Why ibonds?

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CloseEnough
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Why ibonds?

Post by CloseEnough »

I have recently seen lots of interest and posting about ibonds. Given that many on this forum have hundreds of thousands or in many cases millions in their portfolio I am wondering what the fascination is with ibonds. The annual dollar limit and hassle doesn’t seem worth it for a few hundred dollars interest in a large portfolio. It also seems like for someone who has for years invested in total bond fund for fixed income that it is a form of market timing. Comments welcome, thanks.
z3r0c00l
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Re: Why ibonds?

Post by z3r0c00l »

By far the best safe interest rate right now. The reason why you see lots of posts lately is because people have been using the same excuse not to invest in I bonds when they had the chance, and now they are regretting it. 3.54% guaranteed with no risk and tax deferred is a brilliant thing in a world where bank accounts are offering .5% and 30 year treasuries are offering 2.3%. Just matching inflation never seemed exciting enough but suddenly it is.

The $15,000 per person limit ($10,000 limit for those who don't want the hassle of tax refunds) is plenty if you plan ahead and buy them for 10-15 years. If you have several million it may not be worth the effort but that isn't a problem I have right now : ). A person with 750K in investments could make good use of 100K in I bonds.
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namajones
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Re: Why ibonds?

Post by namajones »

CloseEnough wrote: Sun May 23, 2021 6:17 am The annual dollar limit and hassle doesn’t seem worth it for a few hundred dollars interest in a large portfolio.
I agree. Add to that the hassle of using the Treasury's site (give it a shot and see what you think) make it a no-go for me. I'd personally pay $100 a year not to have to use that site. I don't even want to look at it. Who knows: maybe the clunky design is a feature, not a bug. Doesn't matter: I'll pass.

P.S. Don't hit that back button! LOL.
dukeblue219
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Re: Why ibonds?

Post by dukeblue219 »

Not everyone has millions of dollars in their portfolio. If you buy $15k worth per person over a decade a couple can have $300k worth.

If it's not worth the time, don't bother. I'm sure the majority (probably overwhelming majority) of BHers do not own any.
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HueyLD
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Re: Why ibonds?

Post by HueyLD »

CloseEnough wrote: Sun May 23, 2021 6:17 am I have recently seen lots of interest and posting about ibonds…..
The annual dollar limit and hassle doesn’t seem worth it for a few hundred dollars interest in a large portfolio.
Well, many people don’t have a large portfolio. For them, $10k is A LOT OF MONEY.

Some investors just feel good about getting 3.54% ILO virtually nothing.

TD site is a bit outdated, but it works.

As the old saying goes, different strokes for different folks!
Da5id
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Re: Why ibonds?

Post by Da5id »

CloseEnough wrote: Sun May 23, 2021 6:17 am I have recently seen lots of interest and posting about ibonds. Given that many on this forum have hundreds of thousands or in many cases millions in their portfolio I am wondering what the fascination is with ibonds. The annual dollar limit and hassle doesn’t seem worth it for a few hundred dollars interest in a large portfolio. It also seems like for someone who has for years invested in total bond fund for fixed income that it is a form of market timing. Comments welcome, thanks.
I dumped mine last year, partly because of that and partly because I had kids college educational expenses and it was a good time.

But i-bonds are really a good deal in general, and more than usual now with the current inflation spike giving them a high return. They are totally safe being issued by the treasury, and serve a role comparable to TIPS - which aren't a part of the total bond fund. In addition to the inflation protection they offer, they expand your tax deferred space (you can pay tax on interest yearly if you really want though). They are state income tax free when cashed, and the interest can be partially or full excluded if they are used for educational expenses. So they have a goodly amount going for them, though not as much as when they used to offer a fixed rate > 0.
DIYtrixie
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Re: Why ibonds?

Post by DIYtrixie »

namajones wrote: Sun May 23, 2021 7:23 am
CloseEnough wrote: Sun May 23, 2021 6:17 am The annual dollar limit and hassle doesn’t seem worth it for a few hundred dollars interest in a large portfolio.
I agree. Add to that the hassle of using the Treasury's site (give it a shot and see what you think) make it a no-go for me. I'd personally pay $100 a year not to have to use that site. I don't even want to look at it. Who knows: maybe the clunky design is a feature, not a bug. Doesn't matter: I'll pass.

P.S. Don't hit that back button! LOL.
I just bought my first I-bonds. I don’t get all the negative comments on the TD web site from BHers! For sure it is not a slick interface, but it’s not bad. Directions are clear, easy to navigate, etc.

So any BHers who (like me) are thinking about I-bonds but dragging their feet dreading a dreadful web interface: Don’t worry, just do it! :sharebeer
Da5id
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Re: Why ibonds?

Post by Da5id »

DIYtrixie wrote: Sun May 23, 2021 8:57 am
namajones wrote: Sun May 23, 2021 7:23 am
CloseEnough wrote: Sun May 23, 2021 6:17 am The annual dollar limit and hassle doesn’t seem worth it for a few hundred dollars interest in a large portfolio.
I agree. Add to that the hassle of using the Treasury's site (give it a shot and see what you think) make it a no-go for me. I'd personally pay $100 a year not to have to use that site. I don't even want to look at it. Who knows: maybe the clunky design is a feature, not a bug. Doesn't matter: I'll pass.

P.S. Don't hit that back button! LOL.
I just bought my first I-bonds. I don’t get all the negative comments on the TD web site from BHers! For sure it is not a slick interface, but it’s not bad. Directions are clear, easy to navigate, etc.

So any BHers who (like me) are thinking about I-bonds but dragging their feet dreading a dreadful web interface: Don’t worry, just do it! :sharebeer
Having sold a large number of I bonds last year I must say the 6-7 clicks per bond was kinda painful. I owned lots because of the way tax refunds taken as i-bonds are issued as paper bonds of small denominations. Other than that it is clunky and dated but not awful for me. But imagine dealing with it in 20 years into retirement when it is still not updated and maybe you are slowing down a bit.
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TxFrog
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Re: Why ibonds?

Post by TxFrog »

I-Bonds are not designed to lump sum a significant portion of your portfolio into. They're still great to use even for high income earners.

For example, say a couple makes $250k/yr (94% household income percentile in the US) and decides to invest $100k per year. Their desired asset allocation is approximately 80/20. They could invest $80k into equities in their 401k/403b/IRA/Taxable brokerage and purchase $20k in I-bonds through Treasury Direct.

My DW and I don't make nearly as much as the hypothetical couple above, but we plan to have almost 100% of our bonds in I-bonds during accumulation. If sometime in our future the $25k limit seems small, that probably means "we've already won the game".
ivgrivchuck
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Re: Why ibonds?

Post by ivgrivchuck »

CloseEnough wrote: Sun May 23, 2021 6:17 am I have recently seen lots of interest and posting about ibonds. Given that many on this forum have hundreds of thousands or in many cases millions in their portfolio I am wondering what the fascination is with ibonds. The annual dollar limit and hassle doesn’t seem worth it for a few hundred dollars interest in a large portfolio. It also seems like for someone who has for years invested in total bond fund for fixed income that it is a form of market timing. Comments welcome, thanks.
If you manage a multi million portfolio, they are not worth it.

For early- and mid-stage accumulators they can be a good deal.

It is not really market timing, at least not in a bad way...
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RyeBourbon
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Re: Why ibonds?

Post by RyeBourbon »

namajones wrote: Sun May 23, 2021 7:23 am
CloseEnough wrote: Sun May 23, 2021 6:17 am The annual dollar limit and hassle doesn’t seem worth it for a few hundred dollars interest in a large portfolio.
I agree. Add to that the hassle of using the Treasury's site (give it a shot and see what you think) make it a no-go for me. I'd personally pay $100 a year not to have to use that site. I don't even want to look at it. Who knows: maybe the clunky design is a feature, not a bug. Doesn't matter: I'll pass.

P.S. Don't hit that back button! LOL.
I transferred my money into my account on TD and then they were making me jump through hoops to buy anything (medallion signature etc), so I just closed the account out.
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Tyler Aspect
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Re: Why ibonds?

Post by Tyler Aspect »

There are some reasons to believe the US official inflation figures are lower than actual inflation. There are too many government programs whose expense is tied to the official inflation rate. Just look at one commodity price of lumber; its price has tripled since year 2018. Yet the official inflation is still 4.6%; really?

I still own a few iBonds, but they were the early issued ones in year 2003 - 2004.

I would say to a retiree during high inflation situation, to look to increase stock allocation 10%. Keep nominal bonds, and stay away from inflation indexed bonds.
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AnEngineer
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Re: Why ibonds?

Post by AnEngineer »

Tyler Aspect wrote: Sun May 23, 2021 11:50 am There are some reasons to believe the US official inflation figures are lower than actual inflation. There are too many government programs whose expense is tied to the official inflation rate. Just look at one commodity price of lumber; its price has tripled since year 2018. Yet the official inflation is still 4.6%; really?
While you may be right, lumber is a terrible example as it contributes little to nothing in a typical person's spending.
dukeblue219
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Re: Why ibonds?

Post by dukeblue219 »

AnEngineer wrote: Sun May 23, 2021 12:23 pm
Tyler Aspect wrote: Sun May 23, 2021 11:50 am There are some reasons to believe the US official inflation figures are lower than actual inflation. There are too many government programs whose expense is tied to the official inflation rate. Just look at one commodity price of lumber; its price has tripled since year 2018. Yet the official inflation is still 4.6%; really?
While you may be right, lumber is a terrible example as it contributes little to nothing in a typical person's spending.
Grocery and restaurant prices make a better example here. It's really getting expensive out there...
Thesaints
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Re: Why ibonds?

Post by Thesaints »

CloseEnough wrote: Sun May 23, 2021 6:17 am I have recently seen lots of interest and posting about ibonds. Given that many on this forum have hundreds of thousands or in many cases millions in their portfolio I am wondering what the fascination is with ibonds. The annual dollar limit and hassle doesn’t seem worth it for a few hundred dollars interest in a large portfolio. It also seems like for someone who has for years invested in total bond fund for fixed income that it is a form of market timing. Comments welcome, thanks.
You are right, but by accumulating whenever the rate seemed favorable I have got ~150k in Series I. Still not a huge sum, but it is not "nothing".
Never invested in "total bond" funds, btw. Wouldn't touch them with a 10-foot long pole.
chrisjul
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Re: Why ibonds?

Post by chrisjul »

namajones wrote: Sun May 23, 2021 7:23 am
CloseEnough wrote: Sun May 23, 2021 6:17 am The annual dollar limit and hassle doesn’t seem worth it for a few hundred dollars interest in a large portfolio.
I agree. Add to that the hassle of using the Treasury's site (give it a shot and see what you think) make it a no-go for me. I'd personally pay $100 a year not to have to use that site. I don't even want to look at it. Who knows: maybe the clunky design is a feature, not a bug. Doesn't matter: I'll pass.

P.S. Don't hit that back button! LOL.

Agreed. The site is BAD, but its worth it. I have some Ibonds from 2001 paying over 6%, I believe.
calwatch
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Re: Why ibonds?

Post by calwatch »

Unlike a bond fund their net asset value will never drop. The tax deferral seals the deal. I don't hold government bond funds outside of I (and recently EE) Bonds in my bond allocation. If you have a small business with its own EIN (maybe if you are a sole proprietor or gig worker with a solo 401k) you can also open a Treasury Direct account and buy $10k of I Bonds on that account, for a total of $25k per individual ($10k personal SSN, $10k EIN, $5k tax refund). I was in the process of doing so and promptly forgot the password. Ultimately it gave me a bit of time to step back and reconsider whether I wanted to add more I Bonds or add to other items in my portfolio, but I have until the end of October to decide if I want this rate or not.
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HomerJ
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Re: Why ibonds?

Post by HomerJ »

CloseEnough wrote: Sun May 23, 2021 6:17 am I have recently seen lots of interest and posting about ibonds. Given that many on this forum have hundreds of thousands or in many cases millions in their portfolio I am wondering what the fascination is with ibonds. The annual dollar limit and hassle doesn’t seem worth it for a few hundred dollars interest in a large portfolio. It also seems like for someone who has for years invested in total bond fund for fixed income that it is a form of market timing. Comments welcome, thanks.
It's a safety net.

Normal bonds can be hurt by inflation.

ibonds will never lose purchasing power. In return, you get basically no real return at all.

But even with $1-2 million in other investments, it's nice to have safety net of $100,000 in ibonds (it would take a couple 5 years to build that up though at $20,000 year)
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anon_investor
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Re: Why ibonds?

Post by anon_investor »

HomerJ wrote: Sun May 23, 2021 1:45 pm
CloseEnough wrote: Sun May 23, 2021 6:17 am I have recently seen lots of interest and posting about ibonds. Given that many on this forum have hundreds of thousands or in many cases millions in their portfolio I am wondering what the fascination is with ibonds. The annual dollar limit and hassle doesn’t seem worth it for a few hundred dollars interest in a large portfolio. It also seems like for someone who has for years invested in total bond fund for fixed income that it is a form of market timing. Comments welcome, thanks.
It's a safety net.

Normal bonds can be hurt by inflation.

ibonds will never lose purchasing power. In return, you get basically no real return at all.

But even with $1-2 million in other investments, it's nice to have safety net of $100,000 in ibonds (it would take a couple 5 years to build that up though at $20,000 year)
I Bonds used to offer a fix interest rate above the inflation adjustment...
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HomerJ
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Re: Why ibonds?

Post by HomerJ »

anon_investor wrote: Sun May 23, 2021 1:47 pm
HomerJ wrote: Sun May 23, 2021 1:45 pm
CloseEnough wrote: Sun May 23, 2021 6:17 am I have recently seen lots of interest and posting about ibonds. Given that many on this forum have hundreds of thousands or in many cases millions in their portfolio I am wondering what the fascination is with ibonds. The annual dollar limit and hassle doesn’t seem worth it for a few hundred dollars interest in a large portfolio. It also seems like for someone who has for years invested in total bond fund for fixed income that it is a form of market timing. Comments welcome, thanks.
It's a safety net.

Normal bonds can be hurt by inflation.

ibonds will never lose purchasing power. In return, you get basically no real return at all.

But even with $1-2 million in other investments, it's nice to have safety net of $100,000 in ibonds (it would take a couple 5 years to build that up though at $20,000 year)
I Bonds used to offer a fix interest rate above the inflation adjustment...
Yep, and I have some of those... But I also have the ones from this year and last year, where the real return is basically 0%, and I'm still glad I bought them
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
Arby
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Re: Why ibonds?

Post by Arby »

iBonds seem like a great deal. I am only interested in the Electronic version and have no interest in the Paper version.

I live overseas. Looking at the sign up page it seems one needs a US Address of Record.

https://www.treasurydirect.gov/instit/s ... psheet.pdf

Any overseas BH investing in iBonds? Is anything sent to your address of record?

Do any of you fund your iBond purchases by debiting your Fidelity Brokerage account or Fidelity Cash Management account?

Most importantly how easy is the cashing in process? I absolutely need any withdrawals to go to my Fidelity account.

It seems to me that iBonds are far superior to the Fidelity TIPs Index Fund. Am I missing something?
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anon_investor
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Re: Why ibonds?

Post by anon_investor »

HomerJ wrote: Sun May 23, 2021 1:54 pm
anon_investor wrote: Sun May 23, 2021 1:47 pm
HomerJ wrote: Sun May 23, 2021 1:45 pm
CloseEnough wrote: Sun May 23, 2021 6:17 am I have recently seen lots of interest and posting about ibonds. Given that many on this forum have hundreds of thousands or in many cases millions in their portfolio I am wondering what the fascination is with ibonds. The annual dollar limit and hassle doesn’t seem worth it for a few hundred dollars interest in a large portfolio. It also seems like for someone who has for years invested in total bond fund for fixed income that it is a form of market timing. Comments welcome, thanks.
It's a safety net.

Normal bonds can be hurt by inflation.

ibonds will never lose purchasing power. In return, you get basically no real return at all.

But even with $1-2 million in other investments, it's nice to have safety net of $100,000 in ibonds (it would take a couple 5 years to build that up though at $20,000 year)
I Bonds used to offer a fix interest rate above the inflation adjustment...
Yep, and I have some of those... But I also have the ones from this year and last year, where the real return is basically 0%, and I'm still glad I bought them
Unfortunately I only started buying them last year, at least my 2020 purchase has a 0.2% fixed rate, this year 0% fixed rate, but the variable rate makes I Bonds better than any alternative right now. I like how they are tax deferred as I will not need to redeem any before retirement (unless a true emergency) and likely in a lower tax bracket.
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Clever_Username
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Re: Why ibonds?

Post by Clever_Username »

My stocks-and-bonds portfolio is six figures, not seven, at least at the moment. I buy $10k of iBonds every year and I'm glad I do: it's inflation indexed cash, a form of inflation insurance. It's also a useful tier in my emergency plan and, to me, justifies not keeping a large chunk of cash around. It's like a great bank account.
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ondarvr
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Re: Why ibonds?

Post by ondarvr »

I don't see the outdated website as that big of a deal, it may take 2 minutes longer for a complicated transaction.

Being close to retirement, I have cash for about a year, then I Bonds for another year or more. Far better than a savings account, and being inflation adjusted you at least have something to show for it.

It's not something I plan to fund my retirement with, just another tool that when used correctly has a place in box.
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Noobvestor
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Re: Why ibonds?

Post by Noobvestor »

CloseEnough wrote: Sun May 23, 2021 6:17 am I have recently seen lots of interest and posting about ibonds. Given that many on this forum have hundreds of thousands or in many cases millions in their portfolio I am wondering what the fascination is with ibonds. The annual dollar limit and hassle doesn’t seem worth it for a few hundred dollars interest in a large portfolio. It also seems like for someone who has for years invested in total bond fund for fixed income that it is a form of market timing. Comments welcome, thanks.
I Bonds are a small part of my portfolio, but even with the $10K/year limit they do add up over time. Add in EE Bonds (for the 20-year doubling) and we're talking about $20K/year in TreasuryDirect. Complaints about the website are overblown - I log in once a year, buy and am done. I don't know where one would draw the line on them being too small to matter - maybe for someone older or with $5MM+. Anyway, over the last decade I've purchased around $200K in I/EE bonds - that's a substantial percent of most portfolios, I would think, but sure, not much to an ultra-rich investor.
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anon_investor
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Re: Why ibonds?

Post by anon_investor »

Noobvestor wrote: Sun May 23, 2021 2:55 pm
CloseEnough wrote: Sun May 23, 2021 6:17 am I have recently seen lots of interest and posting about ibonds. Given that many on this forum have hundreds of thousands or in many cases millions in their portfolio I am wondering what the fascination is with ibonds. The annual dollar limit and hassle doesn’t seem worth it for a few hundred dollars interest in a large portfolio. It also seems like for someone who has for years invested in total bond fund for fixed income that it is a form of market timing. Comments welcome, thanks.
I Bonds are a small part of my portfolio, but even with the $10K/year limit they do add up over time. Add in EE Bonds (for the 20-year doubling) and we're talking about $20K/year in TreasuryDirect. Complaints about the website are overblown - I log in once a year, buy and am done. I don't know where one would draw the line on them being too small to matter - maybe for someone older or with $5MM+. Anyway, over the last decade I've purchased around $200K in I/EE bonds - that's a substantial percent of most portfolios, I would think, but sure, not much to an ultra-rich investor.
Do you have a plan to stop buying at a certain number?
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Noobvestor
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Re: Why ibonds?

Post by Noobvestor »

anon_investor wrote: Sun May 23, 2021 2:56 pm
Noobvestor wrote: Sun May 23, 2021 2:55 pm
CloseEnough wrote: Sun May 23, 2021 6:17 am I have recently seen lots of interest and posting about ibonds. Given that many on this forum have hundreds of thousands or in many cases millions in their portfolio I am wondering what the fascination is with ibonds. The annual dollar limit and hassle doesn’t seem worth it for a few hundred dollars interest in a large portfolio. It also seems like for someone who has for years invested in total bond fund for fixed income that it is a form of market timing. Comments welcome, thanks.
I Bonds are a small part of my portfolio, but even with the $10K/year limit they do add up over time. Add in EE Bonds (for the 20-year doubling) and we're talking about $20K/year in TreasuryDirect. Complaints about the website are overblown - I log in once a year, buy and am done. I don't know where one would draw the line on them being too small to matter - maybe for someone older or with $5MM+. Anyway, over the last decade I've purchased around $200K in I/EE bonds - that's a substantial percent of most portfolios, I would think, but sure, not much to an ultra-rich investor.
Do you have a plan to stop buying at a certain number?
I don't have a fixed limit as yet - I might get nervous if it got to the point where they dominated the bond side of my portfolio and made it difficult to rebalance (though even then: I could always sell to rebalance). Even as my portfolio grows, I also see little reason to stop - once you're in that log-in-once-a-year habit it's pretty easy to just do it annually. I'll likely stop buying EE bonds when I'm older and my life expectancy is under 20 years.
Last edited by Noobvestor on Sun May 23, 2021 3:02 pm, edited 1 time in total.
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Invest4lt
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Re: Why ibonds?

Post by Invest4lt »

Arby wrote: Sun May 23, 2021 2:08 pm iBonds seem like a great deal. I am only interested in the Electronic version and have no interest in the Paper version.

I live overseas. Looking at the sign up page it seems one needs a US Address of Record.

https://www.treasurydirect.gov/instit/s ... psheet.pdf

Any overseas BH investing in iBonds? Is anything sent to your address of record?

Do any of you fund your iBond purchases by debiting your Fidelity Brokerage account or Fidelity Cash Management account?

Most importantly how easy is the cashing in process? I absolutely need any withdrawals to go to my Fidelity account.

It seems to me that iBonds are far superior to the Fidelity TIPs Index Fund. Am I missing something?
My major issue with TD is the outdated technology for adding or updating bank information. Adding or updating your bank account information requires mailing a paper form with a Gold Medallion signature guarantee. I wonder if that is possible to obtain a GM signature if you are overseas?
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anon_investor
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Re: Why ibonds?

Post by anon_investor »

Noobvestor wrote: Sun May 23, 2021 3:00 pm
anon_investor wrote: Sun May 23, 2021 2:56 pm
Noobvestor wrote: Sun May 23, 2021 2:55 pm
CloseEnough wrote: Sun May 23, 2021 6:17 am I have recently seen lots of interest and posting about ibonds. Given that many on this forum have hundreds of thousands or in many cases millions in their portfolio I am wondering what the fascination is with ibonds. The annual dollar limit and hassle doesn’t seem worth it for a few hundred dollars interest in a large portfolio. It also seems like for someone who has for years invested in total bond fund for fixed income that it is a form of market timing. Comments welcome, thanks.
I Bonds are a small part of my portfolio, but even with the $10K/year limit they do add up over time. Add in EE Bonds (for the 20-year doubling) and we're talking about $20K/year in TreasuryDirect. Complaints about the website are overblown - I log in once a year, buy and am done. I don't know where one would draw the line on them being too small to matter - maybe for someone older or with $5MM+. Anyway, over the last decade I've purchased around $200K in I/EE bonds - that's a substantial percent of most portfolios, I would think, but sure, not much to an ultra-rich investor.
Do you have a plan to stop buying at a certain number?
I don't have a fixed limit as yet - I might get nervous if it got to the point where they dominated the bond side of my portfolio and made it difficult to rebalance (though even then: I could always sell to rebalance). I'll likely stop buying EE bonds when I'm older and my life expectancy is under 20 years. Even as my portfolio grows, I also see little reason to stop - once you're in that log-in-once-a-year habit it's pretty easy to just do it annually.
I just started buying I Bonds last year. Originally, I was just going to buy them with funds from expiring CDs that make up my EF, but they seem so good, I might just keep buying them for the foreseeable future. I am going to pass on EE Bonds for now.
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anon_investor
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Re: Why ibonds?

Post by anon_investor »

Invest4lt wrote: Sun May 23, 2021 3:01 pm
Arby wrote: Sun May 23, 2021 2:08 pm iBonds seem like a great deal. I am only interested in the Electronic version and have no interest in the Paper version.

I live overseas. Looking at the sign up page it seems one needs a US Address of Record.

https://www.treasurydirect.gov/instit/s ... psheet.pdf

Any overseas BH investing in iBonds? Is anything sent to your address of record?

Do any of you fund your iBond purchases by debiting your Fidelity Brokerage account or Fidelity Cash Management account?

Most importantly how easy is the cashing in process? I absolutely need any withdrawals to go to my Fidelity account.

It seems to me that iBonds are far superior to the Fidelity TIPs Index Fund. Am I missing something?
My major issue with TD is the outdated technology for adding or updating bank information. Adding or updating your bank account information requires mailing a paper form with a Gold Medallion signature guarantee. I wonder if that is possible to obtain a GM signature if you are overseas?
I saw that new requirement. They didn't have that last year, when we added all our accounts.
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Noobvestor
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Re: Why ibonds?

Post by Noobvestor »

anon_investor wrote: Sun May 23, 2021 3:04 pm I just started buying I Bonds last year. Originally, I was just going to buy them with funds from expiring CDs that make up my EF, but they seem so good, I might just keep buying them for the foreseeable future.
Even though inflation has been low this past decade I have no regrets amassing a big stockpile of I Bonds - they still have 20-30 years left in them, and as people worry about rising inflation, well, I'm happy to have built up this stash. So FWIW, I think buying as many as possible is a good call!
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anon_investor
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Re: Why ibonds?

Post by anon_investor »

Noobvestor wrote: Sun May 23, 2021 3:11 pm
anon_investor wrote: Sun May 23, 2021 3:04 pm I just started buying I Bonds last year. Originally, I was just going to buy them with funds from expiring CDs that make up my EF, but they seem so good, I might just keep buying them for the foreseeable future.
Even though inflation has been low this past decade I have no regrets amassing a big stockpile of I Bonds - they still have 20-30 years left in them, and as people worry about rising inflation, well, I'm happy to have built up this stash. So FWIW, I think buying as many as possible is a good call!
I can see how having a giant stash of I Bonds entering retirement could really help mitigate SORR.
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Re: Why ibonds?

Post by Big Dog »

I refuse to purchase iBonds due to lack of contingent beneficiaries. I'm all-in for ToD/PoD, but Treasury Direct does not allow contingents. And the $15k pruchase limit is rather silly. I would think the feds would want to encourage and enable folks to easily buy US bonds.
Last edited by Big Dog on Sun May 23, 2021 3:21 pm, edited 1 time in total.
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Re: Why ibonds?

Post by anon_investor »

Big Dog wrote: Sun May 23, 2021 3:19 pm I refuse to purchase iBonds due to lack of contingent beneficiaries. I'm all-in for ToD/PoD, but Treasury Direct does not allow contingents.
Can't you just create a trust and buy the I Bonds for the trust?
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Re: Why ibonds?

Post by Big Dog »

anon_investor wrote: Sun May 23, 2021 3:21 pm
Big Dog wrote: Sun May 23, 2021 3:19 pm I refuse to purchase iBonds due to lack of contingent beneficiaries. I'm all-in for ToD/PoD, but Treasury Direct does not allow contingents.
Can't you just create a trust and buy the I Bonds for the trust?
possibly, but a Trust is the opposite of PoD/ToD.
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Re: Why ibonds?

Post by anon_investor »

Big Dog wrote: Sun May 23, 2021 3:21 pm
anon_investor wrote: Sun May 23, 2021 3:21 pm
Big Dog wrote: Sun May 23, 2021 3:19 pm I refuse to purchase iBonds due to lack of contingent beneficiaries. I'm all-in for ToD/PoD, but Treasury Direct does not allow contingents.
Can't you just create a trust and buy the I Bonds for the trust?
possibly, but a Trust is the opposite of PoD/ToD.
But a trust can avoid probate, which is why I assume you want PoD/ToD.
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Re: Why ibonds?

Post by Arby »

Invest4lt wrote: Sun May 23, 2021 3:01 pm

My major issue with TD is the outdated technology for adding or updating bank information. Adding or updating your bank account information requires mailing a paper form with a Gold Medallion signature guarantee. I wonder if that is possible to obtain a GM signature if you are overseas?
Thanks for the heads up.

It is really tempting but looks like I will have to pass on what is otherwise an excellent deal. Also just saw they have two factor ID which enhances security but could be a real pain if one loses access to their email account. Don't need the stress.

If Vanguard or Fido offered this product I would think that most BHs would be using this for the fixed income portion of their portfolio this year.
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Re: Why ibonds?

Post by anon_investor »

Arby wrote: Sun May 23, 2021 3:50 pm
Invest4lt wrote: Sun May 23, 2021 3:01 pm

My major issue with TD is the outdated technology for adding or updating bank information. Adding or updating your bank account information requires mailing a paper form with a Gold Medallion signature guarantee. I wonder if that is possible to obtain a GM signature if you are overseas?
Thanks for the heads up.

It is really tempting but looks like I will have to pass on what is otherwise an excellent deal. Also just saw they have two factor ID which enhances security but could be a real pain if one loses access to their email account. Don't need the stress.

If Vanguard or Fido offered this product I would think that most BHs would be using this for the fixed income portion of their portfolio this year.
Wait you don't want 2FA? I don't think I would want an account that doesn't have 2FA...
AlwaysLearningMore
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Re: Why ibonds?

Post by AlwaysLearningMore »

I Bonds can be part of a liability matching portfolio.

"Safe" retirement assets can include I Bonds (along with e.g., TIPS and annuitized income).

A meaningful position in I Bonds can be obtained through yearly purchases by self (10K), spouse (10k), trusts (10 each), 5K federal income tax overpayment; TD also permits entity accounts (10K each) https://tinyurl.com/yzy9tr3l

While the TD website isn't exactly Amazon, it needn't be. It is functional, and over 70% those who take the voluntary survey at the end of a session rate it as excellent.
Retirement is best when you have a lot to live on, and a lot to live for.
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Re: Why ibonds?

Post by anon_investor »

AlwaysLearningMore wrote: Sun May 23, 2021 3:56 pm
While the TD website isn't exactly Amazon, it needn't be. It is functional, and over 70% those who take the voluntary survey at the end of a session rate it as excellent.
+1. I don't know why people complain. It does what it is supposed to.
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Re: Why ibonds?

Post by Big Dog »

anon_investor wrote: Sun May 23, 2021 3:27 pm
Big Dog wrote: Sun May 23, 2021 3:21 pm
anon_investor wrote: Sun May 23, 2021 3:21 pm
Big Dog wrote: Sun May 23, 2021 3:19 pm I refuse to purchase iBonds due to lack of contingent beneficiaries. I'm all-in for ToD/PoD, but Treasury Direct does not allow contingents.
Can't you just create a trust and buy the I Bonds for the trust?
possibly, but a Trust is the opposite of PoD/ToD.
But a trust can avoid probate, which is why I assume you want PoD/ToD.
1) Avoiding probate
2) Simplicity (for spouse and heirs)

If I can do PoD/ToD on everything else, including primary residence, setting up a trust just for Treasuryi Direct makes no sense to me.
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Re: Why ibonds?

Post by Arby »

anon_investor wrote: Sun May 23, 2021 3:53 pm

Wait you don't want 2FA? I don't think I would want an account that doesn't have 2FA...
It seems if I lost access to my email account it would be extremely difficult to sort out account access especially since I live overseas. But yes, I get that a hacked account is even worse.
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Re: Why ibonds?

Post by anon_investor »

Arby wrote: Sun May 23, 2021 4:25 pm
anon_investor wrote: Sun May 23, 2021 3:53 pm

Wait you don't want 2FA? I don't think I would want an account that doesn't have 2FA...
It seems if I lost access to my email account it would be extremely difficult to sort out account access especially since I live overseas. But yes, I get that a hacked account is even worse.
Do you often lose access to your email? It is recommended to have email with 2FA.
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Re: Why ibonds?

Post by anon_investor »

Big Dog wrote: Sun May 23, 2021 4:18 pm
anon_investor wrote: Sun May 23, 2021 3:27 pm
Big Dog wrote: Sun May 23, 2021 3:21 pm
anon_investor wrote: Sun May 23, 2021 3:21 pm
Big Dog wrote: Sun May 23, 2021 3:19 pm I refuse to purchase iBonds due to lack of contingent beneficiaries. I'm all-in for ToD/PoD, but Treasury Direct does not allow contingents.
Can't you just create a trust and buy the I Bonds for the trust?
possibly, but a Trust is the opposite of PoD/ToD.
But a trust can avoid probate, which is why I assume you want PoD/ToD.
1) Avoiding probate
2) Simplicity (for spouse and heirs)

If I can do PoD/ToD on everything else, including primary residence, setting up a trust just for Treasuryi Direct makes no sense to me.
I can understand the simplicity issue. I Bonds won't offer that.
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Re: Why ibonds?

Post by AnEngineer »

Arby wrote: Sun May 23, 2021 4:25 pm
anon_investor wrote: Sun May 23, 2021 3:53 pm

Wait you don't want 2FA? I don't think I would want an account that doesn't have 2FA...
It seems if I lost access to my email account it would be extremely difficult to sort out account access especially since I live overseas. But yes, I get that a hacked account is even worse.
This sounds so backwards to me. If I lose my email address, my TD account is pretty far down on the list of my concerns. (Also, TD can optionally remember your computer.)
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Re: Why ibonds?

Post by lazynovice »

In every “Do I need a brick and mortar bank” thread, medallion signature guarantees come up and if you ask “What do you need one of those for, the answer is “I-bonds”.

That has been enough to ward me off of them. Sounds like a lot of hassle for a small part of my portfolio.
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Re: Why ibonds?

Post by SteadyOne »

anon_investor wrote: Sun May 23, 2021 4:00 pm
AlwaysLearningMore wrote: Sun May 23, 2021 3:56 pm
While the TD website isn't exactly Amazon, it needn't be. It is functional, and over 70% those who take the voluntary survey at the end of a session rate it as excellent.
+1. I don't know why people complain. It does what it is supposed to.
It takes may be what - 5 minutes more than Vanguard app or similar to login. Once or twice a year. People spend more time perusing YouTube cat videos. Actually, the less people know and use ibonds the better for those who do use them
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Re: Why ibonds?

Post by case_of_ennui »

lazynovice wrote: Sun May 23, 2021 5:08 pm In every “Do I need a brick and mortar bank” thread, medallion signature guarantees come up and if you ask “What do you need one of those for, the answer is “I-bonds”.

That has been enough to ward me off of them. Sounds like a lot of hassle for a small part of my portfolio.
I was put off by this for a while as well, but finally got around to it this year. I wanted to start migrating my emergency fund into I Bonds instead of having it in CDs. Set up an appointment at the local branch of my bank and walked out with the medallion maybe 15 minutes later. Mailed the form to the TD address and had my account activated in under a week. Was not a hassle at all.
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Re: Why ibonds?

Post by ychuck46 »

namajones wrote: Sun May 23, 2021 7:23 am
CloseEnough wrote: Sun May 23, 2021 6:17 am The annual dollar limit and hassle doesn’t seem worth it for a few hundred dollars interest in a large portfolio.
I agree. Add to that the hassle of using the Treasury's site (give it a shot and see what you think) make it a no-go for me. I'd personally pay $100 a year not to have to use that site. I don't even want to look at it. Who knows: maybe the clunky design is a feature, not a bug. Doesn't matter: I'll pass.

P.S. Don't hit that back button! LOL.
Thought the same thing initially but if you get in a fix, their support line people are pretty good. Once they explained to me the nuances of some of the sections, I can do pretty much anything on the system. I suspect they are still using old IBM mainframes on the Treasury Direct site, hence the lack of logic in how their system works.
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Re: Why ibonds?

Post by BrokerageZelda »

Just wanted to note that TreasuryDirect accepts alternative, non-Medallion stamps for validating their forms; their forms that require a 'signature guarantee' have a list in their instructions of alternatives that can be more common, such as savings bond redemption stamps, which any bank or credit union that cashes savings bonds will be able to provide, even if they are not members of a Medallion program.
Acceptable seals and stamps:
  • The financial institution’s official seal or stamp, including: Signature Guaranteed seal or stamp; Endorsement Guaranteed seal or stamp; Corporate seal or stamp (a corporate resolution isn’t required); or Issuing or paying agent seal or stamp (including name, location, and four-digit identification number or nine-digit routing number).
  • The seal or stamp of Treasury-recognized Signature Guarantee Programs or other Treasury-approved Medallion Programs.
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