New CPI is 8.5% -- I-Bonds for next 12 months 7.81% guaranteed?

[jnw]

So this means if this CPI is applied to the Series I Savings Bond composite interest rate set on May 1st, it will be a guaranteed average return of (7.12% + 8.5%)/2 = 7.81%, over the next 12 months if you buy I-Bonds before the end of this month?  (Or will they find some way to not pay this high of inflation and make it a smaller number? I dunno.)

I'm buying $3k worth now for $7k total. Maybe I'll scrape up another $1k before the end of month.

[FLBiker]

Wow!  We've got $40K in I-bonds that we put in starting last year when the rate was 3.54% (and we thought that was decent).

[jnw]

Someone told me I calculated it wrong that the May 1st Series I Savings Bond Composite Interest rate should be more like 9.62% not 8.5%.  We'll see :)

(7.1 + 9.62)/2 = 8.36% averaged for the 12 months locked in.   Of course you'll have to hold it at least 15 months to get that 12 months of interest :)

[MustacheAndaHalf]

Wow!  We've got $40K in I-bonds that we put in starting last year when the rate was 3.54% (and we thought that was decent).

Sounds like 2 people buying $10k of I-bonds a year, for 2 years.  You can also deliberately overpay your taxes, and receive your refund as up to $5k/person in paper I bonds.

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

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

[maisymouser]

Ptf. I am at work so I can't check the math but am confused.

If the I bond rates are at 7.12% now for April and I buy by the end of the month, I can't assume that the variable rate at 6 months will be more than 0% in a worst case scenario correct? I don't really see how the May CPI factors into a guaranteed return or why you are averaging April and may.

But then again, I'm not an i Bond expert and have largely avoided this topic. Maybe I need a refresher on how these work.

[bacchi]

Ptf. I am at work so I can't check the math but am confused.

If the I bond rates are at 7.12% now for April and I buy by the end of the month, I can't assume that the variable rate at 6 months will be more than 0% in a worst case scenario correct? I don't really see how the May CPI factors into a guaranteed return or why you are averaging April and may.

But then again, I'm not an i Bond expert and have largely avoided this topic. Maybe I need a refresher on how these work.

Your bonds are set to the most recent rate, issued in May or November, every 6 months.

Any bonds bought this month (April 2022) will get the November 2021 rate. In October 2022, they'll be set to the May 2022 rate.

Bond A bought this month: 7.12% April through Sept
Bond A: 9.62% Oct 2022 through March 2023

Bond B bought in May 2022: 9.62% May 2022 through Oct 2022
Bond B: ??.?% Nov 2022 through April 2023

Will inflation be higher this summer and into the fall, in which case you should wait until May to buy? Or will it go down because most of the increase was due to gas prices*?


*https://tipswatch.com/2022/04/12/i-bonds-new-variable-rate-will-rise-to-9-62-with-the-may-reset/

[FIPurpose]

Ptf. I am at work so I can't check the math but am confused.

If the I bond rates are at 7.12% now for April and I buy by the end of the month, I can't assume that the variable rate at 6 months will be more than 0% in a worst case scenario correct? I don't really see how the May CPI factors into a guaranteed return or why you are averaging April and may.

But then again, I'm not an i Bond expert and have largely avoided this topic. Maybe I need a refresher on how these work.

Your bonds are set to the most recent rate, issued in May or November, every 6 months.

Any bonds bought this month (April 2022) will get the November 2021 rate. In October 2022, they'll be set to the May 2022 rate.

Bond A bought this month: 7.12% April through Sept
Bond A: 9.62% Oct 2022 through March 2023

Bond B bought in May 2022: 9.62% May 2022 through Oct 2022
Bond B: ??.?% Nov 2022 through April 2023

Will inflation be higher this summer and into the fall, in which case you should wait until May to buy? Or will it go down because most of the increase was due to gas prices*?


*https://tipswatch.com/2022/04/12/i-bonds-new-variable-rate-will-rise-to-9-62-with-the-may-reset/

I wouldn't wait at all. Grab the 7% and the 9%. Unless you're planning on withdrawing the account early, then it doesn't matter if the 9% doesn't start til October.

[lightaFIRE]

I would like to buy I-bonds and I googled to find the site. Is this really it? It looks like a scam website!

https://www.treasurydirect.gov/indiv/myaccount/myaccount_treasurydirect.htm

[SpaceCow]

I would like to buy I-bonds and I googled to find the site. Is this really it? It looks like a scam website!

https://www.treasurydirect.gov/indiv/myaccount/myaccount_treasurydirect.htm

Yes it's real. I don't see anything wrong with it, honestly.

[FLBiker]

I would like to buy I-bonds and I googled to find the site. Is this really it? It looks like a scam website!

https://www.treasurydirect.gov/indiv/myaccount/myaccount_treasurydirect.htm

Ha, it's absolutely real, and it's absolutely a janky looking website. :)

[HPstache]

I would like to buy I-bonds and I googled to find the site. Is this really it? It looks like a scam website!

https://www.treasurydirect.gov/indiv/myaccount/myaccount_treasurydirect.htm

Ha, it's absolutely real, and it's absolutely a janky looking website. :)

It's so bad... but yeah, that's it!  Type your password on this pop out keyboard, sketchhhhhy.

[Viking Thor]

Website is ugly but its a good deal and not that difficult to use. I've used it for over 6 years.

My bank has a better website and gives me basically nothing for interest. So I will continue to use the ugly website for my emergency fund and partial bond allocation and take the extra money.

[reeshau]

I would like to buy I-bonds and I googled to find the site. Is this really it? It looks like a scam website!

https://www.treasurydirect.gov/indiv/myaccount/myaccount_treasurydirect.htm

Ha, it's absolutely real, and it's absolutely a janky looking website. :)

My guess is that they are trying to avoid keylogger software with it.  But yes, it's a...unique solution to the problem of keeping passwords safe.

It's so bad... but yeah, that's it!  Type your password on this pop out keyboard, sketchhhhhy.

[Captain Cactus]

How long does it take to get the initial account number?  My wife registered for an account on Sunday and hasn’t seen account number come through her email yet.  She’s afraid she got scammed somehow.  But it was the real website, I did it with her.

[FLBiker]

How long does it take to get the initial account number?  My wife registered for an account on Sunday and hasn’t seen account number come through her email yet.  She’s afraid she got scammed somehow.  But it was the real website, I did it with her.

Hmm -- I don't remember there being much of a lag.  Maybe they don't process stuff on Sundays, though.  Did she check her spam folder?

Also, I have a terrible memory for things once they are completed -- I only remember my to do list. :)

[Captain Cactus]

How long does it take to get the initial account number?  My wife registered for an account on Sunday and hasn’t seen account number come through her email yet.  She’s afraid she got scammed somehow.  But it was the real website, I did it with her.

Hmm -- I don't remember there being much of a lag.  Maybe they don't process stuff on Sundays, though.  Did she check her spam folder?

Also, I have a terrible memory for things once they are completed -- I only remember my to do list. :)

Nothing in spam.  I assumed the account number was generated automatically, but looks like maybe there’s a human involved in processing requests, at least to some degree?

[ender]

I really should jump on the ibond bandwagon at this point.

[chemistk]

PTF - finally got around to setting up an account.

[bpage12]

Question on interest........If I put $10,000 in an I bond at 9.62% interest and hold it for one year how much interest would I receive?  I know there is a 3 month penalty if you cash in before 5 years.

[FIPurpose]

About 7%

[maizefolk]

Question on interest........If I put $10,000 in an I bond at 9.62% interest and hold it for one year how much interest would I receive?  I know there is a 3 month penalty if you cash in before 5 years.

Keep in mind that you're getting 9.62% for the first six months. After that it'll reset to whatever the next rate is. If inflation keeps accelerating the next rate might be even higher. But there is also some possibility that inflation will decline in the second half of the year and reduce the interest rates you'll be earning even in just a one year window.

[RainyDay]

How long does it take to get the initial account number?  My wife registered for an account on Sunday and hasn’t seen account number come through her email yet.  She’s afraid she got scammed somehow.  But it was the real website, I did it with her.

I did it earlier this year and had the same feeling -- worry that I had done it wrong or had been scammed, because it wasn't a fast turn-around.  I don't remember exactly how long it took, but the whole process took me a few weeks.  (Also had to go get a notary stamp on some document from my bank.)