Has anyone bought them lately? If you buy a paper copy does it have tracking? Seems scary $20K sitting in the mailbox.
Just read you can buy an extra $5K worth if you use your tax refund which means I need to start overpaying taxes.
How long to get it?
We bought $10k each when the interest rate jumped to 7%, last fall. We bought another $10k each the first week of January (for year 2022.)
You cannot buy âa paper bondâ except by using a tax refund. If youâre going to buy them with, you know, money, you get an e-account, not unlike your portal into your checking account at the local bank or your broker. To pay you fill out a slightly more detailed account application than usual, give them your bank routing info, and the transaction happens within 24 hours.
There is no paper trail. I recommend you write down your bonds, account #, etc. and keep it with your other bonds so you donât forget about it. How much of that info you write down is up to you, obviously.
The interest rate will reset in April, but it will still be high, given how inflation is acting these days. You canât get the money back for 1 year, if you break it before 5 years you lose 3 monthsâ interest (still a great deal), after 5 years you get full value. It keeps earning for 30 years.
Good info Goofy, thank you!!
My nephew was telling me to buy paper copies because hackers and stash them in the safe deposit. So it sounds like nope. I donât actually have any other bonds but these rates are hard to resist. Seriously, no paper trail? You just write down all the info and some day in the dark murky future these numbers unlock the paperless bonds back into cash. If you lose the numbers youâre out of luck?
Wild.
I have some paper bonds from many years ago.
As I understand it, you have an account and the bonds are in the account.
So you can keep track of your account or the individual bond numbers that lead back to the account.
There is also probably a way to recover your account since it is linked to your SSN(s), etc.
Mike
âseriously, no paper trail? You just write down all the info and some day in the dark murky future these numbers unlock the paperless bonds back into cash. If you lose the numbers youâre out of luck?â
Iâm sure the govât has your name and address to track you down when they mature.
I got a load of I-bonds maturing this year. Maxed out on âonlineâ and paper ones 30 years ago. Going to be painful year paying taxes on 30 years of interest.
Just keep a record of your transactions in your safe deposit box with the account number, your log on, your I-bond purchase number - transaction number - just like any old stock certificates , deeds, etc, in your safe deposit box.
t.
Thanks. Obviously a bond novice (bought some municipal bonds through a broker once) so this is all good.
Got way too much sitting in the bank at 0.7%. âLazy moneyâ. Gotta put it to work. Crack that whip!
One more thing: you are limited to buying $10k per year of I-bonds. Unless you are getting a tax refund, then you can add another $5k and get that one as a paper bond. A spouse can do the same. I think that your kids can also buy up to $10k as well. And if you happen to have a trust, the trust can buy another $10k for you, linked to your SS#. Weâve not done that so I donât know what hoops lie ahead for that exercise.
One tip: if thereâs any chance that you might have to cash out early buy several smaller denominations: 10x$1,000 or 4x$2500, etc. That way you can âcash outâ just a portion without having to pay the (small) penalty for cashing out the whole thing at the time. This will require you to do multiple separate transactions, but once you have the account set up itâs pretty perfunctory.
And of course thereâs no requirement that it be $10k, it can be any amount up to that.
Iâve got enough for $20K and enough I wonât need it for a year. Will the rate stay at 7.12 percent for 30 years? How do I keep track of the value?
Hi StockGoddess,
Will the rate stay at 7.12 percent for 30 years? How do I keep track of the value?
Iâm new at this as well. But I purchased $10K at the end of the year and bought another $10K at the beginning of this year. Did same for DW.
I believe that the rate resets every 6 months. So youâll get the 7.12% from when you buy until April, then the rate will reset.
The Treasure Direct site is like a bank web page where you can log into your account, see the bonds that you have purchased and the maturity date and current rate that they are earning.
My assumption is that once they have been in your account for 6 months, you will start to see accumulated interest as well. But I have not owned them for 6 months yet, so my account still just shows the two purchase lots.
Hope this helps.
'38Packard
StockGoddess,
Got way too much sitting in the bank at 0.7%. âLazy moneyâ. Gotta put it to work. Crack that whip!
I cracked the whip last year by opening accounts at a neo bank âHM Bradleyâ which I read about in a number of financial articles as well as here on the Fool. â https://www.hmbradley.com
I literally went through about 50 steps to open the accounts, set up direct deposits for me and my wifeâs deposits, set up automated transfers to our cash management account AND opened a credit card account to get another .5% on top of the 3% that they promised if I played by all of the rules, etc.
Did ALL OF THAT and then this month, they changed their highest rate from 3.5% to 1.5%. What a killer. I cannot wait until Ally Bank raises their interest rates to 1% - 1.5% and Iâll close those HM Bradley accounts and transfer the funds back to Ally.
I knew there was a risk that the introductory rate may have been too good to be true - well, it really was.
'38Packard
One more thing: you are limited to buying $10k per year of I-bonds. Unless you are getting a tax refund, then you can add another $5k and get that one as a paper bond.
I suppose another strategy is intentionally overpaying Federal taxes to be able to buy the extra bonds because of a refundâŚ
Iâve got enough for $20K and enough I wonât need it for a year. Will the rate stay at 7.12 percent for 30 years? How do I keep track of the value?
No, the rate resets every 6 months depending on the inflation rate at the time. That doesnât mean youâll beat inflation, but at least youâll keep up with it. Your bank deposits now are losing to inflation, and if you recall the 80âs that could continue for several years.
The deal of the century was about 20 years ago when the Feds gave 1% or 2% PLUS inflation, depending on how much money they were trying to attract. I have some of that, too. Then I stopped entirely when interest rates went to zero. (Or 1% or whatever ridiculous figure they were paying.) Now I-bonds are just down to 0% plus inflation. Yes, I would have done better by having that money in the stock market but no, I didnât (and still donât) want to have every penny in the market.
My trade off is I promise not to touch the money for a year (canât, actually) but then for 30 years I get a reasonable rate, and if I find something better I can always pull it out with the loss of 3 months interest - or after 5 years with no loss at all and with all the accrued interest (which is taxable, btw.)
TreasuryDirect does all the calculations, itâs a set-it and forget-it thing.
Hi SG,
Lots of good info in this thread about I-bonds. Iâve been maxing out my purchases of I bonds for the last 10 years with 20K for wife and I plus 5K paper bonds with tax return money. The last two years Iâve also maxed out our trust account. I havenât seen anyone provide a link to treasury direct so here it is if you need it:
https://www.treasurydirect.gov
This site is extremely easy to use once you have your account set up and seems to be very secure.
Another great web site that discusses all things about I-bonds and TIPS is tipswatch.com by David Enna. He is an absolute expert and publishes very timely articles about inflation indexed bonds.
Good Luck,
DT
TXT, ANSS Ticker Guide
Owner of I-bonds and TIPS
Click on my board name to see a list of my stock holdings
anybody know if itâs possible to buy these inside of an IRA?
anybody know if itâs possible to buy these inside of an IRA?
No, IRAs are not eligible to own I-bonds.
AJ
I noticed that you can create an account for an LLC or other types of businesses. Whatâs that about?
I noticed that you can create an account for an LLC or other types of businesses. Whatâs that about?
Yes, LLCs and businesses can own I-bonds. Iâd suggest reading this https://thefinancebuff.com/buy-i-bonds-business-sole-proprieâŚ
AJ
One other thing: set up your Treasury Direct account somewhat in advance of when you intend to make the first purchase.
Like any other financial-service provider, Treasury Direct requires identity verification. Usually this can be done instantly online, but it didnât work for me. I had to get a signature guarantee from my bank, and this happened just as the banks closed their offices in the spring of 2020. My bank started providing some additional services at drive-up and walk-up windows, but that wasnât one of them.
I had to make an appointment with a bank officer at the headquarters office, call when I was outside the door, and wait to be admitted. At this point the bank lobbies are open, but itâs still an extra step, requires waiting until a business day if youâre doing this in the evening or on the weekend, mailing in the form, and waiting for Treasury to process it. It would be frustrating to have that happen if you were ready to make the purchase immediately.
Tchrp,
Interesting. Iâve had my account for about 9 years, so things have changed a lot since then. I donât remember it being a big deal getting my Bank of America account set up to fund my purchases. I guess the good news is that when purchasing bonds, you usually have plenty of time unless youâre up against the interest rate adjustment date. Even then it is usually not that important in the long run. I-bonds are pretty mundane but reliable.
DT
TXT, ANSS Ticker Guide
Owner of I-bonds and TIPS
Click on my board name to see a list of my stock holdings
We set up our treasury Direct accounts over the weekend and the money was withdrawn this morning. Not bad. No hassles over identity at all. All smooth sailing.
My very first bonds purchase. Wheee! I guess Iâm supposed to diversify a bit from equities as I get older. I am 57âŚif the rates stay at 3 or better Iâll do it again next year.