i and EE bonds tracking and decisions

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
suzie2012
Posts: 37
Joined: Sat Feb 25, 2012 1:07 am

i and EE bonds tracking and decisions

Post by suzie2012 » Mon Oct 26, 2015 9:11 pm

I have a portfolio of iBonds and EE Bonds, both paper and electronic ones issued from 2003 until 2012. I’d appreciate some help and clarification about some related topics:

1. Is there a commercially available application (or service) that would help me easily track (with minimal work) all of these bond types in one place by downloading the relevant data from the Treasury website? I am not a programmer so I would not know how to build a spreadsheet or an application to do that. The Wizard is unfortunately for use only with paper bonds.

2. The iBonds issued in June 2011 and Jan 2012 that I have have a fixed and composite rate = zero. I am considering cashing them in. They didn’t make a lot of interest in the past few years so the tax will not be a lot. I just do not think that they have a great future. If I do not wait for 5 years from the issue date I would lose 3 months of interest. Does someone know how to calculate the interest that I would be losing? The interest shown at the Treasury site doesn’t include the penalty and I could not find any info about how to determine what the penalty would be. I have some reasons why I would not want to wait until the 5 years are over. It is very hard to make a decision re. cashing them in soon without knowing what I am losing by not waiting.

3. I do not quite understand how interest is posted to my account. I know that for iBonds “the interest is compounded semiannually. Every six months from the bond's issue date, all interest the bond has earned in previous months is in the bond's new principal value. Interest is earned on the new principal for the next six months.”. Is there any interest posted monthly to the account or only every 6 month? I am trying to figure out the best time to cash-in a bond.

4. What is the logic one should follow, what should one take into account when deciding which iBonds or EE Bonds to cash-in (how to pick out of bonds that are not mature and have been issued more than 5 yrs ago)?

If this is not the right place for these questions, please point me to where I should ask them. Thanks.

hnzw rui
Posts: 578
Joined: Tue Sep 22, 2015 2:26 pm

Re: i and EE bonds tracking and decisions

Post by hnzw rui » Tue Oct 27, 2015 1:16 am

Something to note:

1. Paper EE Bonds - Buy at 1/2 face value, guaranteed face value at year 20.
2. Electronic EE Bonds - Buy at face value, guaranteed 2x face value at year 20.

That's an implied rate of return of 3.5% so if you don't need the funds, I suggest holding onto those EE bonds until year 20.

Jack FFR1846
Posts: 10763
Joined: Tue Dec 31, 2013 7:05 am
Location: 26 miles, 385 yards west of Copley Square

Re: i and EE bonds tracking and decisions

Post by Jack FFR1846 » Tue Oct 27, 2015 8:47 am

Use the savings bond wizard from td website. I only have paper bonds where I enter the buy date, amount of face and serial number once. It does all the calculations then is saved locally as a file. I use a usb stick. It updates everytime you access it
Bogle: Smart Beta is stupid

ThisTimeItsDifferent
Posts: 247
Joined: Sat Jan 31, 2015 2:51 pm

Re: i and EE bonds tracking and decisions

Post by ThisTimeItsDifferent » Tue Oct 27, 2015 8:55 am

hnzw rui wrote:Something to note:

1. Paper EE Bonds - Buy at 1/2 face value, guaranteed face value at year 20.
2. Electronic EE Bonds - Buy at face value, guaranteed 2x face value at year 20.

That's an implied rate of return of 3.5% so if you don't need the funds, I suggest holding onto those EE bonds until year 20.
Not only is the total implied rate of return over the 20 years 3.5% annually, but the yield to maturity from today is much better than that because the annual accrual return if you return early is much lower; it varies but around 0.1%.

hnzw rui
Posts: 578
Joined: Tue Sep 22, 2015 2:26 pm

Re: i and EE bonds tracking and decisions

Post by hnzw rui » Tue Oct 27, 2015 10:29 am

ThisTimeItsDifferent wrote:Not only is the total implied rate of return over the 20 years 3.5% annually, but the yield to maturity from today is much better than that because the annual accrual return if you return early is much lower; it varies but around 0.1%.
True. I'm buying EE bonds at 0.30% as part of my emergency fund. If I end up needing to liquidate before the 20 years are up, at least the principal is intact and there's no state income tax (although at 0.30% it's not like you'll be paying a lot in tax anyway). If I hold it for 20 years, then that's a fairly decent, safe, guaranteed return and again, it's exempt from state income tax.

By the way, I think EE bonds issued in 2005-2007 had rates of around 3.5%.

User avatar
#Cruncher
Posts: 2865
Joined: Fri May 14, 2010 2:33 am
Location: New York City
Contact:

Re: i and EE bonds tracking and decisions

Post by #Cruncher » Tue Oct 27, 2015 10:52 am

suzie2012 in original post wrote:2. The iBonds issued in June 2011 and Jan 2012 that I have have a fixed and composite rate = zero. I am considering cashing them in. They didn’t make a lot of interest in the past few years ... I just do not think that they have a great future.
Over the 12 months ending December and January respectively, these two I Bonds will have earned about 0.74%. This is not bad considering the Consumer Price Index change from March 2013 to March 2014 (which determines their inflation rate) was a decrease of 0.1%. (See CPI-U Since 1961.) They have both benefited from the 0% floor feature on their composite rate for the current six month period. And during their next six month period they will both earn at an annual composite rate of 1.54%.
continuing, suzie2012 wrote:If I do not wait for 5 years from the issue date I would lose 3 months of interest. Does someone know how to calculate the interest that I would be losing?
You can use this web site. Click the link for the month/year of purchase to bring up a web page showing the month-by-month value the I Bond has grown to and will grow to. [*] For a bond held less than five years, the difference between the value today and the value three months earlier is the amount of interest you'd be losing. Both of these two bonds have the same value today in October as they had three months earlier in July. This means that if you redeem them this month, the interest "lost" is $0, which is not a real loss at all.

You can see from the little table at the top of this post that the June 2011 bond could be redeemed September - December with a $0 interest loss and the January 2012 bond could be redeemed October - January with a $0 interest loss.

* Next week I'll be updating this web site and the pages will show six more months of growth.

FactualFran
Posts: 973
Joined: Sat Feb 21, 2015 2:29 pm

Re: i and EE bonds tracking and decisions

Post by FactualFran » Tue Oct 27, 2015 12:30 pm

suzie2012 wrote:3. I do not quite understand how interest is posted to my account. I know that for iBonds “the interest is compounded semiannually. Every six months from the bond's issue date, all interest the bond has earned in previous months is in the bond's new principal value. Interest is earned on the new principal for the next six months.”. Is there any interest posted monthly to the account or only every 6 month? I am trying to figure out the best time to cash-in a bond.
The redemption value of an I Bond increases the first day of each month by the amount of the interest for the previous month. Some older EE Bonds accrued interest every 6 months instead of every month.

User avatar
dratkinson
Posts: 4760
Joined: Thu Jul 26, 2007 6:23 pm
Location: Centennial CO

Re: i and EE bonds tracking and decisions

Post by dratkinson » Tue Oct 27, 2015 2:18 pm

Option: Converting paper savings bonds: https://www.treasurydirect.gov/readysav ... _bonds.htm

You could send your paper bonds to TD and have them converted to electronic. Then all of your bonds are in one place and you manage them directly at TD, so no need to download your TD data into another application.

It can take some time (never done it, don't know how long) before converted bonds appear in your account. But if you don't need to redeem them now, then you have the time for the conversion process.


Computing lost interest. It is not necessary to do this other than as an academic exercise. Why? Because your TD account bond values already have the penalty subtracted. That is the meaning of the note: "P5 -- Includes 3 months interest penalty". The penalty/P5 note goes ways after 5-years of ownership.


Bond redemption. When it's time to redeem your bonds, it's fast to redeem electronic bonds, slower to redeem paper bonds. The redemption amount of each bond is exactly what TD says your current bond value is.


Bond interest. Interest is posted at the beginning of each month and the redemption values are unchanged for the whole month. So you might as well purchase near the end of the month and redeem near the beginning of the month.


Choosing which bonds to redeem. Assuming you want to minimize penalties/taxes, then choose the ones with the least interest earned. Would also need to consider whether you have any I-bonds with a fixed rate greater than 0%; might want to keep them.



Full disclosure. I used TD for my electronic bonds. My electronic bond data was stored in my TD account.

I used the TD Savings Bond Calculator for my paper bonds: https://www.treasurydirect.gov/indiv/to ... ndcalc.htm
My paper bond data was stored on my PC and easy to enter/update.
All instructions are on TD SBC web page.

Both methods gave exact redemption value for each bond.
d.r.a., not dr.a. | I'm a novice investor, you are forewarned.

Topic Author
suzie2012
Posts: 37
Joined: Sat Feb 25, 2012 1:07 am

Re: i and EE bonds tracking and decisions

Post by suzie2012 » Tue Oct 27, 2015 3:52 pm

Thanks a lot for the many helpful answers. Based on what you shared:
- I will not touch my EE bonds
- it seems that the savings bond wizard cannot handle electronic bonds, so I cannot use it for tracking all my bonds; how do most people who have a mixture of paper and electronic bonds track them easily? Do I understand correctly that one can save an inventory of paper bonds on TD (through the Wizard) and and inventory of electronic bonds in a different file through TD's calculator and update them easily when interest changes? I would rather not go through the process of exchanging paper bonds to electronic ones.
- I am comparing the current composite rate of my iBonds, particularly those with a fixed rate=0 (issued June 2011, Jan and Feb 2012) with what a 1 or 2 yr CD would pay. It seems to me that redeeming these iBonds next year (assuming that inflation rate stays negative or zero when it changes in Dec and June for the June 2011 bonds and Jan/July, Feb/Aug for the other 2) might be a good time to redeem them. I would not incur any penalty (the June 2011 will be more than 5 yrs old; the other 2 will have had a zero interest). Since the interest paid as of when they were issued is quite little, the tax implications would be minimal. If by then a CD would pay more (after tax), then why keep the iBond?
- Cruncher, thanks a lot for publishing and updating the tables at eye bonds, they are a real eye opener and very helpful, particularly for a novice like me
- dratkinson, I was trying to figure out the penalty not as an academic exercise but to avoid making redeeming decisions in the abstract. Now I know that the loss would be zero as the interest was zero. Waiting or not for the 5 yrs to be over before redeeming could be influenced by what one is foregoing.

I am still not clear about interest posting and redemption decisions (for iBonds). I now understand that it is better to redeem near the beginning of the month after o the 1st of the month the interest for the prior month was added and is available for redemption. Does it matter which month to redeem in the context of the issue date/the dates when the interest is compounded semiannually?

Thanks.
Last edited by suzie2012 on Tue Oct 27, 2015 5:08 pm, edited 1 time in total.

FactualFran
Posts: 973
Joined: Sat Feb 21, 2015 2:29 pm

Re: i and EE bonds tracking and decisions

Post by FactualFran » Tue Oct 27, 2015 4:25 pm

You can enter any Savings Bond in the Savings Bond Wizard: a paper one you have, an electronic one you have, or one you don't have. Entering electronic Savings Bonds in the Savings Bond Wizard means you are manually duplicating information that is already in your Treasury Direct account.

The assumption that the next inflation rate used with I Bonds will be negative or zero is incorrect. The annual inflation rate to be used with I Bonds should be 1.54% when it is officially announced at the beginning of Nov 2015. That is the rate that I Bonds with a fixed rate of 0% that were issued in June will earn starting in Dec 2015.

User avatar
friar1610
Posts: 1602
Joined: Sat Nov 29, 2008 9:52 pm
Location: MA South Shore

Re: i and EE bonds tracking and decisions

Post by friar1610 » Tue Oct 27, 2015 4:37 pm

Do you have accounts with Vanguard that you can view through their web site? If you do, you can set up an electronic link with Treasury Direct so all your electronic bonds will display there. You can also manually enter the paper bonds and update their values as often as you want (from the bond wizard). You can then see these bonds in the same place you see your mutual funds and have them included in your asset allocation computation as bonds or cash or whatever you consider them to be.
Friar1610

User avatar
Dutch
Posts: 1277
Joined: Thu Jun 27, 2013 2:12 pm

Re: i and EE bonds tracking and decisions

Post by Dutch » Tue Oct 27, 2015 4:54 pm

suzie2012 wrote:- it seems that the savings bond wizard cannot handle electronic bonds, so I cannot use it for tracking all my bonds
I track all my savings bonds in the wizard: Paper, electronic, series I, and series EE.

For electronic bonds you simply use a description in the space of the serial number. I use the same description as in the TD account (for instance: AAAJ). Also, I noticed that the wizard can't handle an EE Bond of $10,000, but when you break it up into two identical EE Bonds of $5,000, it works just fine.

Topic Author
suzie2012
Posts: 37
Joined: Sat Feb 25, 2012 1:07 am

Re: i and EE bonds tracking and decisions

Post by suzie2012 » Tue Oct 27, 2015 5:36 pm

Thanks.

FactualFran, you mentioned that
The assumption that the next inflation rate used with I Bonds will be negative or zero is incorrect. The annual inflation rate to be used with I Bonds should be 1.54% when it is officially announced at the beginning of Nov 2015. That is the rate that I Bonds with a fixed rate of 0% that were issued in June will earn starting in Dec 2015.
.

The TD website shows that the current Inflation rate for iBonds is -0.80%. I am quite confused about where the 1.54% is coming from (for current) and future too...

As far as capturing the info for all my bonds, my goal is to have them in one place with all the relevant info for easy updates and if possible to generate a report with all. Not having used the tools (and not having an example on the TD website) makes it hard to decide what to use to accomplish this. I do not know what "Entering electronic Savings Bonds in the Savings Bond Wizard means you are manually duplicating information that is already in your Treasury Direct account" means - can I see all the relevant info about each bond (electronic and paper) as a report and update it easily if I do not "duplicate" the info by using the Wizard?
By "relevant info", ideally, I mean: basic info about each bond (series, face value, issue date, serial number, cash value, total interest earned, current fixed, inflation and composite rates, ave life-time rate, next interest post, maturity date, yrs/months until maturity, etc.) and totals for the portfolio.

Dutch, do you have to update manually the electronic bonds that you entered in the Wizard?

Friar, I do have a Vanguard account and I didn't know that it can be linked to TD. When you do that, what info you see in VG about each Ibond?

User avatar
Dutch
Posts: 1277
Joined: Thu Jun 27, 2013 2:12 pm

Re: i and EE bonds tracking and decisions

Post by Dutch » Tue Oct 27, 2015 5:49 pm

suzie2012 wrote:Dutch, do you have to update manually the electronic bonds that you entered in the Wizard?
The wizard is a small program that you save to your computer. You enter your bond information once and save it. The wizard will then calculate and keep track of the value, going forward.

FactualFran
Posts: 973
Joined: Sat Feb 21, 2015 2:29 pm

Re: i and EE bonds tracking and decisions

Post by FactualFran » Tue Oct 27, 2015 6:24 pm

suzie2012 wrote:The TD website shows that the current Inflation rate for iBonds is -0.80%. I am quite confused about where the 1.54% is coming from (for current) and future too...
The inflation rate used with I Bonds comes from a recent 6 month change in the CPI-U.

The current rate was set on the first business day of May 2015. It was calculated using used the CPI-U values for Sep 2014 (238.031) and Mar 2015 (236.119). The CPI-U for Mar 2015 was the latest one known by the first business day of May 2015. The calculated semi-annual change in the CPI-U was -0.80% (= 236.119/238.031 - 1).

The rate to be set on the first business day of Nov 2015 uses the CPI-U values for Mar 2015 (236.119) and Sep 2015 (237.945). The calculated semi-annual change is 0.77%. The 1.54% value I posted was the annual change (twice the semi-annual change). 1.54% will be the composite rate of I Bonds with a 0% fixed rate when those I Bonds start using the inflation rate (to be) set in Nov 2015.
suzie2012 wrote: As far as capturing the info for all my bonds, my goal is to have them in one place with all the relevant info for easy updates and if possible to generate a report with all. Not having used the tools (and not having an example on the TD website) makes it hard to decide what to use to accomplish this. I do not know what "Entering electronic Savings Bonds in the Savings Bond Wizard means you are manually duplicating information that is already in your Treasury Direct account" means - can I see all the relevant info about each bond (electronic and paper) as a report and update it easily if I do not "duplicate" the info by using the Wizard?
When I have entered a Saving Bond into the Savings Bonds Wizard I have manually typed in the issue date and denomination. With electronic Savings Bonds, the Treasury has that information from when the purchase (or conversion from a paper bond) was made. I don't know whether it is possible to download data of a Treasury Direct account in a form that can be automatically imported by the Savings Bond Wizard. If it is possible, then it is not necessary to manually duplicate the data in the Savings Bond Wizard by typing it.

As far as I know, Treasury Direct does not have the ability to track paper Savings Bonds that you have. If you want the relevant data about your paper and electronic Savings Bonds in one place, that place can be the Savings Bond Wizard. However, you need to get the data into the Wizard. Some of the data you need to get into the Wizard is a duplicate of what Treasury Direct automatically keeps track of.

Topic Author
suzie2012
Posts: 37
Joined: Sat Feb 25, 2012 1:07 am

Re: i and EE bonds tracking and decisions

Post by suzie2012 » Wed Oct 28, 2015 5:20 pm

Thanks for all the information. I apologize for my naive and uneducated questions but these bonds are a lot harder to comprehend than I ever thought. Understanding the rate periods, the relationship between when the new inflation component is announced and when it actually applies to my bonds, understanding how rates are calculated, etc. appears to be quite difficult for the average person. It appears that the inflation rate “to be set” on Nov 1 is already available, so I am not sure what’s to be “set” on November 1. Regardless, at least I know where the composite rate of 1.54% comes from.

I have another follow-up to my silly questions.

Assume that I have an iBond issued in March 2003. The rate to be announced on Nov 1, 2015 will apply to this iBond as of March 1, 2016. If I was to sell this bond on January 1, 2016 I would get all the interest earned to-date by this bond (regardless of the fact that the compounding occurring every 6 months from the issue date will happen in March 2016). Please confirm that I understand correctly that the date when compounding happens doesn’t impact the interest I get when I redeem a bond.

Thanks.
Last edited by suzie2012 on Wed Oct 28, 2015 10:38 pm, edited 2 times in total.

User avatar
#Cruncher
Posts: 2865
Joined: Fri May 14, 2010 2:33 am
Location: New York City
Contact:

Re: i and EE bonds tracking and decisions

Post by #Cruncher » Wed Oct 28, 2015 10:31 pm

suzie2012 in last post wrote:Assume that I have an iBond issued in March 2003. The rate to be announced on Nov 1, 2015 will apply to this iBond as of March 1, 2016.
Yes, that is correct. The 0.77% semi-annual inflation rate to be announced next week will be applied to this bond's 1.6% fixed rate to produce a 3.15% composite rate. [*] The bond will earn at that annual rate for the six months from March through August 2016.
continuing, suzie2012 wrote:If I were to sell this bond on January 1, 2016 I would get all the interest earned to-date by this bond (regardless of the fact that the compounding occurring every 6 months from the issue date will happen in March 2016). Please confirm that I understand it correctly that the date when compounding happens doesn’t impact the interest I get when I redeem a bond.
You are correct. Even though I Bond interest compounds semi-annually, you don't need to wait to the end of the six month period to get it. It is credited monthly. This is hard to see in January 2016 since the composite rate September through February is 0%.

But look at the previous period March - August 2015 when the composite rate was 3.09%. During this six-month period the value of a $25 bond grew 1.545% (3.09% / 2) from $40.80 to $41.43 (40.80 * 1.01545). But its value increased each month during the period. So for example, if you redeemed it half-way through in June, you'd have received $41.11.

By the way, I hope your question about selling is hypothetical. If you really own this I Bond, its 1.6% fixed rate makes it a "keeper".

* The composite rate is calculated according to the formula shown here:

Code: Select all

composite rate = fixed rate + (2 * inflation rate) + (fixed rate * inflation rate)
0.0315         = 0.016      + (2 * 0.0077)         + (0.016      * 0.0077)

Topic Author
suzie2012
Posts: 37
Joined: Sat Feb 25, 2012 1:07 am

Re: i and EE bonds tracking and decisions

Post by suzie2012 » Wed Oct 28, 2015 11:12 pm

Thanks, Cruncher. I just carefully read the whole thread you previously pointed me to (Strategy for cashing in I-bonds early). Your and dratkinson's explanations and clear answers and your tables are extremely helpful, it's like taking a crash course from good teachers :). You are correct, I just picked a sample bond that I do not intend to sell. While I will not buy any new bonds now or in the near future, based on what I just learned, I might not sell anything, at least for now.

I still have to figure out how to easily track my mixture of paper and electronic i and ee bonds without having to look at each bond and update them manually. Treasury has different tools, each appears to have limitations and idiosyncrasies, but nothing to make tracking everything monthly, in one place, easy (with monthly automated downloads of all the relevant data). There have to be quite a few others in my situation and a better solution than what I found until now has to be available. I will try The Wizard (as suggested by Dutch), although Treasury stated that "most of our tools were developed (at least initially) before paperless bonds existed, so they don't work well for electronic/paperless bonds. This includes the Wizard and Calculator." ....

nolesrule
Posts: 1451
Joined: Thu Feb 26, 2015 10:59 am

Re: i and EE bonds tracking and decisions

Post by nolesrule » Thu Oct 29, 2015 9:22 am

The Wizard works just fine if you purchase electronic EE bonds at half of the listed price of any of the denominations in the Wizard. You just have to double the face value of the electronic EE bonds in order for them to accurately reflect current values.

Topic Author
suzie2012
Posts: 37
Joined: Sat Feb 25, 2012 1:07 am

Re: i and EE bonds tracking and decisions

Post by suzie2012 » Thu Oct 29, 2015 10:58 am

Thanks. Do you also use the Wizard for iBonds? The Treasury website states: that with the Wizard "you can print your savings bond inventory". Could you tell me what data fields are listed in this inventory for each bond and if the inventory also shows the total face value and current cash value of all the bonds? Does it show the current composite rate for each ibond (maybe broken down by the fixed rate and inflation rate) and the rate for EE bonds? Before I go through the exercise of setting everything up and entering my bonds, I would like to better understand what I get if I do that. Unfortunately the Treasury website is not quite informative about this.

FactualFran
Posts: 973
Joined: Sat Feb 21, 2015 2:29 pm

Re: i and EE bonds tracking and decisions

Post by FactualFran » Thu Oct 29, 2015 1:58 pm

suzie2012 wrote:Assume that I have an iBond issued in March 2003. The rate to be announced on Nov 1, 2015 will apply to this iBond as of March 1, 2016. If I was to sell this bond on January 1, 2016 I would get all the interest earned to-date by this bond (regardless of the fact that the compounding occurring every 6 months from the issue date will happen in March 2016). Please confirm that I understand correctly that the date when compounding happens doesn’t impact the interest I get when I redeem a bond.
The date when compounding happens matters. A redemption value of a savings bond just before a compounding date is less than the value just after the compounding date, assuming the savings bond does not have a current earnings rate of 0%.

User avatar
dbCooperAir
Posts: 1107
Joined: Tue Jan 07, 2014 10:13 pm

Re: i and EE bonds tracking and decisions

Post by dbCooperAir » Thu Oct 29, 2015 2:09 pm

suzie2012 wrote: I still have to figure out how to easily track my mixture of paper and electronic i and ee bonds without having to look at each bond and update them manually. Treasury has different tools, each appears to have limitations and idiosyncrasies, but nothing to make tracking everything monthly, in one place, easy (with monthly automated downloads of all the relevant data). There have to be quite a few others in my situation and a better solution than what I found until now has to be available. I will try The Wizard (as suggested by Dutch), although Treasury stated that "most of our tools were developed (at least initially) before paperless bonds existed, so they don't work well for electronic/paperless bonds. This includes the Wizard and Calculator." ....
As dratkinson noted above, convert your paper bonds to electronic bonds. You will than be able to login at TD and see everything in one spot.
Neither a wise man nor a brave man lies down on the tracks of history to wait for the train of the future to run over him. | -Dwight D. Eisenhower-

Topic Author
suzie2012
Posts: 37
Joined: Sat Feb 25, 2012 1:07 am

Re: i and EE bonds tracking and decisions

Post by suzie2012 » Fri Oct 30, 2015 8:45 am

Now I am quite confused regarding the impact of the date when compounding happens to the redemption value (if the then earnings rate is NOT zero)... I'd appreciate some clarification.

While I understand that converting the paper bonds to electronic ones might allow me to see them in one place, that's not something I wanted to do now. I was hoping to learn some details that I am looking for from others who mentioned that they use the Wizard for tracking all forms and types of bonds or any other methods for tracking that do not involve looking up each bond individually periodically and doing manual updates.

User avatar
#Cruncher
Posts: 2865
Joined: Fri May 14, 2010 2:33 am
Location: New York City
Contact:

Re: i and EE bonds tracking and decisions

Post by #Cruncher » Fri Oct 30, 2015 1:09 pm

suzie2012 in previous post wrote:Now I am quite confused regarding the impact of the date when compounding happens to the redemption value (if the then earnings rate is NOT zero)... I'd appreciate some clarification.
I'm no expert on EE bonds, but it appears that the ones issued May 1995 through April 1997 credit interest only once every six months. If you own any of these, you should aim to redeem them just after a six-month anniversary. I believe that all other EE bonds and all I bonds credit interest the first of each month.
[url=http://www.treasurydirect.gov/indiv/research/indepth/ebonds/res_e_bonds_eeratesandterms_eebondsissued051995_041997.htm#month]TreasuryDirect, in May 1995 through April 1997 (EE Bond Rates and Terms)[/url], wrote:Because interest is added only once every six months, you may want to consider that six-month anniversary as you plan when to redeem the bond.
To be sure,
TreasuryDirect wrote:Use the Savings Bond Calculator to find out when interest will next be added to the dollar value of an EE Bond that is still earning interest. (Look for "Next Accrual.")
I did this for five savings bonds choosing a valuation date of August 2015. The "Next Accrual" for the one issued May 1995 wasn't for three months; for the other four bonds it was the next month.

Code: Select all

Serial                Issue    Next     Final    Issue            Interest
  #   Series  Denom   Date    Accrual  Maturity  Price   Interest   Rate   Value
----- ------  -----  -------  -------  --------  ------  --------  ------  ------
 NA     I      $50   05/2005  09/2015  05/2035   $50.00   $22.24   0.00%   $72.24
 NA     EE     $50   05/2005  09/2015  05/2035   $25.00   $10.64   3.50%   $35.64
 NA     EE     $50   05/1997  09/2015  05/2027   $25.00   $25.92   1.35%   $50.92
 NA     EE     $50   05/1995  11/2015  05/2025   $25.00   $26.48   1.27%   $51.48 <--
 NA     EE     $50   05/1994  09/2015  05/2024   $25.00   $33.02   4.00%   $58.02
Regarding how to keep track of both electronic and paper savings bonds: Since Series I are the only savings bonds I own and since I'm familiar with Excel, I use my own spreadsheet, I Bond Portfolio Calculator. But it doesn't handle EE bonds. To handle them as well, you can use TreasuryDirect's online Savings Bond Calculator or its stand-alone Savings Bond Wizard which you need to download.

I've always wondered why anyone would prefer the SB Wizard to the SB Calculator. They both seem to provide the same information; and they both allow one's bond inventory to be saved. But the SB Calculator doesn't need to be downloaded and periodically updated. [*] My suggestion is to test the SB Calculator for yourself with a few bonds and see if it works for you.

* I've only dabbled with the SB Wizard and SB Calculator. More serious users may be able to point out advantages of the Wizard.

dh
Posts: 398
Joined: Sun Mar 13, 2011 8:01 pm

Re: i and EE bonds tracking and decisions

Post by dh » Fri Oct 30, 2015 1:25 pm

Suzie2012: A terrific resource for learning more is the Boglehead wiki: https://www.bogleheads.org/wiki/I_savings_bonds

From the information (scroll down toward the bottom of the page) on that site I created a spreadsheet to calculate composite rates based on the CPI-U changes. Since the fixed portion of each I savings bond you purchase is constant, simply entering CPI-U rates twice per year, the composite rate for the next six months are automatically calculated for each bond. To see current values the savings bond wizard is a wonderful tool.

Be well.

FactualFran
Posts: 973
Joined: Sat Feb 21, 2015 2:29 pm

Re: i and EE bonds tracking and decisions

Post by FactualFran » Fri Oct 30, 2015 2:35 pm

suzie2012 wrote:While I understand that converting the paper bonds to electronic ones might allow me to see them in one place, that's not something I wanted to do now. I was hoping to learn some details that I am looking for from others who mentioned that they use the Wizard for tracking all forms and types of bonds or any other methods for tracking that do not involve looking up each bond individually periodically and doing manual updates.
After downloading and installing the Savings Bond Wizard, you run it and enter the Saving Bonds that you have. According to the answer to the Frequently Asked Question How do I add a new bond to my inventory? you
  1. Select the series (EE, I, HH, and the like.) from the "Series" drop-down box.
  2. Select the denomination ($50, $100,and so on.) from the "Denomination" drop-down box.
  3. Enter the serial number or other notation (such as, Gift from Mom) in the "Serial Number" field. This field is optional.
  4. Enter the six-digit issue date, without spaces or other punctuation (such as, for April 2005, enter 042005).
  5. After you enter the date, the Wizard will verify the information and will either add the bond to your inventory or display an error message.
You save that initial inventory that you manually entered. When an additional savings bond is purchase, you run the program and manually enter the new bond to the inventory. As long as you save the inventory with each change, you manually enter a bond only once.

In early May and November the Treasury will have an update available with the rates that were recently set. Run the program and select Tools > Redemption Values... to be sure you have the latest update.

User avatar
dratkinson
Posts: 4760
Joined: Thu Jul 26, 2007 6:23 pm
Location: Centennial CO

Re: i and EE bonds tracking and decisions

Post by dratkinson » Fri Oct 30, 2015 4:27 pm

#Cruncher wrote:...* I've only dabbled with the SB Wizard and SB Calculator. More serious users may be able to point out advantages of the Wizard.
I tried both SBW and SBC as both claimed to have similar capabilities: local data storage, copy/paste/print data.

I never got SBW to work correctly on my old PC; was probably doing something wrong.

On the other hand, SBC worked as expected every time; so that was what I used to track my paper bonds. SBC data is easy to copy/paste into Excel, if that matters. Current SBC datafile was printed when I redeemed.

So SBC seems to give similar capability as SBW, just less to mess with: nothing to download/install/update.

SBW might have an advantage over SBC because some claim it can be tricked into tracking electronic bonds. (Don't know if you can trick SBC into tracking electronic bonds; never tried it.)
d.r.a., not dr.a. | I'm a novice investor, you are forewarned.

Topic Author
suzie2012
Posts: 37
Joined: Sat Feb 25, 2012 1:07 am

Re: i and EE bonds tracking and decisions

Post by suzie2012 » Fri Oct 30, 2015 11:18 pm

Thanks a lot for all the helpful links and spreadsheets and the shared experience. Luckily my oldest bond goes back to 2003, so I don't have to deal with the complications of the very old ones.

FactualFran
Posts: 973
Joined: Sat Feb 21, 2015 2:29 pm

Re: i and EE bonds tracking and decisions

Post by FactualFran » Sat Oct 31, 2015 12:34 pm

dratkinson wrote:SBW might have an advantage over SBC because some claim it can be tricked into tracking electronic bonds. (Don't know if you can trick SBC into tracking electronic bonds; never tried it.)
There is no trick involved. With the SBC the Bond Serial Number field can contain any text that fits, as it is with the SBW.

A difference between the SBC and SBW is that the SBC transmits your savings bond inventory over the internet to calculate the redemption values at a web server. The SBW does not need transmit your inventory over the internet to calculate the redemption values. The SBW includes the rate history of savings bonds and can do the calculations on your computer. A new rate history is part of the update to the SBW that occurs every 6 months.

User avatar
dratkinson
Posts: 4760
Joined: Thu Jul 26, 2007 6:23 pm
Location: Centennial CO

Re: i and EE bonds tracking and decisions

Post by dratkinson » Sat Oct 31, 2015 7:26 pm

FactualFran wrote:
dratkinson wrote:SBW might have an advantage over SBC because some claim it can be tricked into tracking electronic bonds. (Don't know if you can trick SBC into tracking electronic bonds; never tried it.)
There is no trick involved. With the SBC the Bond Serial Number field can contain any text that fits, as it is with the SBW.

A difference between the SBC and SBW is that the SBC transmits your savings bond inventory over the internet to calculate the redemption values at a web server. The SBW does not need transmit your inventory over the internet to calculate the redemption values. The SBW includes the rate history of savings bonds and can do the calculations on your computer. A new rate history is part of the update to the SBW that occurs every 6 months.
Concede your point, but the issue is in the details. How do you get around the limitations of each? What is the "data entry methodology" (trick :happy) required to get them to track something they were not originally intended to track? If memory serves from past discussions:

I bonds. Recall issue is denomination. You can purchase a $10K electronic I bond, but only a $5K paper I bonds. SBW knows this so trick was to double-enter a $10K bonds as two $5K bonds. However, just checked and SBC will allow the entry of a single $10K I bond. Advantage: SBC.

EE bonds. Recall issue was denomination/issue-price. Paper bonds are purchased at half face value: issue price. Electronic bonds are purchased at face value. Both SBW/SBC compute interest off issue price, so trick for both is to enter electronic bonds twice to get correct issue price.

Paper/electronic denominations. In both, SBW/SBC, may have a problem if paper/electronic denomination/face-value do not match and your electronic purchase differs from what you want to enter. Again trick was to enter multiple bond descriptions until issue price was correct.

Partial redemption. May have an insurmountable tracking problem with both if partial electronic bond redemption planned. Advantage: TD.

Linking SBW/SBC tracking to actual bond. In both, SBW/SBC, use the denomination/description fields to link tracking trick (multiple entries required to track single bond) to actual bond.


See: Savings Bond Wizard: viewtopic.php?t=91562

See: How does the value of my EE Bond grow?: https://www.treasurydirect.gov/indiv/re ... 042005.htm


Both SBW/SBC require internet access: SBW to download update file to locally calculate values, SBC to retrieve remotely calculated values. Both then locally store current bond inventory. I suppose SBW can accurately record new bonds as long as update file remains current, whereas SBC needs an internet connection to record each new bond (unless you want to edit the SBC HTML data file).


So, considering only the three (not aware of any 3rd party applications), the most flexible single-application tracking options seem to be, in order: TD (assumes conversion to electronic bonds), SBC (can track a $10K I bond), SBW.
d.r.a., not dr.a. | I'm a novice investor, you are forewarned.

Carleydm
Posts: 4
Joined: Fri Oct 30, 2015 7:46 am

Re: i and EE bonds tracking and decisions

Post by Carleydm » Sun Nov 01, 2015 8:04 am

friar1610 wrote:Do you have accounts with Vanguard that you can view through their web site? If you do, you can set up an electronic link with Treasury Direct so all your electronic bonds will display there. You can also manually enter the paper bonds and update their values as often as you want (from the bond wizard). You can then see these bonds in the same place you see your mutual funds and have them included in your asset allocation computation as bonds or cash or whatever you consider them to be.

I looked on the vanguard site and could not find where to link my treasury direct account. Could you please share the link to do this? Thanks!!

Topic Author
suzie2012
Posts: 37
Joined: Sat Feb 25, 2012 1:07 am

Re: i and EE bonds tracking and decisions

Post by suzie2012 » Mon Nov 02, 2015 1:05 pm

Thanks for the useful clarifications, dratkinson.

I asked the Treasury how long it takes them to do a conversion of paper bonds to electronic ones after they receive the request and until the electronic bonds show up on their website. Here is the answer:

"We are experiencing a high volume of customer requested transactions. Our current processing time is twelve weeks or longer. We don't know what our processing time will be six months from now. Once bonds are converted you can view the interest rate and interest earned on each security. "

[OT comment removed by admin LadyGeek]

User avatar
dratkinson
Posts: 4760
Joined: Thu Jul 26, 2007 6:23 pm
Location: Centennial CO

Re: i and EE bonds tracking and decisions

Post by dratkinson » Mon Nov 02, 2015 6:15 pm

If you don't need to cash your bonds for 3-4 months, then time shouldn't matter and TD can use that time to convert your bonds, while you continue to earn interest. So 2 birds for 1 stone.

The time you spend to mail/convert your bonds will probably be less then the time I spent redeeming mine locally.
  • It required ~2 hours at a 3rd bank: bank processing + my endorsing each bond.

    This was after I searched to find a bank that would redeem them as both my own, and another from which I purchased bonds (annoying to drive there and learn they sell to non-customers, but don't redeem for non-customers), would not.

    I'm guessing it required ~3 hours, over a week, to redeem my bonds. It required a week because you must return to the bank to get a cashiers check, after TD processes your bonds and sends your money to the bank. But after I made the decision to redeem, I wanted the money now so this was faster than having TD convert them before redeeming.

    Others, customers of banks that do process bonds, report fewer redemption adventures.
So if you don't need the money now, or are a customer of a bank that doesn't process savings bonds, then "2 birds for 1 stone" looks pretty good in comparison.
d.r.a., not dr.a. | I'm a novice investor, you are forewarned.

Topic Author
suzie2012
Posts: 37
Joined: Sat Feb 25, 2012 1:07 am

Re: i and EE bonds tracking and decisions

Post by suzie2012 » Mon Nov 02, 2015 7:57 pm

Looking at the bright side, yes, you are right :D

User avatar
Mel Lindauer
Moderator
Posts: 30039
Joined: Mon Feb 19, 2007 8:49 pm
Location: Daytona Beach Shores, Florida
Contact:

Re: i and EE bonds tracking and decisions

Post by Mel Lindauer » Mon Nov 02, 2015 9:24 pm

Carleydm wrote:
friar1610 wrote:Do you have accounts with Vanguard that you can view through their web site? If you do, you can set up an electronic link with Treasury Direct so all your electronic bonds will display there. You can also manually enter the paper bonds and update their values as often as you want (from the bond wizard). You can then see these bonds in the same place you see your mutual funds and have them included in your asset allocation computation as bonds or cash or whatever you consider them to be.

I looked on the vanguard site and could not find where to link my treasury direct account. Could you please share the link to do this? Thanks!!
You'd make an entry under "Outside Investments" and manually update it as desired. I do a single line entry called "Savings Bonds" and update the total monthly after getting the new values from the Savings Bond Wizard. AFAIK, there is no way to actually link to TD to download the updated values.
Best Regards - Mel | | Semper Fi

Post Reply