more great service from Treasury Direct!

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towdie
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more great service from Treasury Direct!

Post by towdie »

I sent in the required forms to change my bank information more than a month ago and it still has not been done! If it ever is, I think that I am going to sell all of my IBonds just to avoid having to deal with Treasury direct!
“The only thing to do with good advice is to pass it on. It is never of any use to oneself.”
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Igglesman
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Re: more great service from Treasury Direct!

Post by Igglesman »

towdie wrote:I sent in the required forms to change my bank information more than a month ago and it still has not been done! If it ever is, I think that I am going to sell all of my IBonds just to avoid having to deal with Treasury direct!
I agree...the downside of dealing with Treasury Direct outweighs any benefits. Soon as I am penalty free, I am going to cancel all my doings with them.
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BL
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Re: more great service from Treasury Direct!

Post by BL »

I made my second purchase from them on Monday and it went very smoothly and quickly. I was a little apprehensive after all the comments on this site, but all went well. It went so fast that if I had put the wrong amount in, I would not have had a second chance to correct it. I printed out the directions for redeeming them and will file that with TD information. I have not tried to change anything.
zotty
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Re: more great service from Treasury Direct!

Post by zotty »

To me, the value proposition outweighs the headaches. I manage 3 accounts and will continue to feed money until something else provides a better investment value.
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tetractys
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Re: more great service from Treasury Direct!

Post by tetractys »

towdie wrote:I sent in the required forms to change my bank information more than a month ago and it still has not been done!
Shoot TD an email and ask what's going on. Then let us know; maybe we can learn something. -- Tet
Topic Author
towdie
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Re: more great service from Treasury Direct!

Post by towdie »

I have both emailed and called them to no avail!
“The only thing to do with good advice is to pass it on. It is never of any use to oneself.”
mholdi1540
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Re: more great service from Treasury Direct!

Post by mholdi1540 »

Hold on for now to Td. When I fist joined 3 years ago it was a little frustrating and it did take awhile to get things straightened out mainly mistakes of my own. Recently, Td made changes for security such that you will get a code number good only for 2 hours before it expires and it took a few times to get that right too. However, I feel it is still worth your time for they keep all the records for you for free (until you exceed I believe $100,000.00) and you do not have to worry about losing paper bonds. You are not going to be able to get USA I-bonds anywhere else except through Td and even though rates are low you still have inflation protection, as best as it can get by the USA, and it can be good for up to 30 years before you have to pay taxes. Inflation will also probably start to change toward the end of 2014. So continue to work with TD for it use gets easier with time and as far as the inflation rate and keeping up with it read Zvi Bodie's and Erin Botsworth most recent 2 books about I-bonds and TIPS; they are real eye openers if you are a conservative investor. If it is safety you want with inflation protection you want backed by the USA government you will have a better understanding after reading their books. Good luck !!!
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NAVigator
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Re: more great service from Treasury Direct!

Post by NAVigator »

Yet another thread to bash TD. Few people ever start a thread to sing the praises of an organization. After reading many similar complaints, I cashed out of TD last year. Then within a couple of weeks they changed from the decoder card to the present system. I really regret that I succumbed to the complaints of others. I have since bought the maximum for 2011 and 2012. Now I make up my own mind about things, including my impression that this forum often gets messages from people who just want to vent.

I have never had a problem with TD operations or their website. I am sorry that some people had difficulty. I hope there is some therapeutic value in a good rant. I also hope that people aren't discouraged from using TD like what happened to me.

Jerry
"I was born with nothing and I have most of it left."
Topic Author
towdie
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Re: more great service from Treasury Direct!

Post by towdie »

You might not feel that it is a "therapeutic rant" if you needed access to your money and can't get it! :(
“The only thing to do with good advice is to pass it on. It is never of any use to oneself.”
beardsworth
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Re: more great service from Treasury Direct!

Post by beardsworth »

mholdi1540 wrote:Hold on for now to Td. When I fist joined 3 years ago it was a little frustrating and it did take awhile to get things straightened out mainly mistakes of my own. Recently, Td made changes for security such that you will get a code number good only for 2 hours before it expires and it took a few times to get that right too. However, I feel it is still worth your time for they keep all the records for you for free (until you exceed I believe $100,000.00) and you do not have to worry about losing paper bonds. You are not going to be able to get USA I-bonds anywhere else except through Td and even though rates are low you still have inflation protection, as best as it can get by the USA, and it can be good for up to 30 years before you have to pay taxes. Inflation will also probably start to change toward the end of 2014. So continue to work with TD for it use gets easier with time and as far as the inflation rate and keeping up with it read Zvi Bodie's and Erin Botsworth most recent 2 books about I-bonds and TIPS; they are real eye openers if you are a conservative investor. If it is safety you want with inflation protection you want backed by the USA government you will have a better understanding after reading their books. Good luck !!!
I'm not posting here to discuss the thread's general theme about Treasury Direct service or problems but, rather, to take issue with the sentence I've made bold above, which I believe has the situation backwards:

•Treasury Direct does in fact "keep all the records" of a customer's online I Bond purchases. But it keeps them only online. It issues no purchase confirmations by mail, no redemption confirmations by mail, no quarterly or annual portfolio holding statements by mail, and no year-end Form 1099 tax form by mail during a year in which the customer made a redemption. Since there is no other record that the portfolio even exists, prudent I Bond holders should maintain their own list of holdings, with serial numbers, in a secure place, for their own records and/or for their heirs (because, as as been pointed out in other threads on this forum, if an I Bond holder dies without having left heirs some sort of "paper trail," the heirs may never know that bond holdings existed).

•No one needs to worry about losing paper I Bonds--because paper I bonds were, and are, replaceable if lost or stolen. (Prudent people will, of course, have kept a list of their paper I Bond holdings, by amount, issue date, and serial number.) It is electronic I bonds which the customer has to "worry about losing"--because Treasury has made clear that it takes no responsibility for "making the customer whole" for any loss in an electronic account, and that apparently includes even losses due to fraud/hacking/criminal activity. The Treasury Direct "Terms of Use" state that "If you use this site, you are responsible for maintaining the confidentiality of your account, password and for restricting access to your computer. You also agree to assume responsibility for all activities that occur under any account or password that you maintain for electronic commerce with Treasury or B[ureau of]P[ublic]D[ebt].

http://www.treasurydirect.gov/terms.htm

•The only account maintenance fee of which I'm aware, concerning accounts with holdings over $100,000, related to the program for buying Treasury securities by mail or phone, a program now called Legacy Treasury Direct. But that is not the program involved in online purchase and redemption of current I Bonds. See the paragraphs in the link below under the headings "What services does Treasury Direct offer?" and "What services does Legacy Treasury Direct offer?" and also the notation, a few paragraphs up the page, that "Legacy Treasury Direct is being phased out."

http://www.treasurydirect.gov/instit/re ... basics.htm

Marc
Muchtolearn
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Re: more great service from Treasury Direct!

Post by Muchtolearn »

zotty wrote:To me, the value proposition outweighs the headaches. I manage 3 accounts and will continue to feed money until something else provides a better investment value.
To me the headaches outweigh the value propositions. Who needs to deal with this for a few thousand dollars of investment allowed in I bonds. If you want treasuries, Vanguard will buy them for you at auction for free.
FinanceFun
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Re: more great service from Treasury Direct!

Post by FinanceFun »

I'll buy iBonds when they are available through my brokerage. Paying a commission is better then dealing with government designed web programming.... If the USSR taught us anything, it's that private enterprise does it better....
beardsworth
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Re: more great service from Treasury Direct!

Post by beardsworth »

Muchtolearn wrote:If you want treasuries, Vanguard will buy them for you at auction for free.
Yes, but "free" may depend on the type of purchase and/or your status (Flagship, etc.) with Vanguard. And the bonds in question cannot be Series I Savings Bonds (which can only be bought direct from Treasury, not through brokerage firms); will have a secondary market price, which may fluctuate up or down with interest rate movements in the bond markets; may bring a price worth more or less than their original purchase price if sold before maturity; and their dividend payments will be subject to pay-as-you-go income taxes unless held in a retirement account screened from current taxation.

I Bonds, by contrast, have no secondary market price, never lose their previously accrued value at any time regardless of what is going on in bond markets, and automatically defer taxes on interest earnings (unless the customer specifically chooses to pay them along the way) even if held outside a retirement account. For those who qualify and register them appropriately, I Bonds can also be redeemed to pay certain children's educational expenses free of any taxation at all.

So in many people's portfolios, this can be a choice of "both/and" rather than "either/or."

Unless Vanguard Brokerage Services has changed its policy, the minimum purchase per transaction for Treasury bonds at original auction is 10 bonds, i.e., $10,000. I Bonds, on the other hand, can be bought or redeemed electronically in smaller amounts, although with an annual purchase limit per person.
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tetractys
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Re: more great service from Treasury Direct!

Post by tetractys »

MarcMyWord wrote:•No one needs to worry about losing paper I Bonds--because paper I bonds were, and are, replaceable if lost or stolen. (Prudent people will, of course, have kept a list of their paper I Bond holdings, by amount, issue date, and serial number.) It is electronic I bonds which the customer has to "worry about losing"--because Treasury has made clear that it takes no responsibility for "making the customer whole" for any loss in an electronic account, and that apparently includes even losses due to fraud/hacking/criminal activity. The Treasury Direct "Terms of Use" state that "If you use this site, you are responsible for maintaining the confidentiality of your account, password and for restricting access to your computer. You also agree to assume responsibility for all activities that occur under any account or password that you maintain for electronic commerce with Treasury or B[ureau of]P[ublic]D[ebt].
The numbers show differently. According to the Treasury, something like $18,000,000 of paper savings bonds have disappeared--or is that $18,000,000,000? Concerning TD's disclaimer quoted above: Common sense should tell any reasonable person that this statement of account holder responsibility is essential for the security of TD accounts rather than a cause for concern about loss. It's analogous to a parent teaching their children to look both ways before crossing the street. The small children don't look, they get run over/You publish all your security and bank info, it will get exploited. And as has happened already to paper savings bond holders who didn't take care of their paper savings bonds, they disappear. -- Tet
rustymutt
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Re: more great service from Treasury Direct!

Post by rustymutt »

towdie wrote:I sent in the required forms to change my bank information more than a month ago and it still has not been done! If it ever is, I think that I am going to sell all of my IBonds just to avoid having to deal with Treasury direct!
Thanks for reminding me. I went in and bought 10K for me, and 10k for my wife. We love it. The website hasn't given us anymore issues since they changed security methods.
Even educators need education. And some can be hard headed to the point of needing time out.
zotty
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Re: more great service from Treasury Direct!

Post by zotty »

rustymutt wrote: Thanks for reminding me. I went in and bought 10K for me, and 10k for my wife. We love it. The website hasn't given us anymore issues since they changed security methods.
+1. I maxed out this month for me and my better half. Maxed out last September too.

Inflation protected, principal protected, tax deferred goodness. It is a hassle. I don't think my dad could hack it either. 10K here, 10K there, secret decoder rings, he'd go crazy.

BUT that 4.6% was a great return, and 3.06% is nothing to sneeze at either.
Nadie Sabe Nada
beardsworth
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Re: more great service from Treasury Direct!

Post by beardsworth »

tetractys wrote:
MarcMyWord wrote:•No one needs to worry about losing paper I Bonds--because paper I bonds were, and are, replaceable if lost or stolen. (Prudent people will, of course, have kept a list of their paper I Bond holdings, by amount, issue date, and serial number.) It is electronic I bonds which the customer has to "worry about losing"--because Treasury has made clear that it takes no responsibility for "making the customer whole" for any loss in an electronic account, and that apparently includes even losses due to fraud/hacking/criminal activity. The Treasury Direct "Terms of Use" state that "If you use this site, you are responsible for maintaining the confidentiality of your account, password and for restricting access to your computer. You also agree to assume responsibility for all activities that occur under any account or password that you maintain for electronic commerce with Treasury or B[ureau of]P[ublic]D[ebt].
The numbers show differently. According to the Treasury, something like $18,000,000 of paper savings bonds have disappeared--or is that $18,000,000,000? Concerning TD's disclaimer quoted above: Common sense should tell any reasonable person that this statement of account holder responsibility is essential for the security of TD accounts rather than a cause for concern about loss. It's analogous to a parent teaching their children to look both ways before crossing the street. The small children don't look, they get run over/You publish all your security and bank info, it will get exploited. And as has happened already to paper savings bond holders who didn't take care of their paper savings bonds, they disappear. -- Tet
Tet, I think I already dealt with both of your points:

•by saying that prudent person will compile a secured list of paper bond holdings, i.e., not just rely on the paper bonds themselves for proof of their existence and denominations--a list which can be used if the bonds need to be replaced, or which can document the holdings for the "discovery" by heirs

•by observing that Treasury Direct take no responsibility for losses in an electronic account, regardless of cause. Yes, of course, the account holder should be very responsible and secretive about the access codes. But imagine a situation in which no one ever had access to the account holder's computer (or the password information wasn't stored there to begin with), never shared the codes with anyone, had appropriate security software on the computer, never took the computer out of the house, never used any other computer for account access, and yet somehow criminals hack into the account and clean it out. (No, I don't know how that might be possible, but when we see recent stories about hacking of systems at the CIA--the CIA!!, for heaven's sake--it's certainly not beyond possibility at Treasury Direct.) Treasury Direct's response to the customer would still be some version of "tough luck, buddy." I buy I Bonds, and I safeguard all the information, but I'm quite bothered by the fact that Treasury Direct takes no formal responsibility for the integrity of its own systems and offloads the entire risk of loss onto the customer--a situation which did not exist when lost or stolen paper bonds were replaceable.
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Re: more great service from Treasury Direct!

Post by Carl53 »

MarcMyWord wrote: •Treasury Direct does in fact "keep all the records" of a customer's online I Bond purchases. But it keeps them only online. It issues no purchase confirmations by mail, no redemption confirmations by mail, no quarterly or annual portfolio holding statements by mail, and no year-end Form 1099 tax form by mail during a year in which the customer made a redemption. Since there is no other record that the portfolio even exists, prudent I Bond holders should maintain their own list of holdings, with serial numbers, in a secure place, for their own records and/or for their heirs (because, as as been pointed out in other threads on this forum, if an I Bond holder dies without having left heirs some sort of "paper trail," the heirs may never know that bond holdings existed).
My bold in the above quote. My experience with TD is that no serial numbers are issued for Ibonds. I think I would have felt better about my purchases had I been provided a serial number and had the option to split up the purchase into multiple bonds. Yes, I printed off a copy of the receipt of purchase, but it looks rather generic, just stating that it was a I bond savings bond purchase of X thousand dollars, on a specific date with the code IAAAB after the date. Yes it does have my and my wife's names and partial SS numbers and my TD account number on it. I fail to see why TD would not issue a specific serial number for the bond, but apparently those went the way of paper bonds.

Perhaps the IAAAB is the serial number, as I see the one I purchased last year is shown as IAAAA. Not very impressive compared to the many digit serial number of the old paper bonds.
bmelikia
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Re: more great service from Treasury Direct!

Post by bmelikia »

I have enjoyed my TD experience so far. . .I've had an account since 2009 and it has been a great tool to acquire more I Bonds. . .

Any issues I've had have been the result of my own mistakes in using the website

I feel that most complaints I've seen on here are the result of user error
"I would rather die with money, than live without it...." - Bogleheads member Ron | | "The greatest enemy of a good plan, is the dream of a perfect plan." | -Bogle
beardsworth
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Re: more great service from Treasury Direct!

Post by beardsworth »

Carl53 wrote:
MarcMyWord wrote: •Treasury Direct does in fact "keep all the records" of a customer's online I Bond purchases. But it keeps them only online. It issues no purchase confirmations by mail, no redemption confirmations by mail, no quarterly or annual portfolio holding statements by mail, and no year-end Form 1099 tax form by mail during a year in which the customer made a redemption. Since there is no other record that the portfolio even exists, prudent I Bond holders should maintain their own list of holdings, with serial numbers, in a secure place, for their own records and/or for their heirs (because, as as been pointed out in other threads on this forum, if an I Bond holder dies without having left heirs some sort of "paper trail," the heirs may never know that bond holdings existed).
My bold in the above quote. My experience with TD is that no serial numbers are issued for Ibonds. I think I would have felt better about my purchases had I been provided a serial number and had the option to split up the purchase into multiple bonds. Yes, I printed off a copy of the receipt of purchase, but it looks rather generic, just stating that it was a I bond savings bond purchase of X thousand dollars, on a specific date with the code IAAAB after the date. Yes it does have my and my wife's names and partial SS numbers and my TD account number on it. I fail to see why TD would not issue a specific serial number for the bond, but apparently those went the way of paper bonds.

Perhaps the IAAAB is the serial number, as I see the one I purchased last year is shown as IAAAA. Not very impressive compared to the many digit serial number of the old paper bonds.
Sorry for any confusion I created, Carl, by referring to serial "numbers" for electronic bonds. You're correct that electronic I Bonds don't have nice long unique formal numbers like the kind on paper bonds or the kind you'd see on actual currency. I had in mind that confirmation code. And you're right, that series of five letters is "not very impressive," but at least it's something to reference the purchase/ownership on a person's own inventory list kept on paper, since Treasury Direct doesn't give us anything else.

My understanding--I hope others will correct me if I'm wrong, since so far I've not had the experience of redeeming an electronic I Bond--is that "splitting up the purchase into multiple bonds" is not really an issue where electronic holdings are concerned. I assume you're talking about making redemptions in a choice of amounts. With a paper I Bond, redemption is an all-or-nothing choice for each individual purchased bond. You own a $1,000 paper bond, you either have to redeem the whole $1,000 or not redeem anything at all. My understanding is that's not the case with electronic purchases. If, for example, you buy $10,000 in electronic I Bonds for 2012, and six years from now you need to redeem $4,000 of it, or $9244.79, or any other amount up to $10,000, I believe that's possible. In other words, choice of redemption amount is more flexible with electronic holdings. Again, I'd welcome correction from more knowledgeable posters if I'm misinformed.

Marc
ftobin
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Re: more great service from Treasury Direct!

Post by ftobin »

MarcMyWord wrote:(No, I don't know how that might be possible, but when we see recent stories about hacking of systems at the CIA--the CIA!!, for heaven's sake--it's certainly not beyond possibility at Treasury Direct.)
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Muchtolearn
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Re: more great service from Treasury Direct!

Post by Muchtolearn »

MarcMyWord wrote:
Muchtolearn wrote:If you want treasuries, Vanguard will buy them for you at auction for free.
Yes, but "free" may depend on the type of purchase and/or your status (Flagship, etc.) with Vanguard. And the bonds in question cannot be Series I Savings Bonds (which can only be bought direct from Treasury, not through brokerage firms); will have a secondary market price, which may fluctuate up or down with interest rate movements in the bond markets; may bring a price worth more or less than their original purchase price if sold before maturity; and their dividend payments will be subject to pay-as-you-go income taxes unless held in a retirement account screened from current taxation.

I Bonds, by contrast, have no secondary market price, never lose their previously accrued value at any time regardless of what is going on in bond markets, and automatically defer taxes on interest earnings (unless the customer specifically chooses to pay them along the way) even if held outside a retirement account. For those who qualify and register them appropriately, I Bonds can also be redeemed to pay certain children's educational expenses free of any taxation at all.

So in many people's portfolios, this can be a choice of "both/and" rather than "either/or."

Unless Vanguard Brokerage Services has changed its policy, the minimum purchase per transaction for Treasury bonds at original auction is 10 bonds, i.e., $10,000. I Bonds, on the other hand, can be bought or redeemed electronically in smaller amounts, although with an annual purchase limit per person.
marc, I think that I bond purchases are very limited to something like 5 or 10K per year. Many of the older bogleheads have assets sufficient that 5 or 10K will have no effect on their portfolio. That is where I was coming from. If you are talking about purchases of bonds less than 10K, then our conversation is off base as we are in different places. I'm sorry for interjecting as I made comments that were not applicable to you. But even if you don't have many assets (yet), a 10K bond at 4% means you are talking about $400 a year. This can't ulitmately have any impact on you.
ftobin
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Re: more great service from Treasury Direct!

Post by ftobin »

Personally, I'll note I was disappointed when they moved away from the decoder card. Far and away they had the most secure login of any financial system I had dealt with. The OTP system they have now is still better than most schemes out there (besides Google's Two-Step system), and I'm glad they implemented it fairly well.

The only thing they could do better would be to support HTTPS everywhere on their website to prevent injection/redirection attacks, and use ForceHTTPS.
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camper
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Re: more great service from Treasury Direct!

Post by camper »

Muchtolearn wrote:
MarcMyWord wrote:
Muchtolearn wrote:If you want treasuries, Vanguard will buy them for you at auction for free.
Yes, but "free" may depend on the type of purchase and/or your status (Flagship, etc.) with Vanguard. And the bonds in question cannot be Series I Savings Bonds (which can only be bought direct from Treasury, not through brokerage firms); will have a secondary market price, which may fluctuate up or down with interest rate movements in the bond markets; may bring a price worth more or less than their original purchase price if sold before maturity; and their dividend payments will be subject to pay-as-you-go income taxes unless held in a retirement account screened from current taxation.

I Bonds, by contrast, have no secondary market price, never lose their previously accrued value at any time regardless of what is going on in bond markets, and automatically defer taxes on interest earnings (unless the customer specifically chooses to pay them along the way) even if held outside a retirement account. For those who qualify and register them appropriately, I Bonds can also be redeemed to pay certain children's educational expenses free of any taxation at all.

So in many people's portfolios, this can be a choice of "both/and" rather than "either/or."

Unless Vanguard Brokerage Services has changed its policy, the minimum purchase per transaction for Treasury bonds at original auction is 10 bonds, i.e., $10,000. I Bonds, on the other hand, can be bought or redeemed electronically in smaller amounts, although with an annual purchase limit per person.
marc, I think that I bond purchases are very limited to something like 5 or 10K per year. Many of the older bogleheads have assets sufficient that 5 or 10K will have no effect on their portfolio. That is where I was coming from. If you are talking about purchases of bonds less than 10K, then our conversation is off base as we are in different places. I'm sorry for interjecting as I made comments that were not applicable to you. But even if you don't have many assets (yet), a 10K bond at 4% means you are talking about $400 a year. This can't ulitmately have any impact on you.
$400/year can't ultimately have any impact? Really? Am I still on the Bogleheads site?
Muchtolearn
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Re: more great service from Treasury Direct!

Post by Muchtolearn »

camper wrote:
Muchtolearn wrote:
MarcMyWord wrote:
Muchtolearn wrote:If you want treasuries, Vanguard will buy them for you at auction for free.
Yes, but "free" may depend on the type of purchase and/or your status (Flagship, etc.) with Vanguard. And the bonds in question cannot be Series I Savings Bonds (which can only be bought direct from Treasury, not through brokerage firms); will have a secondary market price, which may fluctuate up or down with interest rate movements in the bond markets; may bring a price worth more or less than their original purchase price if sold before maturity; and their dividend payments will be subject to pay-as-you-go income taxes unless held in a retirement account screened from current taxation.

I Bonds, by contrast, have no secondary market price, never lose their previously accrued value at any time regardless of what is going on in bond markets, and automatically defer taxes on interest earnings (unless the customer specifically chooses to pay them along the way) even if held outside a retirement account. For those who qualify and register them appropriately, I Bonds can also be redeemed to pay certain children's educational expenses free of any taxation at all.

So in many people's portfolios, this can be a choice of "both/and" rather than "either/or."

Unless Vanguard Brokerage Services has changed its policy, the minimum purchase per transaction for Treasury bonds at original auction is 10 bonds, i.e., $10,000. I Bonds, on the other hand, can be bought or redeemed electronically in smaller amounts, although with an annual purchase limit per person.
marc, I think that I bond purchases are very limited to something like 5 or 10K per year. Many of the older bogleheads have assets sufficient that 5 or 10K will have no effect on their portfolio. That is where I was coming from. If you are talking about purchases of bonds less than 10K, then our conversation is off base as we are in different places. I'm sorry for interjecting as I made comments that were not applicable to you. But even if you don't have many assets (yet), a 10K bond at 4% means you are talking about $400 a year. This can't ulitmately have any impact on you.
$400/year can't ultimately have any impact? Really? Am I still on the Bogleheads site?
With all due respect (really) it is a matter of what $400 is relative to. Let's take a boglehead with a 10 MM dollar portfolio. At a low yield of 2% that is 200K a year. So it is a rounding error. With a 1 MM portfolio, it yields 20K a year. So $400 is a 2 % difference. (But you would still earn something on the amount in TD, just in a different place). If one has 10K dollars, it is 4% and that matters. But at that level, investment returns are trivial to long term wealth and savings is the real driver.
ftobin
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Re: more great service from Treasury Direct!

Post by ftobin »

Muchtolearn wrote:With all due respect (really) it is a matter of what $400 is relative to. Let's take a boglehead with a 10 MM dollar portfolio. At a low yield of 2% that is 200K a year. So it is a rounding error. With a 1 MM portfolio, it yields 20K a year. So $400 is a 2 % difference. (But you would still earn something on the amount in TD, just in a different place). If one has 10K dollars, it is 4% and that matters. But at that level, investment returns are trivial to long term wealth and savings is the real driver.
A 100K portfolio is probably more in the ballpark for the average portfolio discussed. $400 is equivalent to a 0.40% expense ratio -- imagine the bottles of champagne that would be popped if everyone could have their high-cost mutual funds drop their ER by that amount!
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Igglesman
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Re: more great service from Treasury Direct!

Post by Igglesman »

I go with the Boglehead principle of "keep it simple".

I also like to apply the "beer truck rule of investing"....what happens if I get hit by a beer truck tomorrow and my spouse needs to find/take over our investment portfolio. For such a small amount of money, Treasury Direct is not worth it. :) :)
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jpsfranks
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Re: more great service from Treasury Direct!

Post by jpsfranks »

ftobin wrote:
Muchtolearn wrote:With all due respect (really) it is a matter of what $400 is relative to. Let's take a boglehead with a 10 MM dollar portfolio. At a low yield of 2% that is 200K a year. So it is a rounding error. With a 1 MM portfolio, it yields 20K a year. So $400 is a 2 % difference. (But you would still earn something on the amount in TD, just in a different place). If one has 10K dollars, it is 4% and that matters. But at that level, investment returns are trivial to long term wealth and savings is the real driver.
A 100K portfolio is probably more in the ballpark for the average portfolio discussed. $400 is equivalent to a 0.40% expense ratio -- imagine the bottles of champagne that would be popped if everyone could have their high-cost mutual funds drop their ER by that amount!
And while above average yield on $10k may not make a huge difference, $10k per year starts to add up. I only started buying I-Bonds on TD a few years ago but $30k at these rates (relative to what else is available) means something to me. Many of us have rewards checking accounts and those are a much bigger hassle for similar reward.

The only difficulties I've had with TD were the initial required signature guarantee and getting locked out once. When I called about the lockout I was speaking to someone after a few minutes who was courteous while I was initially terse as I was sure that it was their fault. I then realized that it was my mistake, but the representative was polite throughout.
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tuckeverlasting
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Re: more great service from Treasury Direct!

Post by tuckeverlasting »

For every one person who has had problems using the TD website, I would wager there are many more who do not. Granted, that doesn't help if you are the one person. I have experienced no difficulties with the site. I had to get the initial signature guarantee to register, which turned out to be only a minor hassle. I've made sure to print out clear records and instructions for my heirs.

I agree with the poster upthread who said we are (understandably) more likely to hear from the dissatisfied users. I admit that after reading various threads here I initially approached the TD site with considerable trepidation. But it proved unwarranted; at least, so far. YMMV, but for the time being, for me, the relatively few drawbacks seem worth it.
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VictoriaF
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Re: more great service from Treasury Direct!

Post by VictoriaF »

ftobin wrote:
Muchtolearn wrote:With all due respect (really) it is a matter of what $400 is relative to. Let's take a boglehead with a 10 MM dollar portfolio. At a low yield of 2% that is 200K a year. So it is a rounding error. With a 1 MM portfolio, it yields 20K a year. So $400 is a 2 % difference. (But you would still earn something on the amount in TD, just in a different place). If one has 10K dollars, it is 4% and that matters. But at that level, investment returns are trivial to long term wealth and savings is the real driver.
A 100K portfolio is probably more in the ballpark for the average portfolio discussed. $400 is equivalent to a 0.40% expense ratio -- imagine the bottles of champagne that would be popped if everyone could have their high-cost mutual funds drop their ER by that amount!
$10,000 x 4% = $400/year. If one buys I Bonds continuously for many years, there are always 30 years worth of them, providing income of $12,000/year (twice that much for married couples). The I Bond income compounds for many years with no taxes due until they are sold, unlike regular taxable investments income on which is taxable annually. And I Bonds are not subject to state income taxes. Finally, the establishment of the Treasury Direct account is a bit of pain, but once it is there, using it is trivial.

Victoria
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Re: more great service from Treasury Direct!

Post by tetractys »

MarcMyWord wrote:by observing that Treasury Direct take no responsibility for losses in an electronic account, regardless of cause. Yes, of course, the account holder should be very responsible and secretive about the access codes. But imagine a situation in which no one ever had access to the account holder's computer (or the password information wasn't stored there to begin with), never shared the codes with anyone, had appropriate security software on the computer, never took the computer out of the house, never used any other computer for account access, and yet somehow criminals hack into the account and clean it out. (No, I don't know how that might be possible, but when we see recent stories about hacking of systems at the CIA--the CIA!!, for heaven's sake--it's certainly not beyond possibility at Treasury Direct.) Treasury Direct's response to the customer would still be some version of "tough luck, buddy." I buy I Bonds, and I safeguard all the information, but I'm quite bothered by the fact that Treasury Direct takes no formal responsibility for the integrity of its own systems and offloads the entire risk of loss onto the customer--a situation which did not exist when lost or stolen paper bonds were replaceable.
1. For a TD account to be emptied, the user would have to turn over all rights to both their TD and bank accounts. 2. Or the US treasury itself would have to be broken into, i.e. emptied of treasuries. Boy that would be funny. The news might read "US Treasuries Vanish, US Refuses to Make Good," or, "US Treasury Funneled to Small Island Nation," and then, "Penniless US Can't Afford Investigation." 3. Paper USSBs have been replaced, and then years later the holder found they were worthless because the originals had long been redeemed. If you can't prove you weren't responsible for the loss, you could lose. Although that situation has improved within the last couple years, because banks have better access to electronic tracking of savings bonds. 4. There's also the situation where loss of USSBs looked suspicious for some reason, and the burden of proving innocence was squarely placed on the original holder before any replacement was allowed. -- Tet
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Re: more great service from Treasury Direct!

Post by JustinR »

I just applied for an account today. In the verification email it said:
Dear Account Holder,

Thanks again for opening a TreasuryDirect account. We are having difficulty verifying the information you provided when opening your account. For your protection, please complete the Account Authorization form https://www.treasurydirect.gov/pdf/rs/acctauth.pdf and mail it to TreasuryDirect, P.o. Box 7015, Parkersburg, WV 26106-7015. A hold has been placed on your account that will prevent you from accessing your account. After we receive and approve the Account Authorization form, the hold on your account will be removed. When you log into your account, check the Investor InBox section of your Treasury Direct account for an important message.
...What?

I have to get that form signed in front of a "certifying officer" and snail mail it to them before I can buy a few I-bonds? I'm looking at the form and don't see the point of it. Is it to prove I'm a real person?

"Acceptable certifying officers include authorized employees of insured depository institutions and corporate central credit unions." So this means I need to go to a bank and have someone sign it? Can it be any bank or does it have to be the exact bank I'll be funding from?

I guess this means I'll be missing the deadline for this round of I-bonds......
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tuckeverlasting
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Re: more great service from Treasury Direct!

Post by tuckeverlasting »

JustinR wrote:I just applied for an account today. In the verification email it said:
Dear Account Holder,

Thanks again for opening a TreasuryDirect account. We are having difficulty verifying the information you provided when opening your account. For your protection, please complete the Account Authorization form https://www.treasurydirect.gov/pdf/rs/acctauth.pdf and mail it to TreasuryDirect, P.o. Box 7015, Parkersburg, WV 26106-7015. A hold has been placed on your account that will prevent you from accessing your account. After we receive and approve the Account Authorization form, the hold on your account will be removed. When you log into your account, check the Investor InBox section of your Treasury Direct account for an important message.
...What?

I have to get that form signed in front of a "certifying officer" and snail mail it to them before I can buy a few I-bonds? I'm looking at the form and don't see the point of it. Is it to prove I'm a real person?

"Acceptable certifying officers include authorized employees of insured depository institutions and corporate central credit unions." So this means I need to go to a bank and have someone sign it? Can it be any bank or does it have to be the exact bank I'll be funding from?

I guess this means I'll be missing the deadline for this round of I-bonds......
Yes, you have to get the form signed and mail it to TD, and it can be any bank. There have been other threads about this: see one here
http://www.bogleheads.org/forum/viewtop ... =1&t=91737

I'm not sure what the form proves either, but it seems to be the price of admission if you want to play.
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Kevin M
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Re: more great service from Treasury Direct!

Post by Kevin M »

Muchtolearn wrote: To me the headaches outweigh the value propositions. Who needs to deal with this for a few thousand dollars of investment allowed in I bonds. If you want treasuries, Vanguard will buy them for you at auction for free.
Marketable treasuries and I Bonds are completely different beasts. The only marketable treasuries comparable to I Bonds are TIPS. TIPS can lose value; I Bonds cannot.

Yes, the annual purchase limits are frustratingly low, but a couple with a living trust can buy $30,000 per year (not including an extra $5K in the form of a tax refund). For most people that is not chicken feed, especially as only the inflation-protected portion of their fixed-income allocation. For other than high-income, high-net worth individuals, I doubt the annual purchase limits are a factor.

Granted, TD clearly has been having problems lately adequately serving the needs of its customers. It is clear to me that the key is patience. If one thinks there is any chance of needing the funds in a hurry, or expects to change anything quickly (like the linked bank account), it appears that TD may not be a good choice at this time. I recently thought of changing my linked bank account, but when I saw that paperwork was required, decided against it.

Kevin
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sscritic
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Re: more great service from Treasury Direct!

Post by sscritic »

JustinR wrote:I just applied for an account today. In the verification email it said:
procedures
...What?
I love reading the Code of Federal Regulations. The Code tells the government agency what it must do and tells you what you must do.
When you have completed the application, you will create a password to access your account. We will verify your identity and send your account number to you by e-mail when your account application is approved.
They don't give you an account unless they know who you are. If you go into a bank to open an account, they will want to see your drivers license.
When you establish an account, we may use a verification service to verify your identity using information you provide about yourself on the online application. At our option, we may require offline verification.
It's their option as to how you must identify yourself. Perhaps your name is just too common, and the verification service they use found six different JustinRs around town. They opted to require offline verification from you.
In the event we require offline verification, we will provide a printable verification form for the individual account owner or entity account manager to sign. The signature on the form must be certified or guaranteed as provided at §363.43, and the form must be mailed to us at the address provided in §363.5. We may require documentary verification of an entity as we deem appropriate.
Them's the rules.

P.S. Best reason yet, if I do say so myself!

If they use a verification service, how do they know the verification service is properly verifying individuals? By checking their work. You were randomly chosen to verify the accuracy of the verification service. Read about e-verify to see claims both for and against the accuracy of one particular verification service.
Last edited by sscritic on Thu Apr 26, 2012 6:04 am, edited 1 time in total.
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pfrank
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Re: more great service from Treasury Direct!

Post by pfrank »

Treasury Direct called me directly last week requesting copies of my trust documents. The woman said that since savings bonds went all electronic, they have been swamped. They have over a two week delay in processing paperwork and even answering e-mails. Unfortunately, TD has not posted this fact on their website. When you submit an e-mail it still says they will reply to you in 2 business days.

You would have thought the Treasury would have been better prepared for the electronic conversion. Over 80% of the bonds sold previously were in paper format.
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Re: more great service from Treasury Direct!

Post by beardsworth »

pfrank wrote:Treasury Direct called me directly last week requesting copies of my trust documents. The woman said that since savings bonds went all electronic, they have been swamped. They have over a two week delay in processing paperwork and even answering e-mails. Unfortunately, TD has not posted this fact on their website. When you submit an e-mail it still says they will reply to you in 2 business days.

You would have thought the Treasury would have been better prepared for the electronic conversion. Over 80% of the bonds sold previously were in paper format.
The claimed reason for the switch to all-electronic was to cut the expense (paper, printing, postage, etc.) of issuing paper bonds. (I happen to think it also involved an unannounced desire to reduce Treasury liability, since lost or stolen paper bonds were replaceable but the account holder bears liability for all losses, regardless of how caused, in an electronic account.) Boglehead moderator Mel Lindauer, a resident expert on Savings Bonds, predicted that a lot of the "savings" of going electronic would get eaten up by increased staffing needs to handle all the questions and problems experienced by electronic users. . . . But maybe Treasury simply decided to make customers wait rather than employ the additional staff. . . . And/or, since I Bonds have received a lot of press recently as a really good deal, relative to fraction-of-a-percent interest rates on money market savings accounts, it seems likely that Treasury Direct truly is swamped with a flood of new customers.
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Re: more great service from Treasury Direct!

Post by beardsworth »

ftobin wrote:
MarcMyWord wrote:(No, I don't know how that might be possible, but when we see recent stories about hacking of systems at the CIA--the CIA!!, for heaven's sake--it's certainly not beyond possibility at Treasury Direct.)
Image
Sorry, ftobin, but--although this is obviously intended as a bit of humor--I'm so unsavvy in the behind-the-scenes workings of the Internet that I don't even understand the cartoon. :) (Or :confused )
Muchtolearn
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Re: more great service from Treasury Direct!

Post by Muchtolearn »

VictoriaF wrote:
ftobin wrote:
Muchtolearn wrote:With all due respect (really) it is a matter of what $400 is relative to. Let's take a boglehead with a 10 MM dollar portfolio. At a low yield of 2% that is 200K a year. So it is a rounding error. With a 1 MM portfolio, it yields 20K a year. So $400 is a 2 % difference. (But you would still earn something on the amount in TD, just in a different place). If one has 10K dollars, it is 4% and that matters. But at that level, investment returns are trivial to long term wealth and savings is the real driver.
A 100K portfolio is probably more in the ballpark for the average portfolio discussed. $400 is equivalent to a 0.40% expense ratio -- imagine the bottles of champagne that would be popped if everyone could have their high-cost mutual funds drop their ER by that amount!
$10,000 x 4% = $400/year. If one buys I Bonds continuously for many years, there are always 30 years worth of them, providing income of $12,000/year (twice that much for married couples). The I Bond income compounds for many years with no taxes due until they are sold, unlike regular taxable investments income on which is taxable annually. And I Bonds are not subject to state income taxes. Finally, the establishment of the Treasury Direct account is a bit of pain, but once it is there, using it is trivial.

Victoria
All true Victoria. I like the beer truck post above though as I just like things as simple as possible.
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WolfpackFan
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Re: more great service from Treasury Direct!

Post by WolfpackFan »

TIPS can lose value; I Bonds cannot.
Actually, ALL ibonds issued with a fixed rate of 0% have less real value than what you put in due to taxes paid. It's a sick world we're living in.
JustinR
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Re: more great service from Treasury Direct!

Post by JustinR »

tuckeverlasting wrote:Yes, you have to get the form signed and mail it to TD, and it can be any bank. There have been other threads about this: see one here
http://www.bogleheads.org/forum/viewtop ... =1&t=91737

I'm not sure what the form proves either, but it seems to be the price of admission if you want to play.
sscritic wrote:
JustinR wrote:I just applied for an account today. In the verification email it said:
procedures
...What?
I love reading the Code of Federal Regulations. The Code tells the government agency what it must do and tells you what you must do.
When you have completed the application, you will create a password to access your account. We will verify your identity and send your account number to you by e-mail when your account application is approved.
They don't give you an account unless they know who you are. If you go into a bank to open an account, they will want to see your drivers license.
When you establish an account, we may use a verification service to verify your identity using information you provide about yourself on the online application. At our option, we may require offline verification.
It's their option as to how you must identify yourself. Perhaps your name is just too common, and the verification service they use found six different JustinRs around town. They opted to require offline verification from you.
In the event we require offline verification, we will provide a printable verification form for the individual account owner or entity account manager to sign. The signature on the form must be certified or guaranteed as provided at §363.43, and the form must be mailed to us at the address provided in §363.5. We may require documentary verification of an entity as we deem appropriate.
Them's the rules.

P.S. Best reason yet, if I do say so myself!

If they use a verification service, how do they know the verification service is properly verifying individuals? By checking their work. You were randomly chosen to verify the accuracy of the verification service. Read about e-verify to see claims both for and against the accuracy of one particular verification service.
Thanks. I'll get it done.

Does anyone know if you can fax it to them instead of sending it?
WolfpackFan wrote:
TIPS can lose value; I Bonds cannot.
Actually, ALL ibonds issued with a fixed rate of 0% have less real value than what you put in due to taxes paid. It's a sick world we're living in.
hmmm...really? So is it a bad time to invest in i bonds at the moment?
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Re: more great service from Treasury Direct!

Post by kikie »

thx for this just printed mine out with and didn't see this mentioned yet

http://www.treasurydirect.gov/indiv/too ... wizard.htm
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Mel Lindauer
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Re: more great service from Treasury Direct!

Post by Mel Lindauer »

MarcMyWord wrote:My understanding--I hope others will correct me if I'm wrong, since so far I've not had the experience of redeeming an electronic I Bond--is that "splitting up the purchase into multiple bonds" is not really an issue where electronic holdings are concerned. I assume you're talking about making redemptions in a choice of amounts. With a paper I Bond, redemption is an all-or-nothing choice for each individual purchased bond. You own a $1,000 paper bond, you either have to redeem the whole $1,000 or not redeem anything at all. My understanding is that's not the case with electronic purchases. If, for example, you buy $10,000 in electronic I Bonds for 2012, and six years from now you need to redeem $4,000 of it, or $9244.79, or any other amount up to $10,000, I believe that's possible. In other words, choice of redemption amount is more flexible with electronic holdings. Again, I'd welcome correction from more knowledgeable posters if I'm misinformed.

Marc
Hi Marc (and everyone):

We need to clarify something you stated in error about paper I Bonds needing to be redeemed in full. Paper I Bonds, do, in fact, allow partial redemptions. The balance is then reissued in new bonds with the same rate and issue date. However, for practical purposes we advised investors to keep the issue amounts varied so they wouldn't have to redeem a $10,000 (formerly issued) paper I Bond to get at $500. But it can be done.
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Kevin M
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Re: more great service from Treasury Direct!

Post by Kevin M »

JustinR wrote:
WolfpackFan wrote:
TIPS can lose value; I Bonds cannot.
Actually, ALL ibonds issued with a fixed rate of 0% have less real value than what you put in due to taxes paid. It's a sick world we're living in.
hmmm...really? So is it a bad time to invest in i bonds at the moment?
What investments do you know of that are providing real, after-tax positive returns with no risk of loss of principal? Maybe longer term TIPS, but then you've got humongous interest rate risk. Of course you lose to taxes with I Bonds, but you do as well with TIPS (unless held in a Roth, or your tax rate is low enough that you pay no taxes on TIRA withdrawals). With I Bonds you can defer the federal taxes, pay no state taxes, and if lucky, cash them in when in a lower tax bracket.

I maxed out my I Bond purchases in 2011 and 2012, including for my living trust. No regrets so far. If I had not done so already, I would try to get my order in before May 1 when the rate for the first six months drops to 2.21% (unless the fixed rate is not 0%--what are the chances of that?).

Kevin
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VictoriaF
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Re: more great service from Treasury Direct!

Post by VictoriaF »

Muchtolearn wrote:All true Victoria. I like the beer truck post above though as I just like things as simple as possible.
I like things simple, too, but of course the decisions about what should be simple are subjective (*). As for the I-Bonds, my main reason for buying them is protection from high inflation. Having lived through the 1980s I want to have plenty of real investments. I hold individual TIPS and TIPS funds in IRA accounts, whereas I-Bonds provide a nice outlet for my spare cash.

When I have first established the Treasury Direct account it was still possible to buy up to $30,000 of I-Bonds annually, and the real rates were higher. And so the payoff from dealing with the paperwork was greater than it would be now.

Victoria

(*) I saw your thread about the cost basis. Letting Vanguard to calculate the average instead of the specific share identification is one way to simplicity.
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JustinR
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Re: more great service from Treasury Direct!

Post by JustinR »

Is anyone not able to receive the OTP (one time passcode) in their email right now? I've tried having them resend it several times, and nothing.
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Re: more great service from Treasury Direct!

Post by DualIncomeNoDebt »

Same problem for some time now. Treasurydirect fails to send the OTP code even when users enter the correct account info. And the site also is getting the account-associated email addresses wrong as well. Thankfully I have only a few paper bonds I need to register.

Treasurydirect.com is pure garbage, one of the worst financial-related online services I've ever had to interact with, period. And I now purposefully go out of my way to avoid using it, ever. Nor would I trust it with any meaningful sum.
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Re: more great service from Treasury Direct!

Post by SpartanFan »

JustinR wrote:Is anyone not able to receive the OTP (one time passcode) in their email right now? I've tried having them resend it several times, and nothing.

i have the same problem right now. Seems like every time I try to login I have new issues.
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Re: more great service from Treasury Direct!

Post by NAVigator »

I believe the "problem" being reported here is that they fixed the problem. There have been many complaints about getting the One Time Password (OTP) whether they registered the computer or not. Registered computers are now recognized;
Treasury Direct wrote:One Time Passcode (OTP): You'll need a One Time Passcode (OTP) to log into your TreasuryDirect account if your computer is not registered. (See Registering a Computer below.) The OTP will be e-mailed to you after you enter your account number and click "Submit". On the OTP page, enter the OTP into the space provided, and click "Submit" to go to the password page. The OTP is case sensitive and may be copied and pasted from the e-mail message.

(Note: A One Time Passcode is valid for 24 hours or until it is successfully submitted on the OTP page.)

Registering a Computer: Registering your computer will help you save time the next time you log in. A computer that is not registered will require the use of an OTP each time you log in.

To register your computer, select the "Click here to register your computer" checkbox on the OTP page and, with the OTP entered in the space provided, click the "Submit" button. Registering your computer will authorize the use of persistent cookies. Do not register a public or shared computer, such as a library computer. (JavaScript and cookies must be enabled for you to register your computer.)
Learn More About Security Features and Protecting Your Account

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SpartanFan
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Re: more great service from Treasury Direct!

Post by SpartanFan »

NAVigator wrote:I believe the "problem" being reported here is that they fixed the problem. There have been many complaints about getting the One Time Password (OTP) whether they registered the computer or not. Registered computers are now recognized;
I cannot register my computer until I enter there OTP.

I cannot enter there OTP because I NEVER get there email with the OTP password.
"There's a crack in everything, that's how the light gets in" - Leonard Cohen (RIP)
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