchases for myself and my wife.

[MustacheAndaHalf]

People can invest up to $15,000/person per year if they overpay their taxes.  The $10,000/year is the "electronic bonds" limit.  If you also overpay your taxes by $5k / person tax return, you can get series I bonds on paper sent to you.  Thought I'd mention it for people doing their taxes this week... I guess you could also pay $5,000 more in taxes right now, and then amend your return to receive $5,000 in paper series I bonds (but I'm not a tax attorney).

EDIT: Although not mentioned on Treasury Direct's website, the IRS limits all series I bond purchases to $5,000 on form 8888, even for married filing jointly.

Maximum purchase
(per calendar year):
Electronic bonds: $10,000
Paper bonds: $5,000

https://www.treasurydirect.gov/indiv/products/prod_ibonds_glance.htm

[zoro]

I should mention that I discounted the tax free for kids education thing because there is an income limit of approx $180k but what you can do is roll your ibonds into a 529 once the interest rate is no longer attractive - and there is no income limit for that, and the range of things you can spend a 529 on tax free is much larger Ie books and tuition.

[Radagast]

People can invest up to $15,000/person per year if they overpay their taxes.  The $10,000/year is the "electronic bonds" limit.  If you also overpay your taxes by $5k / person, you can get series I bonds on paper sent to you.

I'd like to add the clarification that it is $5,000 per tax return, not per person. A couple filing jointly is limited to $25,000 per year total. Individually you could get $15,000 per year.

[HPstache]

I finally pulled the trigger and bought a $10,000 in I-Bonds , hopefully I won't need that cash for at least a year...

[dcheesi]

Bought, and shared this thread with some folks in another forum. Thanks!

[Villanelle]

People can invest up to $15,000/person per year if they overpay their taxes.  The $10,000/year is the "electronic bonds" limit.  If you also overpay your taxes by $5k / person, you can get series I bonds on paper sent to you.  Thought I'd mention it for people doing their taxes this week... I guess you could also pay $5,000 more in taxes right now, and then amend your return to receive $5,000 in paper series I bonds (but I'm not a tax attorney).

Maximum purchase
(per calendar year):
Electronic bonds: $10,000
Paper bonds: $5,000

https://www.treasurydirect.gov/indiv/products/prod_ibonds_glance.htm

Silly question I suspect, but... does it have to be the full $5k (for the tax return paper bonds)?  Does it even have to be a round number of some sort, or could one get $2783.84 (for example) in returns in paper bonds?  Too late for me for this year, but this is an interesting loophole to me, and want to keep it in mind for future years. 

[Radagast]

People can invest up to $15,000/person per year if they overpay their taxes.  The $10,000/year is the "electronic bonds" limit.  If you also overpay your taxes by $5k / person, you can get series I bonds on paper sent to you.  Thought I'd mention it for people doing their taxes this week... I guess you could also pay $5,000 more in taxes right now, and then amend your return to receive $5,000 in paper series I bonds (but I'm not a tax attorney).

Maximum purchase
(per calendar year):
Electronic bonds: $10,000
Paper bonds: $5,000

https://www.treasurydirect.gov/indiv/products/prod_ibonds_glance.htm

Silly question I suspect, but... does it have to be the full $5k (for the tax return paper bonds)?  Does it even have to be a round number of some sort, or could one get $2783.84 (for example) in returns in paper bonds?  Too late for me for this year, but this is an interesting loophole to me, and want to keep it in mind for future years. 

It is not $5,000 or nothing, you can get lesser amounts. I am not sure if it is possible to get a smaller increment than $50, the smallest savings bond issued.

Edit: they are issued as paper bonds, so really doubtful it could be less than $50 increments.

[MustacheAndaHalf]

People can invest up to $15,000/person per year if they overpay their taxes.  The $10,000/year is the "electronic bonds" limit.  If you also overpay your taxes by $5k / person, you can get series I bonds on paper sent to you.

I'd like to add the clarification that it is $5,000 per tax return, not per person. A couple filing jointly is limited to $25,000 per year total. Individually you could get $15,000 per year.

I'm surprised the Treasury Direct website said nothing about that.  But I found that on IRS form 8888 that is used to request paper series I bonds (at the bottom right of page 3):

You may request up to three different
savings bond registrations. However, each
registration must be a multiple of $50, and
the total of lines 4, 5a, and 6a can’t be
more than $5,000 (or your refund amount,
whichever is smaller).

https://www.irs.gov/pub/irs-pdf/f8888.pdf

[Radagast]

On the topic of paper savings bonds through tax returns, I did it this year and made a thread here:

https://forum.mrmoneymustache.com/investor-alley/paper-savings-bonds-like-gold-but-rarer/

[tryingtosave]

wait so should I buy all 10k before end of April or 5k now and 5k after May?

[jnw]

wait so should I buy all 10k before end of April or 5k now and 5k after May?

All of it now so you get 6 months at 7.12% and 6 months at 9.62%.  Unless you think Nov 1st interest rate is going to be higher than 7.12%.  If you put $10k in now, after 12 months you will have accrued $854 interest.   (The $10,854 can be withdrawn in as little as 14 months and a few days.)

[tryingtosave]

All of it now so you get 6 months at 7.12% and 6 months at 9.62%.  Unless you think Nov 1st interest rate is going to be higher than 7.12%.  If you put $10k in now, after 12 months you will have accrued $854 interest.

Thanks Jennifer

[jnw]

This all assuming the government will set the composite rate to 9.62% that is.. which most people assume will happen -- we'll see.  I'm countin' on it :)

[TomTX]

This all assuming the government will set the composite rate to 9.62% that is.. which most people assume will happen -- we'll see.  I'm countin' on it :)

To NOT set it at 9.62% would mean reneging on the promised formula for interest.

[jnw]

This all assuming the government will set the composite rate to 9.62% that is.. which most people assume will happen -- we'll see.  I'm countin' on it :)

To NOT set it at 9.62% would mean reneging on the promised formula for interest.

Right. We'll see.  I am counting on 9.62%.

[jeromedawg]

Would this be a good hedge for my in-laws who are on SSI and don't have a ton of assets? In the ballpark of $300k savings + a home worth somewhere between $700-800k and a mortgage balance of less than half of that?

[TomTX]

Would this be a good hedge for my in-laws who are on SSI and don't have a ton of assets? In the ballpark of $300k savings + a home worth somewhere between $700-800k and a mortgage balance of less than half of that?

I think it's the best bond hedge out there, bar none.

[Villanelle]

Would this be a good hedge for my in-laws who are on SSI and don't have a ton of assets? In the ballpark of $300k savings + a home worth somewhere between $700-800k and a mortgage balance of less than half of that?

Sure, as long as they don't need the money any time soon.  And they can only put 10k each into I bonds (there are some hedges that may be able to double it, like gifting to each other and counting as next years' contributions.  I'm not super savvy on that, but it has been discussed in several of the many recent I bond threads, so you can probably search for it.)  Or taking any future tax refunds as I bonds.

[TomTX]

Would this be a good hedge for my in-laws who are on SSI and don't have a ton of assets? In the ballpark of $300k savings + a home worth somewhere between $700-800k and a mortgage balance of less than half of that?

Sure, as long as they don't need the money any time soon.  And they can only put 10k each into I bonds (there are some hedges that may be able to double it, like gifting to each other and counting as next years' contributions.  I'm not super savvy on that, but it has been discussed in several of the many recent I bond threads, so you can probably search for it.)  Or taking any future tax refunds as I bonds.

One would hope that someone with $300k in savings, a paid off house and SSI could afford to lock up $20k for a year. After that it's completely accessible - you just give up the most recent 3 months of interest if you don't wait for 5 years.

[svosavvy]

Hi All,

Just wanted to say I finally set up a treasury direct account and fully funded my allotment of I bonds.  Thanks for the push.  It takes more like 10 minutes to set up.  Feeling good to allocate capital that was just sitting in an account getting .6% interest. 

Have a great day all.
Brad

[jnw]

Hi All,

Just wanted to say I finally set up a treasury direct account and fully funded my allotment of I bonds.  Thanks for the push.  It takes more like 10 minutes to set up.  Feeling good to allocate capital that was just sitting in an account getting .6% interest. 

Have a great day all.
Brad

Congrats.  I have $3k more to put in before the end of the year.  Which I'll probably put in around October 15th.

[Scandium]

Hi All,

Just wanted to say I finally set up a treasury direct account and fully funded my allotment of I bonds.  Thanks for the push.  It takes more like 10 minutes to set up.  Feeling good to allocate capital that was just sitting in an account getting .6% interest. 

Have a great day all.
Brad

Just 10 min?? I remember I had to go to a (specific) bank to show my ID and get a document notarized, for $25, to set up my treasure direct account. A massive PIA! The reason I didn't also buy $10k for my wife before 5/1 since I was late and knew it would take over a week to get her an account.

[simonsez]

Hi All,

Just wanted to say I finally set up a treasury direct account and fully funded my allotment of I bonds.  Thanks for the push.  It takes more like 10 minutes to set up.  Feeling good to allocate capital that was just sitting in an account getting .6% interest. 

Have a great day all.
Brad

Just 10 min?? I remember I had to go to a (specific) bank to show my ID and get a document notarized, for $25, to set up my treasure direct account. A massive PIA! The reason I didn't also buy $10k for my wife before 5/1 since I was late and knew it would take over a week to get her an account.

@Scandium when was this?  That sounds awful!  I didn't have an account until last fall and 10 min would be stretching it.  You get an ugly looking login #, make your own passcode, link a bank account with entering the checking and routing numbers, and then I purchased a few grand of I bonds.  I may have had to enter a SSN and verify an email address but nothing notarized and definitely no separate trips to a brick and mortar bank to prove anything.  Maybe certain banks aren't trusted by the Treasury Direct system?

[HPstache]

Hi All,

Just wanted to say I finally set up a treasury direct account and fully funded my allotment of I bonds.  Thanks for the push.  It takes more like 10 minutes to set up.  Feeling good to allocate capital that was just sitting in an account getting .6% interest. 

Have a great day all.
Brad

Just 10 min?? I remember I had to go to a (specific) bank to show my ID and get a document notarized, for $25, to set up my treasure direct account. A massive PIA! The reason I didn't also buy $10k for my wife before 5/1 since I was late and knew it would take over a week to get her an account.

@Scandium when was this?  That sounds awful!  I didn't have an account until last fall and 10 min would be stretching it.  You get an ugly looking login #, make your own passcode, link a bank account with entering the checking and routing numbers, and then I purchased a few grand of I bonds.  I may have had to enter a SSN and verify an email address but nothing notarized and definitely no separate trips to a brick and mortar bank to prove anything.  Maybe certain banks aren't trusted by the Treasury Direct system?

I had a similar simple/fast experience.

[Scandium]

Hi All,

Just wanted to say I finally set up a treasury direct account and fully funded my allotment of I bonds.  Thanks for the push.  It takes more like 10 minutes to set up.  Feeling good to allocate capital that was just sitting in an account getting .6% interest. 

Have a great day all.
Brad

Just 10 min?? I remember I had to go to a (specific) bank to show my ID and get a document notarized, for $25, to set up my treasure direct account. A massive PIA! The reason I didn't also buy $10k for my wife before 5/1 since I was late and knew it would take over a week to get her an account.

@Scandium when was this?  That sounds awful!  I didn't have an account until last fall and 10 min would be stretching it.  You get an ugly looking login #, make your own passcode, link a bank account with entering the checking and routing numbers, and then I purchased a few grand of I bonds.  I may have had to enter a SSN and verify an email address but nothing notarized and definitely no separate trips to a brick and mortar bank to prove anything.  Maybe certain banks aren't trusted by the Treasury Direct system?

Around 2016. I don't remember the exact reason, but I think something about "prove your identity" (no I'm not a secret agent, or a terrorist..). So not related to the bank. I have Schwab which should be fine (except few branches, so had to find another local bank that would do this notarizing BS!).

Guess I should try to set up an account for my wife and see if she maybe don't have to go through that. If we have some extra cash in 6 months before the next adjustment might want to buy some in her name too.


edit: sounds like it has happened to others. Not clear what the reason is, just that treasury can't "verify your identity"
https://www.bogleheads.org/forum/viewtopic.php?t=140232
Sign a form witnessed by a bank person, show ID, get stamp. snail mail (!) to TD, then account is activated. Between finding time to go to a damn bank, and mail could take 7-10 days.

[NaN]

I set up my account in 10 minutes. My DW tried and got the "verify identity" problem where she has to mail the form. She has a very common name and mine is not. Also good to fill out every box not just the 'required' ones. I dunno, the treasury direct website is like going back 10 years on the internet.

[TomTX]

More like going back 20 years...

[MrGreen]

The typing out your password on the on-screen keyboard is the most awful thing I've ever seen for a website login.

[geekette]

Mac keychain FTW!

[EvenSteven]

The typing out your password on the on-screen keyboard is the most awful thing I've ever seen for a website login.

Right click on the field, and select “inspect element” then delete the “read only” part. Then you can use the auto fill

[TomTX]

The typing out your password on the on-screen keyboard is the most awful thing I've ever seen for a website login.

Right click on the field, and select “inspect element” then delete the “read only” part. Then you can use the auto fill

Best tip I've heard in awhile! I have a highly secure keylocker and use long/complex passwords. I HATE having to type them out.