Series I Savings Bonds for Emergency Fund - 3.54% interest rate

[seattlecyclone]

As much of a hassle as that is, I found it to be a bigger pain trying to redeem an EE bond at the bank.

Interesting. Last time I did that it was pretty quick and easy at the local Wells Fargo branch, but that was probably over 15 years ago with a few bonds my grandparents had bought for me as a kid. Paper savings bonds have become less common in the meantime, so I guess it makes sense.

[MustachioedPistachio]

Just bought some through my LLC!

[mizzourah2006]

Just bought $10k for my wife. So now we have $20k.

[HPstache]

Why does the Treasury Direct Website seem so extremely sketchy.  Anyone else get this feeling?  A website that looks like it's at least 15 years old?  Virtual Keyboard to enter password? This password thing seems really bizarre in particular...

[FIREandMONEY]

Why does the Treasury Direct Website seem so extremely sketchy.  Anyone else get this feeling?  A website that looks like it's at least 15 years old?  Virtual Keyboard to enter password? This password thing seems really bizarre in particular...

Yes, it's old, but no, it's not sketchy.  If it ain't broke, don't fix it is common in Federal Gov't.

[HPstache]

Why does the Treasury Direct Website seem so extremely sketchy.  Anyone else get this feeling?  A website that looks like it's at least 15 years old?  Virtual Keyboard to enter password? This password thing seems really bizarre in particular...

Yes, it's old, but no, it's not sketchy.  If it ain't broke, don't fix it is common in Federal Gov't.

The virtual "not case sensitive" keyboard to enter password is sketchy in my opinion.  Website is super hard to navigate.

[FIREandMONEY]

Why does the Treasury Direct Website seem so extremely sketchy.  Anyone else get this feeling?  A website that looks like it's at least 15 years old?  Virtual Keyboard to enter password? This password thing seems really bizarre in particular...

Yes, it's old, but no, it's not sketchy.  If it ain't broke, don't fix it is common in Federal Gov't.

The virtual "not case sensitive" keyboard to enter password is sketchy in my opinion.  Website is super hard to navigate.

Those were cutting edge security back in 2003 when keyloggers were more prevalent!  Nowadays, it's just as secure as typing it in (assuming you're not on an infected device), just more of a pain in the butt.

[MustachioedPistachio]

Why does the Treasury Direct Website seem so extremely sketchy.  Anyone else get this feeling?  A website that looks like it's at least 15 years old?  Virtual Keyboard to enter password? This password thing seems really bizarre in particular...

Yes, it's old, but no, it's not sketchy.  If it ain't broke, don't fix it is common in Federal Gov't.

The virtual "not case sensitive" keyboard to enter password is sketchy in my opinion.  Website is super hard to navigate.

I kind of got that sketch feeling too...

[Arbitrage]

Yes, the website is probably the most frequent complaint people have about buying savings bonds.

[markpst]

Thanks to reading about I-Bonds on the MMM forum, I did buy in December. I wanted to buy again in January - somehow I messed up my password. No big deal, right? Just answer your security questions. The problem was, they listed 10 or so questions, and you not only had to answer the 3 questions you used correctly, but remember what 3 you picked! They showed all 10 in in a list, didn't just give you the 3 you needed to answer.  Invariably, I could not remember that so I had to call for help. I couldn't even get through to get put on hold. I kept dialing and dialing. After about 15 minutes I did get through, and then was on hold for about 30 minutes or so. You had to reset your password with a live representative. I walked through my security questions with the representative (made note of which ones I used this time!) and was able to continue with my purchase after the reset.

[jnw]

I had absolutely zero issues with the old school site.  In fact I appreciated it oddly lol.

Seems secure to me with asking for the account number, the password and security question.  Also showing your image and caption.

[oneday]

Thanks to reading about I-Bonds on the MMM forum, I did buy in December. I wanted to buy again in January - somehow I messed up my password. No big deal, right? Just answer your security questions. The problem was, they listed 10 or so questions, and you not only had to answer the 3 questions you used correctly, but remember what 3 you picked! They showed all 10 in in a list, didn't just give you the 3 you needed to answer.  Invariably, I could not remember that so I had to call for help. I couldn't even get through to get put on hold. I kept dialing and dialing. After about 15 minutes I did get through, and then was on hold for about 30 minutes or so. You had to reset your password with a live representative. I walked through my security questions with the representative (made note of which ones I used this time!) and was able to continue with my purchase after the reset.

I've made a habit of recording the answers to my security questions in my password manager software. Has saved my bacon more than once. You do *not* want to have to call the government, generally. Actually, mega corps and tech corps can also be pretty bad. :)

[monarda]

So, remind me how this works- sometime in April we'll know the new rate for the next 6 months, starting May 1?
I bought $5000 in January and will buy another $5000 soon, or maybe in May, depending on what the new rate is.

[jnw]

So, remind me how this works- sometime in April we'll know the new rate for the next 6 months, starting May 1?
I bought $5000 in January and will buy another $5000 soon, or maybe in May, depending on what the new rate is.

If you bought $5000 more say today, from my understanding you'd be locked in at 7.12% for 6 months, and then it would then renew for another 6 months locked in at the next rate set on May 1st, for another 6 months.   Current CPI is around what 7.8%?   So good chance you'd be locked in at 7%+ for a full year if you bought before May 1st?   I am guessing they announce the new rate around the middle of April? Not sure.   Perhaps if you bought another $5k before the end of April, but after they announce the new rate, then you'd be locked in for a full year at a known average rate?

Maybe someone could clarify if I am understanding this correctly? New to it.  Just bought $4k yesterday.

[jnw]

I just thought about something.  Which dimensions are you all choosing for Series I Savings Bonds?   I just bought one at $500, one at $1000 and one at $2500.

I am thinking I should of made that $2500 five separate $500 bonds.  That way I would have more control when I want to harvest interest gains each year, for tax purposes.

I am thinking $10k into one bond maybe would be a bad idea.. at least break it up into ten $1000 bonds?    Because say you do $10k and you have it for 5 years and it generates $5k in interest.  When you redeem, as a single bond, you'd have an additional $5k in income for that year.  Whereas if you bought ten @ $1000, then you could sell off a fraction of that if you wanted to pay less federal income tax.

[rantk81]

I just thought about something.  Which dimensions are you all choosing for Series I Savings Bonds?   I just bought one at $500, one at $1000 and one at $2500.

I am thinking I should of made that $2500 five separate $500 bonds.  That way I would have more control when I want to harvest interest gains each year, for tax purposes.

I am thinking $10k into one bond maybe would be a bad idea.. at least break it up into ten $1000 bonds?    Because say you do $10k and you have it for 5 years and it generates $5k in interest.  When you redeem, as a single bond, you'd have an additional $5k in income for that year.  Whereas if you bought ten @ $1000, then you could sell off a fraction of that if you wanted to pay less federal income tax.

This is irrelevant for electronic I-Bonds.  Per the TreasuryDirect website:

Electronic bonds in TreasuryDirect

You can cash a minimum of $25 or any amount above that in 1-cent increments. If you cash only a portion of the bond's value, you must leave at least $25 in the TreasuryDirect account.  Redemptions are comprised of principal and interest. (In a partial redemption, we pay interest only on the partial amount you cash.)

[jnw]

Oh thank you :)

[fuzzy math]

Thanks for helping to keep this on page 1! Am mentally balancing taxes due having to go on a credit card (and thus adding a fee) vs waiting to buy more i bonds...

[rantk81]

Just wanted to throw in an update (or continuation of my post from a couple weeks ago):

It's been almost 2 weeks since I mailed my paper I-Bonds to the Treasury.  This morning, I received the following email:

FROM: TRESDoNotReply@fiscal.treasury.gov
TO: <[REDACTED]>

Customer Number: <[REDACTED]>
Customer Name: <[REDACTED]>
Case Number: <[REDACTED]>

Dear Customer,

This is a system generated email to communicate we received your Savings Bonds/Treasury Marketable Security materials. Due to the large volume of correspondence, we are experiencing, please allow 4-6 weeks to review and process your request.  If additional information is required to complete your request, we will contact you.  We appreciate your patience as we strive to continue to provide quality customer service.

This email contains your Customer Number and Case Number.  Please retain for your records. Also note that it is possible that you may receive multiple messages and Case Numbers depending on the type of transaction you have requested.

Sincerely,
Treasury Services

[mistymoney]

I just thought about something.  Which dimensions are you all choosing for Series I Savings Bonds?   I just bought one at $500, one at $1000 and one at $2500.

I am thinking I should of made that $2500 five separate $500 bonds.  That way I would have more control when I want to harvest interest gains each year, for tax purposes.

I am thinking $10k into one bond maybe would be a bad idea.. at least break it up into ten $1000 bonds?    Because say you do $10k and you have it for 5 years and it generates $5k in interest.  When you redeem, as a single bond, you'd have an additional $5k in income for that year.  Whereas if you bought ten @ $1000, then you could sell off a fraction of that if you wanted to pay less federal income tax.

I guess it depends on how you plan to use them? If you are going for 1-2 years expenses and to use if market dips 15% or more it may not matter - but if it is just for any minor shortfalls you don't want to sell other things for then maybe smaller denomination work better.

[Arbitrage]

I just thought about something.  Which dimensions are you all choosing for Series I Savings Bonds?   I just bought one at $500, one at $1000 and one at $2500.

I am thinking I should of made that $2500 five separate $500 bonds.  That way I would have more control when I want to harvest interest gains each year, for tax purposes.

I am thinking $10k into one bond maybe would be a bad idea.. at least break it up into ten $1000 bonds?    Because say you do $10k and you have it for 5 years and it generates $5k in interest.  When you redeem, as a single bond, you'd have an additional $5k in income for that year.  Whereas if you bought ten @ $1000, then you could sell off a fraction of that if you wanted to pay less federal income tax.

I guess it depends on how you plan to use them? If you are going for 1-2 years expenses and to use if market dips 15% or more it may not matter - but if it is just for any minor shortfalls you don't want to sell other things for then maybe smaller denomination work better.

You probably missed the comment above, where it was stated (correctly) that it doesn't matter what denomination you purchase the electronic bonds as - you can redeem them in basically whatever increments you wish.  I had the same mistaken impression previously, until I redeemed one last year and could have basically withdrawn any amount I wanted.

[missundecided]

I was looking at my Treasury Direct balance, and I noticed that they have applied 7.12% to all bonds I purchased in Sept, Nov, and Dec, but October is 3.54%. Is that to be expected?

[NotJen]

I was looking at my Treasury Direct balance, and I noticed that they have applied 7.12% to all bonds I purchased in Sept, Nov, and Dec, but October is 3.54%. Is that to be expected?

This makes sense - the rates update every 6 months after your purchase date.  Your Oct bond will update to 7.12% tomorrow (on April 1).

Sept started at 3.54%, but since it has passed 6 months, it's now at 7.12%.  Nov and Dec were purchased once the rate was 7.12%.

[missundecided]

I was looking at my Treasury Direct balance, and I noticed that they have applied 7.12% to all bonds I purchased in Sept, Nov, and Dec, but October is 3.54%. Is that to be expected?

This makes sense - the rates update every 6 months after your purchase date.  Your Oct bond will update to 7.12% tomorrow (on April 1).

Sept started at 3.54%, but since it has passed 6 months, it's now at 7.12%.  Nov and Dec were purchased once the rate was 7.12%.

Thanks for explaining so succinctly!

[2Birds1Stone]

Strange datapoint....

I have purchased $10k in I bonds the past 4 years. My most recent purchase on 1/2 2022 does not seem to be accruing interest monthly like all of the previous purchase, still shows the current value as $10k

Any ideas?

[geekette]

Strange datapoint....

I have purchased $10k in I bonds the past 4 years. My most recent purchase on 1/2 2022 does not seem to be accruing interest monthly like all of the previous purchase, still shows the current value as $10k

Any ideas?

From Treasury Direct:

The interest is compounded semiannually. Every six months from the bond's issue date, interest the bond earned in the six previous months is added to the bond's principal value, creating a new principal value. Interest is then earned on the new principal.

[2Birds1Stone]

Strange datapoint....

I have purchased $10k in I bonds the past 4 years. My most recent purchase on 1/2 2022 does not seem to be accruing interest monthly like all of the previous purchase, still shows the current value as $10k

Any ideas?

From Treasury Direct:

The interest is compounded semiannually. Every six months from the bond's issue date, interest the bond earned in the six previous months is added to the bond's principal value, creating a new principal value. Interest is then earned on the new principal.

So strange, since the other three batches all seem to update value every month.

Sent from my SM-N950U using Tapatalk

[3Mer]

Strange datapoint....

I have purchased $10k in I bonds the past 4 years. My most recent purchase on 1/2 2022 does not seem to be accruing interest monthly like all of the previous purchase, still shows the current value as $10k

Any ideas?

From Treasury Direct:

The interest is compounded semiannually. Every six months from the bond's issue date, interest the bond earned in the six previous months is added to the bond's principal value, creating a new principal value. Interest is then earned on the new principal.

So strange, since the other three batches all seem to update value every month.

Sent from my SM-N950U using Tapatalk

They take off the last 3 months interest if you have held them less than 5 years.  (Or I should say, your current holdings don't reflect the last 3 months interest)

[2Birds1Stone]

Thank you!

[seattlecyclone]

Right, they show no interest accruing for the first three months. At your five-year anniversary you'll get an extra three months of interest show up to account for the fact that the early sale penalty no longer applies.

[2Birds1Stone]

Right, they show no interest accruing for the first three months. At your five-year anniversary you'll get an extra three months of interest show up to account for the fact that the early sale penalty no longer applies.

That is awesome to know! It's also good to know that if you were to cash in we would get the value displayed in the TD.GOV portal and not that value -3 months of interest.

[jnw]

Btw, I just found this out, but if your TreasuryDirect.Gov account > $100k, the POD alone doesn't work, they require the courts to step in.  That sucks. I presume that means it goes to probate.  I'll make sure it won't ever exceed $100k as I want my estate transfer to be as painless as possible -- doing a TOD Deed for house as well.

[moneypitfeeder]

Btw, I just found this out, but if your TreasuryDirect.Gov account > $100k, the POD alone doesn't work, they require the courts to step in.  That sucks. I presume that means it goes to probate.  I'll make sure it won't ever exceed $100k as I want my estate transfer to be as painless as possible -- doing a TOD Deed for house as well.

You do have the option of having 2 people named on it and "The surviving person becomes the owner as if the survivor had been the only owner from the time the bond was issued." No probate is needed. I just got info from them for adding a person and if anyone is interested let me know and I'll post. https://www.treasurydirect.gov/indiv/research/indepth/ebonds/res_e_bonds_eedeath.htm#survivor

[jnw]

Okay I guess misread the following:

"Note: If an estate contains Treasury securities (including savings bonds) that total more than $100,000 in redemption value as of the date of death, the estate must be administered by a court."

Since I already have POD designations on each of my bonds, they won't ever even be part of the estate then?

[Mr. Green]

Okay I guess misread the following:

"Note: If an estate contains Treasury securities (including savings bonds) that total more than $100,000 in redemption value as of the date of death, the estate must be administered by a court."

Since I already have POD designations on each of my bonds, they won't ever even be part of the estate then?

I am not a lawyer, but as a person who has just gone through the estate administration process of two family members in the last three years I believe you are correct. Assets with a POD on them typically go right to the their listed on the account and are not part of the estate that becomes administered by the executor (court).

[salt cured]

Btw, I just found this out, but if your TreasuryDirect.Gov account > $100k, the POD alone doesn't work, they require the courts to step in.  That sucks. I presume that means it goes to probate.  I'll make sure it won't ever exceed $100k as I want my estate transfer to be as painless as possible -- doing a TOD Deed for house as well.

You do have the option of having 2 people named on it and "The surviving person becomes the owner as if the survivor had been the only owner from the time the bond was issued." No probate is needed. I just got info from them for adding a person and if anyone is interested let me know and I'll post. https://www.treasurydirect.gov/indiv/research/indepth/ebonds/res_e_bonds_eedeath.htm#survivor

Does the info cover how to add a person without a tax ID? When I've tried to add a beneficiary, it won't accept an entry without one.

[moneypitfeeder]

Does the info cover how to add a person without a tax ID? When I've tried to add a beneficiary, it won't accept an entry without one.

From what they sent, yes I believe you need a tax ID:
"Your electronic savings bonds and marketable securities may be registered in your name alone, your name with a secondary owner, or your name with a beneficiary. Each registrant's social security number (SSN) must be shown.

To add a secondary owner or beneficiary to your securities:
  •  Access your TreasuryDirect account.
  •  Click the ManageDirect® tab at the top of the page.
  •  Under the heading Manage My Securities, click Edit a registration.
  •  On the Edit Security Registration page, choose the security type you want to edit and click Select.
  •  On the Summary page, choose the security you wish to edit and click Select.
  •  On the Detail page, select the registration containing the secondary owner or beneficiary you desire from the drop-down menu. (If you've never created the registration, you can do so by clicking Add New Registration. Once you've created the new registration, the system will bring you back to the Detail page where you'll find the new registration listed in the drop-down menu.)
  •  Once you've selected the desired registration, click Submit to complete the change in registration for the security.
  •  Repeat the above steps to edit any of your other securities."

I'm not 100% sure, but I think the POD avoids probate. I'll try to get more definitive info.

[nalor511]

Btw, I just found this out, but if your TreasuryDirect.Gov account > $100k, the POD alone doesn't work, they require the courts to step in.  That sucks. I presume that means it goes to probate.  I'll make sure it won't ever exceed $100k as I want my estate transfer to be as painless as possible -- doing a TOD Deed for house as well.

You do have the option of having 2 people named on it and "The surviving person becomes the owner as if the survivor had been the only owner from the time the bond was issued." No probate is needed. I just got info from them for adding a person and if anyone is interested let me know and I'll post. https://www.treasurydirect.gov/indiv/research/indepth/ebonds/res_e_bonds_eedeath.htm#survivor

I'd be interested in instructions to title a bond correctly this way

[FIREandMONEY]

Looking like the variable rate will move to a 9.62% rate with the May reset. 

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

[wageslave23]

Looking like the variable rate will move to a 9.62% rate with the May reset. 

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

Wow!

[HPstache]

I think I am going to update my IPS to include I Savings bonds and eliminate my Bond Funds, seems like a no-brainer, right?

[pasadenafr]

I think I am going to update my IPS to include I Savings bonds and eliminate my Bond Funds, seems like a no-brainer, right?

In the short term, maybe. When inflation comes back down to Earth and interest rates stabilize, the opposite may be true again.

[HPstache]

I think I am going to update my IPS to include I Savings bonds and eliminate my Bond Funds, seems like a no-brainer, right?

In the short term, maybe. When inflation comes back down to Earth and interest rates stabilize, the opposite may be true again.

I Bonds have a base rate of return, at least they will always be returning at least that rate, right?

[dandarc]

I think I am going to update my IPS to include I Savings bonds and eliminate my Bond Funds, seems like a no-brainer, right?

In the short term, maybe. When inflation comes back down to Earth and interest rates stabilize, the opposite may be true again.

I Bonds have a base rate of return, at least they will always be returning at least that rate, right?

The 'base' is 0%, but yeah - they don't go down in value, even when inflation goes negative.

[HPstache]

I think I am going to update my IPS to include I Savings bonds and eliminate my Bond Funds, seems like a no-brainer, right?

In the short term, maybe. When inflation comes back down to Earth and interest rates stabilize, the opposite may be true again.

I Bonds have a base rate of return, at least they will always be returning at least that rate, right?

The 'base' is 0%, but yeah - they don't go down in value, even when inflation goes negative.

I guess my problem is that when I think of adding a bond allocation to my portfolio, what I really want is an actual Bond, not a Bond Fund.  Bond Funds are only available in my 401K and they don't behave like the smoothing effect that I expect from them.  In 2020 they tanked just like my stocks, maybe just a little less badly.  What I think I really want now that I've had that experience is an actual government bond and the I-Bond seems like a good choice to me now.

[feelingroovy]

Has anyone successfully purchased the $5k of I bonds from the tax refund when using FreetaxUSA?

They say to use form 8888, which FreetaxUSA claims to support, but I can't figure out how or where to use the software to invoke that form. Extensive searches via their help and Google are turning up nothing.

[seattlecyclone]

I guess my problem is that when I think of adding a bond allocation to my portfolio, what I really want is an actual Bond, not a Bond Fund.  Bond Funds are only available in my 401K and they don't behave like the smoothing effect that I expect from them.  In 2020 they tanked just like my stocks, maybe just a little less badly.  What I think I really want now that I've had that experience is an actual government bond and the I-Bond seems like a good choice to me now.

Vanguard's Total Bond Market Index Fund is about two-thirds US government bonds. These go up and down in value too, based on fluctuations in interest rates.

[HPstache]

I just took the dive, I am now a proud $10,000 I-Bond holder

[MustachioedPistachio]

I just took the dive, I am now a proud $10,000 I-Bond holder

Congrats!

[Turtle]

I just took the dive, I am now a proud $10,000 I-Bond holder

Congratulations!

I'm currently waiting for a check I'm owed to hit my account first so that I have the money to do this as well.  Hoping it will arrive in time, but if not I'll be buying next cycle for certain.