June isn't over yet, so June's interest will not show up to July 1.SnowBog wrote: ↑Tue Jun 29, 2021 6:21 pmWouldn't that still be 4+ months? March (purchased anytime in the month counts), April, May, June... 1, 2, 3, 4...anon_investor wrote: ↑Tue Jun 29, 2021 5:30 pmYou're right 4 months have past, unless they were really purchased in March instead of Feb.SnowBog wrote: ↑Tue Jun 29, 2021 5:28 pmI think they are actually past 4 months already...anon_investor wrote: ↑Tue Jun 29, 2021 2:49 pmYou would not see the last 3 months of interest, so until you have accrued 4 motnhs of interest will it show you as having any interest. So you will not see any interest until July 1, and it would only be 1 months worth.
I've got TD synced to Fidelity's "full view" (aka eMoney), and it shows me updates monthly.
But if I recall, when you go to the TD site, the default view only shows what's redeemable (or what was purchased)... At least I'm pretty sure the last time I looked, it showed all my bonds < 1 year as $10k without accrued interest. Seems like I had to click on my bond to get to the details to see how much interest had accrued...
But I might be wrong, as I only login to TD to buy (and eventually sell) bonds...
2021 I Bonds: what's your plan?
- anon_investor
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Re: 2021 I Bonds: what's your plan?
Re: 2021 I Bonds: what's your plan?
OK - so I logged into TD to look... Over the past 2 years I've bought 2 * $10k of EE Bonds and same for I Bonds in my account. The first batch are now > 12 months old...SnowBog wrote: ↑Tue Jun 29, 2021 5:28 pmI think they are actually past 4 months already...anon_investor wrote: ↑Tue Jun 29, 2021 2:49 pmYou would not see the last 3 months of interest, so until you have accrued 4 motnhs of interest will it show you as having any interest. So you will not see any interest until July 1, and it would only be 1 months worth.
I've got TD synced to Fidelity's "full view" (aka eMoney), and it shows me updates monthly.
But if I recall, when you go to the TD site, the default view only shows what's redeemable (or what was purchased)... At least I'm pretty sure the last time I looked, it showed all my bonds < 1 year as $10k without accrued interest. Seems like I had to click on my bond to get to the details to see how much interest had accrued...
But I might be wrong, as I only login to TD to buy (and eventually sell) bonds...
When I log in the "main" page shows:
Code: Select all
Your Current Securities Total: $40,000.00
Code: Select all
SAVINGS BONDS $40,000.00
Code: Select all
Security Type Amount Current Value
Series EE Savings Bond $20,000.00 $20,0xx.00
Series I Savings Bond $20,000.00 $20,xxx.00
Totals: $40,000.00 $40,xxx.00
Bottom line - you need to get below the "main page" in TD to see the interest...
Re: 2021 I Bonds: what's your plan?
Was trying to count my months early... Yep, if purchased in March - they should see it in July...anon_investor wrote: ↑Tue Jun 29, 2021 6:23 pmJune isn't over yet, so June's interest will not show up to July 1.SnowBog wrote: ↑Tue Jun 29, 2021 6:21 pmWouldn't that still be 4+ months? March (purchased anytime in the month counts), April, May, June... 1, 2, 3, 4...anon_investor wrote: ↑Tue Jun 29, 2021 5:30 pm You're right 4 months have past, unless they were really purchased in March instead of Feb.
But if purchased in February as stated - it should be there... As I put in my other post, I think its more likely that they just aren't looking "far" enough into the TD site - as the "home page" doesn't show the interest (or it doesn't for me anyway).
Re: 2021 I Bonds: what's your plan?
anon_investor wrote: ↑Tue Jun 29, 2021 5:30 pmYou're right 4 months have past, unless they were really purchased in March instead of Feb.SnowBog wrote: ↑Tue Jun 29, 2021 5:28 pmI think they are actually past 4 months already...anon_investor wrote: ↑Tue Jun 29, 2021 2:49 pmYou would not see the last 3 months of interest, so until you have accrued 4 motnhs of interest will it show you as having any interest. So you will not see any interest until July 1, and it would only be 1 months worth.
I've got TD synced to Fidelity's "full view" (aka eMoney), and it shows me updates monthly.
But if I recall, when you go to the TD site, the default view only shows what's redeemable (or what was purchased)... At least I'm pretty sure the last time I looked, it showed all my bonds < 1 year as $10k without accrued interest. Seems like I had to click on my bond to get to the details to see how much interest had accrued...
But I might be wrong, as I only login to TD to buy (and eventually sell) bonds...
Thank you,..
Turns out on reflection, reviewing my post history here, and checking the actual source, I purchased my i bonds in March 10K and April 10k (wife).
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Re: 2021 I Bonds: what's your plan?
The interest rate for I Bonds changes every six months, and new rates are announced twice a year, but the actual month of the change depends on when you buy the bond.slinky$ wrote: ↑Fri Jul 02, 2021 5:00 am Have a question re some ibonds I've picked up over the years if anyone can help out:
Why are the interest rates so far off? I know they will have different fixed rates, but assumed they would all have the same inflation rate?
Figured I'd have more of these around 3.54%!
https://www.bogleheads.org/wiki/I_savin ... ings_rates
Your 'October issue' bonds will update to the 3.54%+x 'May rate' in October, and your 'March issue' bond will update to the 3.54%+x rate in September. Until then, they're sill using the 1.68%+x 'November rate' from last year.
Re: 2021 I Bonds: what's your plan?
Gotcha thanks, looking forward to that sweet 3.54% (even if on small amounts lol)
Re: 2021 I Bonds: what's your plan?
I didn't want to start a new thread, but I was just looking...
March CPI is 264.844
July is 273.003
If CPI is unchanged until September, we are going to see over 6% in the next inflation rate update???
March CPI is 264.844
July is 273.003
If CPI is unchanged until September, we are going to see over 6% in the next inflation rate update???
Re: 2021 I Bonds: what's your plan?
Would be interesting if i-bonds with 0% interest base rates paid over 6% for a couple years.
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Re: 2021 I Bonds: what's your plan?
My plan is simple: once I have enough assets that will suffer in inflation, then I will worry about inflation.
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
- anon_investor
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Re: 2021 I Bonds: what's your plan?
Re: 2021 I Bonds: what's your plan?
August CPI is 273.567, which is a shade higher than July. If there's no decline, we should see at least fixed+6.56% on our I-Bonds. (Which is totally depressing, but it's better than my Ally savings account.) Anyone who hasn't purchased for 2021 yet should just go ahead and get the 3.54% rate for 6 months, and then whatever it is (6%+) for the next 6 months.
Re: 2021 I Bonds: what's your plan?
IS the cut off the for 3.54% end of September or end of October?Chuck wrote: ↑Tue Sep 14, 2021 11:50 am August CPI is 273.567, which is a shade higher than July. If there's no decline, we should see at least fixed+6.56% on our I-Bonds. (Which is totally depressing, but it's better than my Ally savings account.) Anyone who hasn't purchased for 2021 yet should just go ahead and get the 3.54% rate for 6 months, and then whatever it is (6%+) for the next 6 months.
Re: 2021 I Bonds: what's your plan?
+1, inquiring minds would like to knowtj wrote: ↑Tue Sep 14, 2021 11:52 amIS the cut off the for 3.54% end of September or end of October?Chuck wrote: ↑Tue Sep 14, 2021 11:50 am August CPI is 273.567, which is a shade higher than July. If there's no decline, we should see at least fixed+6.56% on our I-Bonds. (Which is totally depressing, but it's better than my Ally savings account.) Anyone who hasn't purchased for 2021 yet should just go ahead and get the 3.54% rate for 6 months, and then whatever it is (6%+) for the next 6 months.
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Re: 2021 I Bonds: what's your plan?
End of October. The 'November rate' is announced in mid-October and begins applying to new bonds on the first of November.tj wrote: ↑Tue Sep 14, 2021 11:52 amIS the cut off the for 3.54% end of September or end of October?Chuck wrote: ↑Tue Sep 14, 2021 11:50 am August CPI is 273.567, which is a shade higher than July. If there's no decline, we should see at least fixed+6.56% on our I-Bonds. (Which is totally depressing, but it's better than my Ally savings account.) Anyone who hasn't purchased for 2021 yet should just go ahead and get the 3.54% rate for 6 months, and then whatever it is (6%+) for the next 6 months.
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Re: 2021 I Bonds: what's your plan?
There are non-official internet rate predictions a week or two before the new rate goes into effect that are fairly accurate. But TreasuryDirect (TD) officially announces the new I-Bond rate on the first business date it is effective. May’s rate was announced 5/3/21 and last November’s rate was announced 11/2/20.BrokerageZelda wrote: ↑Tue Sep 14, 2021 11:59 amEnd of October. The 'November rate' is announced in mid-October and begins applying to new bonds on the first of November.tj wrote: ↑Tue Sep 14, 2021 11:52 amIS the cut off the for 3.54% end of September or end of October?Chuck wrote: ↑Tue Sep 14, 2021 11:50 am August CPI is 273.567, which is a shade higher than July. If there's no decline, we should see at least fixed+6.56% on our I-Bonds. (Which is totally depressing, but it's better than my Ally savings account.) Anyone who hasn't purchased for 2021 yet should just go ahead and get the 3.54% rate for 6 months, and then whatever it is (6%+) for the next 6 months.
If you want the current 3.54% rate on new IBond purchases, you’ll need to buy before the Nov. 1 rate is announced. To be safe, initiate your purchase a few business days before the end of October. If you’re new to TD, set up your account in early October in case TD requires you to mail in paperwork with a medallion guarantee to fully open your new TD account.
- anon_investor
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Re: 2021 I Bonds: what's your plan?
Anyone who does not already have a TD account and plans to buy I Bonds before Nov 1, should set up their TD account today. No reason to delay, you may need to get a signature gurantee (it does not have to be a medalliona signature gurantee) to complete opening of the account.HomeStretch wrote: ↑Tue Sep 14, 2021 12:37 pmThere are non-official internet rate predictions a week or two before the new rate goes into effect that are fairly accurate. But TreasuryDirect (TD) officially announces the new I-Bond rate on the first business date it is effective. May’s rate was announced 5/3/21 and last November’s rate was announced 11/2/20.BrokerageZelda wrote: ↑Tue Sep 14, 2021 11:59 amEnd of October. The 'November rate' is announced in mid-October and begins applying to new bonds on the first of November.tj wrote: ↑Tue Sep 14, 2021 11:52 amIS the cut off the for 3.54% end of September or end of October?Chuck wrote: ↑Tue Sep 14, 2021 11:50 am August CPI is 273.567, which is a shade higher than July. If there's no decline, we should see at least fixed+6.56% on our I-Bonds. (Which is totally depressing, but it's better than my Ally savings account.) Anyone who hasn't purchased for 2021 yet should just go ahead and get the 3.54% rate for 6 months, and then whatever it is (6%+) for the next 6 months.
If you want the current 3.54% rate on new IBond purchases, you’ll need to buy before the Nov. 1 rate is announced. To be safe, initiate your purchase a few business days before the end of October. If you’re new to TD, set up your account in early October in case TD requires you to mail in paperwork with a medallion guarantee to fully open your new TD account.
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Re: 2021 I Bonds: what's your plan?
anon_investor wrote: ↑Tue Sep 14, 2021 12:55 pmAnyone who does not already have a TD account and plans to buy I Bonds before Nov 1, should set up their TD account today. No reason to delay, you may need to get a signature gurantee (it does not have to be a medalliona signature gurantee) to complete opening of the account.HomeStretch wrote: ↑Tue Sep 14, 2021 12:37 pmThere are non-official internet rate predictions a week or two before the new rate goes into effect that are fairly accurate. But TreasuryDirect (TD) officially announces the new I-Bond rate on the first business date it is effective. May’s rate was announced 5/3/21 and last November’s rate was announced 11/2/20.BrokerageZelda wrote: ↑Tue Sep 14, 2021 11:59 amEnd of October. The 'November rate' is announced in mid-October and begins applying to new bonds on the first of November.tj wrote: ↑Tue Sep 14, 2021 11:52 amIS the cut off the for 3.54% end of September or end of October?Chuck wrote: ↑Tue Sep 14, 2021 11:50 am August CPI is 273.567, which is a shade higher than July. If there's no decline, we should see at least fixed+6.56% on our I-Bonds. (Which is totally depressing, but it's better than my Ally savings account.) Anyone who hasn't purchased for 2021 yet should just go ahead and get the 3.54% rate for 6 months, and then whatever it is (6%+) for the next 6 months.
If you want the current 3.54% rate on new IBond purchases, you’ll need to buy before the Nov. 1 rate is announced. To be safe, initiate your purchase a few business days before the end of October. If you’re new to TD, set up your account in early October in case TD requires you to mail in paperwork with a medallion guarantee to fully open your new TD account.
Another data point....
I recently set up a TD account. When cutting and pasting my bank account number, I inadvertently lopped off the last digit. TD sent me an email indicating that I'd need a signature guarantee, yada, yada.
I decided to try the 'contact us' link on TD's website and in my comment indicated that there must have been a transcription error when entering my bank info. and that I would greatly appreciate someone calling me to help fix the problem.
About 3 days later received a call from an amazingly competent and nice TD agent who, after verifying my identity, troubleshot the issue and updated my account details while we spoke. I bought my $10K allotment of I Bonds the next morning! No signature guarantee, not trip to the bank, etc.
It seems that they are actually quite responsive when you have a service ticket they can resolve. But best bet is to tread very carefully when setting up your account!
Re: 2021 I Bonds: what's your plan?
As a PSA, the "current" rate when you buy remains in effect for 6 months. So if you buy now or in Oct. you'll have 6 months at the current rate, and whatever the Nov. rate is will kick in 6 months after purchase.
For myself, much like I do buying other assets, I've given up trying to "time" purchases. If I have the money to invest, and this is the asset I'm ready to purchase to maintain my AA (I consider Savings Bonds as part of my fixed income), than I go ahead and purchase. If the rates go up later, I'll eventually get the higher rates (and if they do down, I'll eventually get the lower rates).
For myself, much like I do buying other assets, I've given up trying to "time" purchases. If I have the money to invest, and this is the asset I'm ready to purchase to maintain my AA (I consider Savings Bonds as part of my fixed income), than I go ahead and purchase. If the rates go up later, I'll eventually get the higher rates (and if they do down, I'll eventually get the lower rates).
- FoundingFather
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Re: 2021 I Bonds: what's your plan?
One benefit of investing in I-Bonds is that is allows me to not feel as bad when inflation, or deflation for that matter, occurs. Even though I understand intellectually that inflation is not a good thing for my investments, when the I-Bond rate goes up, the little kid inside of me smiles at the bigger number.
I purchased $20,000 in I-bonds a few months ago, and will purchase another $20,000 after the first of the year.
I purchased $20,000 in I-bonds a few months ago, and will purchase another $20,000 after the first of the year.
"I do not think myself equal to the Command I am honored with." -George Washington (excerpt from Journals of the Continental Congress, 16 June 1775)
Re: 2021 I Bonds: what's your plan?
On the first business day of November at 10:00 AM Eastern TreasuryDirect will announce the I Bond fixed rate effective over the entire 30-year term for purchases during the next six months. No one knows before then what the fixed rate will be. (Most people expect it to remain at 0.00%.) At the same time TD will announce the I Bond inflation rate to be applied to all I Bonds for the six months beginning with each one's semi-anniversary date. Unlike the fixed rate, however, we will know ahead of time what the inflation rate announcement will be.HomeStretch wrote: ↑Tue Sep 14, 2021 12:37 pmThere are non-official internet rate predictions a week or two before the new rate goes into effect that are fairly accurate. But TreasuryDirect (TD) officially announces the new I-Bond rate on the first business date it is effective. May’s rate was announced 5/3/21 and last November’s rate was announced 11/2/20.
Once the September CPI report is released October 13th at 8:30 AM Eastern, compare the non-seasonally adjusted value [*] against March's 264.877 value to determine the inflation rate. For example, if September happened to be the same as August's 273.567, it would be 3.28% (273.567 / 264.877 - 1 rounded to 4 decimal places), and the composite rate for a 0% fixed rate I Bond bought this month would be 6.56% beginning March 2022.
* Click here for the latest CPI news release, and then scroll down to the section, Not seasonally adjusted CPI measures, and look for the CPI-U value. Alternatively click here for a table of the monthly values for the past ten years.
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Re: 2021 I Bonds: what's your plan?
Isn't the annual limit for i-Bonds $10,000? And then you can also buy $10,000 max in EE bonds?FoundingFather wrote: ↑Tue Sep 14, 2021 4:04 pm One benefit of investing in I-Bonds is that is allows me to not feel as bad when inflation, or deflation for that matter, occurs. Even though I understand intellectually that inflation is not a good thing for my investments, when the I-Bond rate goes up, the little kid inside of me smiles at the bigger number.
I purchased $20,000 in I-bonds a few months ago, and will purchase another $20,000 after the first of the year.
- Mel Lindauer
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Re: 2021 I Bonds: what's your plan?
The I Bond annual purchase limit is $10k per SS#, so a couple can buy $20k (or even more if they have a trust). And they can also get another $5k in paper bonds via their joint tax return.JimmyJammy wrote: ↑Sat Sep 18, 2021 12:01 amIsn't the annual limit for i-Bonds $10,000? And then you can also buy $10,000 max in EE bonds?FoundingFather wrote: ↑Tue Sep 14, 2021 4:04 pm One benefit of investing in I-Bonds is that is allows me to not feel as bad when inflation, or deflation for that matter, occurs. Even though I understand intellectually that inflation is not a good thing for my investments, when the I-Bond rate goes up, the little kid inside of me smiles at the bigger number.
I purchased $20,000 in I-bonds a few months ago, and will purchase another $20,000 after the first of the year.
Best Regards - Mel |
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- FoundingFather
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Re: 2021 I Bonds: what's your plan?
Sorry that my sloppy language led to confusion. Mel is correct - I bought $20,000 in I Bonds by purchasing $10K for my wife and $10k for myself.Mel Lindauer wrote: ↑Sat Sep 18, 2021 12:14 amThe I Bond annual purchase limit is $10k per SS#, so a couple can buy $20k (or even more if they have a trust). And they can also get another $5k in paper bonds via their joint tax return.JimmyJammy wrote: ↑Sat Sep 18, 2021 12:01 amIsn't the annual limit for i-Bonds $10,000? And then you can also buy $10,000 max in EE bonds?FoundingFather wrote: ↑Tue Sep 14, 2021 4:04 pm One benefit of investing in I-Bonds is that is allows me to not feel as bad when inflation, or deflation for that matter, occurs. Even though I understand intellectually that inflation is not a good thing for my investments, when the I-Bond rate goes up, the little kid inside of me smiles at the bigger number.
I purchased $20,000 in I-bonds a few months ago, and will purchase another $20,000 after the first of the year.
Founding Father
"I do not think myself equal to the Command I am honored with." -George Washington (excerpt from Journals of the Continental Congress, 16 June 1775)
Re: 2021 I Bonds: what's your plan?
I want to use $20k (wife and I) to buy iBonds this year. What is the potential advantage or disadvantage to waiting a few more weeks to November for the updated rate?
Thanks
Thanks
Re: 2021 I Bonds: what's your plan?
My understanding is there is no advantage to waiting since the fixed rate is highly unlikely to move above zero.
You will receive six months interest at 3.54% and then six months beyond that you will receive the Nov 1 rate. The disadvantage to waiting is pushing back the 12-month lockup on your cash by an additional six weeks or so.
Re: 2021 I Bonds: what's your plan?
If you hold the bonds for a long time, the difference probably is negligible unless the fixed rate for the Nov 2021-April 2022 issue is significantly above 0%. Keep in mind that if you buy now and the fixed rates go up in November, you can simply buy more I-Bonds in January 2022. If you plan to purchase I-Bonds only once, you can split the difference and buy half now, half in Nov.
If you keep your I-Bond money as cash until November, you miss out on earning interest for September and October. Also, locking in the 3.54% rate for 6 months is way better than any CD or HYSA right now. But over 20 years, we're talking about a couple percent difference either way.
May all your index funds gain +0.5% today.
- AnnetteLouisan
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Re: 2021 I Bonds: what's your plan?
Same here, I was planning to get in in January. Has anyone done the extra $5k through the tax refund? What are the mechanics? I bought my first ever I bond in May.Pizza_and_Beer wrote: ↑Tue Dec 22, 2020 8:43 am+1z3r0c00l wrote: ↑Tue Dec 22, 2020 8:30 am I don't think the odds of a fixed rate increase are very good and so will buy as soon as possible. It is a good rate of return compared to almost anything safe and the sooner you buy, the sooner you can redeem it without 1 year lockup or 5 year EWP. Just a funny coincidence, I bonds currently pay the same as 30 year treasuries without the significant volatility of the latter. And if inflation kicks up your I bonds get paid more without a cent of harm to the principal.
Had a sudden, unexpected expense this month that may force me to wait until February, else my plan is to buy at the end of January using funds that now earn a sad .5% in a bank account.
- AnnetteLouisan
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Re: 2021 I Bonds: what's your plan?
This HMBradley account is new to me. It seems its a 2020 start up and is invitation only?mhop wrote: ↑Wed Mar 24, 2021 12:13 pmDon't get me wrong, I buy some I-bonds with my paycheck each month so I don't think it's a bad idea to move the money there. I also have rewards checking accounts and a HMBradley account for their 3% returns.cork wrote: ↑Wed Mar 24, 2021 11:13 am I've read (almost) all the posts in this thread, and I believe my decision should be pretty straight forward. However, I'd like to run it by the forum for confirmation.
My wife and I had a CD mature that had a great interest rate. So now we have $20K available to put somewhere "safe", as part of our emergency fund.
We have maxed out our IRA contributions for the year, and the online bank we use offers between .5% and around .6% for savings or CD's.
Since the I Bond is currently at 1.68%, and we should have enough readily available cash in our EF, I am thinking of putting the 20K ( 10K each of us) into the I Bonds. Preferably by the end of this month, to get the 1 year clock started.
Thoughts or suggestions welcome.
Or should I start a new thread?
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Re: 2021 I Bonds: what's your plan?
Check the posts on the 1st page of this thread. One of them has a link to another thread that goes through the process.AnnetteLouisan wrote: ↑Sun Sep 19, 2021 10:41 am … Has anyone done the extra $5k through the tax refund? What are the mechanics? …
- Mel Lindauer
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Re: 2021 I Bonds: what's your plan?
IMO, there's absolutely no reason to wait. If you buy now, you'll get the current 3.54% for six months and then the expected higher rate for the next six months. Since you'll enjoy TWO good rates with ALL of your money, why would you even consider waiting if you have the funds now?
Best Regards - Mel |
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Semper Fi
- anon_investor
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Re: 2021 I Bonds: what's your plan?
+1, absolutely 0 reason to wait. Buy $20k now. Buy $20k in January!Mel Lindauer wrote: ↑Sun Sep 19, 2021 10:43 pmIMO, there's absolutely no reason to wait. If you buy now, you'll get the current 3.54% for six months and then the expected higher rate for the next six months. Since you'll enjoy TWO good rates with ALL of your money, why would you even consider waiting if you have the funds now?
- Mel Lindauer
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Re: 2021 I Bonds: what's your plan?
Agree. Rinse and repeat again towards the end of Jan. (Remember, as long as you own them on the last day of the month, you'll earn a full month's interest.)anon_investor wrote: ↑Sun Sep 19, 2021 11:23 pm+1, absolutely 0 reason to wait. Buy $20k now. Buy $20k in January!Mel Lindauer wrote: ↑Sun Sep 19, 2021 10:43 pmIMO, there's absolutely no reason to wait. If you buy now, you'll get the current 3.54% for six months and then the expected higher rate for the next six months. Since you'll enjoy TWO good rates with ALL of your money, why would you even consider waiting if you have the funds now?
Best Regards - Mel |
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Semper Fi
- anon_investor
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Re: 2021 I Bonds: what's your plan?
That's my plan, I just wish I had known about I Bonds BEFORE 2020! At least my 2020 purchase has a 0.2% fixed rate! Probably nothing compared to folks who have been buying for many years!Mel Lindauer wrote: ↑Sun Sep 19, 2021 11:29 pmAgree. Rinse and repeat again towards the end of Jan. (Remember, as long as you own them on the last day of the month, you'll earn a full month's interest.)anon_investor wrote: ↑Sun Sep 19, 2021 11:23 pm+1, absolutely 0 reason to wait. Buy $20k now. Buy $20k in January!Mel Lindauer wrote: ↑Sun Sep 19, 2021 10:43 pmIMO, there's absolutely no reason to wait. If you buy now, you'll get the current 3.54% for six months and then the expected higher rate for the next six months. Since you'll enjoy TWO good rates with ALL of your money, why would you even consider waiting if you have the funds now?
Re: 2021 I Bonds: what's your plan?
I agree 100%, but for those folks that struggle making that decision I am offering an alternative that they may find more acceptable to their emotions. Not saying they should feed their emotions, but some people just can't avoid that need. Similar to those lump sum vs DCA decision that some people struggle with in making a decision.Mel Lindauer wrote: ↑Sun Sep 19, 2021 10:43 pmIMO, there's absolutely no reason to wait. If you buy now, you'll get the current 3.54% for six months and then the expected higher rate for the next six months. Since you'll enjoy TWO good rates with ALL of your money, why would you even consider waiting if you have the funds now?
- Mel Lindauer
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Re: 2021 I Bonds: what's your plan?
Yes, as you pointed out, it's really a personal decision, and it's better to do it that way than not at all (analysis paralysis). However, normally the only reason to wait when you have the money, given the current scenario, would be if one expects the fixed rate to go up. And if someone believes that, they probably also believe in the tooth fairy.Eagle33 wrote: ↑Mon Sep 20, 2021 2:38 pmI agree 100%, but for those folks that struggle making that decision I am offering an alternative that they may find more acceptable to their emotions. Not saying they should feed their emotions, but some people just can't avoid that need. Similar to those lump sum vs DCA decision that some people struggle with in making a decision.Mel Lindauer wrote: ↑Sun Sep 19, 2021 10:43 pmIMO, there's absolutely no reason to wait. If you buy now, you'll get the current 3.54% for six months and then the expected higher rate for the next six months. Since you'll enjoy TWO good rates with ALL of your money, why would you even consider waiting if you have the funds now?
Best Regards - Mel |
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Semper Fi
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Re: 2021 I Bonds: what's your plan?
As long as we're talking I Bonds, I'm having some trouble figuring out this part from the wiki, specifically the bolded part:
"Interest accrues monthly and compounds semiannually.[1] The accrual date is the first of the month, and the redemption value does not change between accrual dates.[2] This means that on each 6th month anniversary of the issue date the value of the bond is increased by the interest earned during that 6 month period. However, until the bond is owned for 5 years, the value of the bond is reduced by the latest 3 months worth of interest which is a penalty for selling early. After 5 years of ownership there is no penalty and the full value of interest earned is included in the bond value shown on the Treasury Direct site. An additional restriction is that the bond may not be redeemed until it has been held for 12 months."
I can't reconcile the interest accruing monthly but the redemption value changing every 6 months. Say the composite rate is 4%/year and the redemption value updates 1/1 to $1,000. If I redeem the bond on 4/1 what amount do I get?
Edit: after reading that a few more times I think I maybe get it? So in my example I would get the $1,000 value of the bond plus the three months of simple interest earned for a total of $1,010.
"Interest accrues monthly and compounds semiannually.[1] The accrual date is the first of the month, and the redemption value does not change between accrual dates.[2] This means that on each 6th month anniversary of the issue date the value of the bond is increased by the interest earned during that 6 month period. However, until the bond is owned for 5 years, the value of the bond is reduced by the latest 3 months worth of interest which is a penalty for selling early. After 5 years of ownership there is no penalty and the full value of interest earned is included in the bond value shown on the Treasury Direct site. An additional restriction is that the bond may not be redeemed until it has been held for 12 months."
I can't reconcile the interest accruing monthly but the redemption value changing every 6 months. Say the composite rate is 4%/year and the redemption value updates 1/1 to $1,000. If I redeem the bond on 4/1 what amount do I get?
Edit: after reading that a few more times I think I maybe get it? So in my example I would get the $1,000 value of the bond plus the three months of simple interest earned for a total of $1,010.
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Re: 2021 I Bonds: what's your plan?
It looks like the wiki text is a mix of the earning rules for old and new EE Bonds.SmallSaver wrote: ↑Mon Sep 20, 2021 4:38 pm As long as we're talking I Bonds, I'm having some trouble figuring out this part from the wiki, specifically the bolded part:
"Interest accrues monthly and compounds semiannually.[1] The accrual date is the first of the month, and the redemption value does not change between accrual dates.[2] This means that on each 6th month anniversary of the issue date the value of the bond is increased by the interest earned during that 6 month period. However, until the bond is owned for 5 years, the value of the bond is reduced by the latest 3 months worth of interest which is a penalty for selling early. After 5 years of ownership there is no penalty and the full value of interest earned is included in the bond value shown on the Treasury Direct site. An additional restriction is that the bond may not be redeemed until it has been held for 12 months."
I can't reconcile the interest accruing monthly but the redemption value changing every 6 months. Say the composite rate is 4%/year and the redemption value updates 1/1 to $1,000. If I redeem the bond on 4/1 what amount do I get?
https://www.treasurydirect.gov/indiv/re ... nvalue.htm
EE Bonds issued before May 1997 have interest credited every six months, but those issued May 1997 and after earn interest monthly.
All I Bonds earn interest monthly.
https://www.treasurydirect.gov/indiv/re ... dterms.htm
Re: 2021 I Bonds: what's your plan?
When it comes to EE Bonds, the ONLY thing that's relevant to me is the 20-year doubling; the minuscule fixed rate is irrelevant.BrokerageZelda wrote: ↑Mon Sep 20, 2021 4:48 pmIt looks like the wiki text is a mix of the earning rules for old and new EE Bonds.
https://www.treasurydirect.gov/indiv/re ... nvalue.htm
EE Bonds issued before May 1997 have interest credited every six months, but those issued May 1997 and after earn interest monthly.
All I Bonds earn interest monthly.
https://www.treasurydirect.gov/indiv/re ... dterms.htm
Re: 2021 I Bonds: what's your plan?
The wiki passage you quoted leaves out a key word. The actual text on the TD site states, "...the principal value of the bond is increased..." So each month the bond accrues simple interest on the current "principal value," which is reset every 6 months to include all prior interest paid ("compounds semiannually"). But the redemption value at any time is equal to the principal value plus any subsequent monthly interest (less any penalties if held <5 years).BrokerageZelda wrote: ↑Mon Sep 20, 2021 4:48 pmIt looks like the wiki text is a mix of the earning rules for old and new EE Bonds.SmallSaver wrote: ↑Mon Sep 20, 2021 4:38 pm As long as we're talking I Bonds, I'm having some trouble figuring out this part from the wiki, specifically the bolded part:
"Interest accrues monthly and compounds semiannually.[1] The accrual date is the first of the month, and the redemption value does not change between accrual dates.[2] This means that on each 6th month anniversary of the issue date the value of the bond is increased by the interest earned during that 6 month period. However, until the bond is owned for 5 years, the value of the bond is reduced by the latest 3 months worth of interest which is a penalty for selling early. After 5 years of ownership there is no penalty and the full value of interest earned is included in the bond value shown on the Treasury Direct site. An additional restriction is that the bond may not be redeemed until it has been held for 12 months."
I can't reconcile the interest accruing monthly but the redemption value changing every 6 months. Say the composite rate is 4%/year and the redemption value updates 1/1 to $1,000. If I redeem the bond on 4/1 what amount do I get?
https://www.treasurydirect.gov/indiv/re ... nvalue.htm
EE Bonds issued before May 1997 have interest credited every six months, but those issued May 1997 and after earn interest monthly.
All I Bonds earn interest monthly.
https://www.treasurydirect.gov/indiv/re ... dterms.htm
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Re: 2021 I Bonds: what's your plan?
I got all the way through to the end of my tax software (Tax Hawk), anticipating a refund that I could turn into a paper I Bond that I could add to my 2020 bucket of I Bond purchases only to learn that this software does not support that....I suppose when I file for 2021, hopefully not later than early February 2022, I can pad the Treasury Direct account.
It never occurred to me that a tax software package would not be able to accomodate the simple prep of Form 8888.
For all who prepare their own...be aware of this. I have no idea if this is an issue with other tax software packages.
It never occurred to me that a tax software package would not be able to accomodate the simple prep of Form 8888.
For all who prepare their own...be aware of this. I have no idea if this is an issue with other tax software packages.
How many retired people does it take to screw in a lightbulb? Only one, but he takes all day.
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Re: 2021 I Bonds: what's your plan?
I want to use $20k (wife and I) to buy iBonds this year. What is the potential advantage or disadvantage to waiting a few more weeks to November for the updated rate?
It wouldn't be too hard to estimate this...what's the money earning right now vs. the current I bond rate...vs the expected rate in November - then add in the 6 month factor.
Ultimately it also depends on when you think you might be cashing the bonds in.
It wouldn't be too hard to estimate this...what's the money earning right now vs. the current I bond rate...vs the expected rate in November - then add in the 6 month factor.
Ultimately it also depends on when you think you might be cashing the bonds in.
How many retired people does it take to screw in a lightbulb? Only one, but he takes all day.
- neurosphere
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Re: 2021 I Bonds: what's your plan?
Asking this question again to see if anyone has an opinion (hope I didn't miss a previous answer). I have two active schedule c business, each with it's own EIN. Anyone see a reason I cannot buy $10,000 in I-bonds through each entity?neurosphere wrote: ↑Wed May 26, 2021 4:46 pm I know people with TWO LLCs. E.g. ME. Does that mean I can buy $40,000 in online I-bonds (me, spouse, LLC#1, LLC#2)? I'm seriously considering opening a new TD account for my LLC, buying bonds, and "seeing what happens".
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes" (even in taxable accounts).
- Mel Lindauer
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Re: 2021 I Bonds: what's your plan?
Yes, it's based on the month of purchase, not the date. So bonds owned (purchased) at the end of a month earn a full month's worth of interest. And bonds should be redeemed at the beginning of the month you plan to redeem them, since you won't earn any additional interest if you don't own them on the last day of that month.billthecat wrote: ↑Thu Dec 24, 2020 12:00 pmI've wondered this myself but I think the answer is the first of the month - i.e., the start date of the bonds, regardless of when you purchased them during the month. TreasuryDirect says "After they are 12 months old." But I'm not sure.ImUrHuckleberry wrote: ↑Thu Dec 24, 2020 11:49 amThanks. I wasn't aware of that, but the money is sitting in our checking account doing nothing so I'll probably just go ahead on the 4th anyway. But this is good to know for the future.Mel Lindauer wrote: ↑Thu Dec 24, 2020 11:40 amThere's no rush. You'll earn the same amount of interest for January as long as you purchase your I Bonds any time prior to the end of the month.ImUrHuckleberry wrote: ↑Thu Dec 24, 2020 9:12 am We're going to buy the full amount for me and my wife on Jan 4th. I'm moving part of the EF into I-Bonds (keeping 3 or 4 months in cash) so I want to get the 1 year counter ticking.
Does the 1 year count start on the day invested or at the end of the month? That is the primary reason I want to put it in right away.
Best Regards - Mel |
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Semper Fi
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Re: 2021 I Bonds: what's your plan?
I don’t see an issue purchasing I-Bonds as you propose. In 2021 I purchased $40k in electronic I-Bonds using two individual accounts and two entity accounts for trusts (not LLCs) for spouse and me without any issue.neurosphere wrote: ↑Wed Sep 29, 2021 11:45 amAsking this question again to see if anyone has an opinion (hope I didn't miss a previous answer). I have two active schedule c business, each with it's own EIN. Anyone see a reason I cannot buy $10,000 in I-bonds through each entity?neurosphere wrote: ↑Wed May 26, 2021 4:46 pm I know people with TWO LLCs. E.g. ME. Does that mean I can buy $40,000 in online I-bonds (me, spouse, LLC#1, LLC#2)? I'm seriously considering opening a new TD account for my LLC, buying bonds, and "seeing what happens".
You may want to ask TD whether or not the TD entity account can remain open if in the future you close the LLCs / EINs or no longer have a linked bank account in the LLC’s name. If not, would the I-Bonds have to be redeemed or could they be transferred to your individual accounts. I don’t see this addressed in the TD entity account FAQs.
Re: 2021 I Bonds: what's your plan?
The i-Bonds fixed interest rate reset in end Oct right? Is anyone waiting till after Oct to purchase in the chance that the fixed rate might go up? Inflation is coming so fixed rates should go up?
Re: 2021 I Bonds: what's your plan?
The fixed rate does not tie to inflation. The variable rate is actually called the inflation rate so that is the component tied to inflation (CPI-U), while the fixed rate is separated from the inflation/variable component.
There is not an official published formula for the fixed rate, but history shows that it is correlated to TIPS real yields. TIPS real yield is still negative so I think it is relatively safe to expect no increase to fixed rate (Treasury does not seem to allow fixed rate to go below zero, normally fixed rate is a little less than TIPS real yield rates).
Re: 2021 I Bonds: what's your plan?
Yes, I am waiting to see if fixed rate will increase from 0, though seems unlikely, before buying this year's max limit. Over 30 years of bond life positive fixed rate, however small, has larger impact than just forgoing 10 months worth of gains this year waiting to buy.