2021 I Bonds: what's your plan?

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anon_investor
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Re: 2021 I Bonds: what's your plan?

Post by anon_investor »

SnowBog wrote: Tue Jun 29, 2021 6:21 pm
anon_investor wrote: Tue Jun 29, 2021 5:30 pm
SnowBog wrote: Tue Jun 29, 2021 5:28 pm
anon_investor wrote: Tue Jun 29, 2021 2:49 pm
Doc7 wrote: Tue Jun 29, 2021 1:54 pm Does anyone know when I should see savings bonds value update on TD?

I purchased $10K in February 2021 but it still shows at $10K today.

Thank you
You would not see the last 3 months of interest, so until you have accrued 4 motnhs of interest will it show you as having any interest. So you will not see any interest until July 1, and it would only be 1 months worth.
I think they are actually past 4 months already...

I've got TD synced to Fidelity's "full view" (aka eMoney), and it shows me updates monthly.

But if I recall, when you go to the TD site, the default view only shows what's redeemable (or what was purchased)... At least I'm pretty sure the last time I looked, it showed all my bonds < 1 year as $10k without accrued interest. Seems like I had to click on my bond to get to the details to see how much interest had accrued...

But I might be wrong, as I only login to TD to buy (and eventually sell) bonds...
You're right 4 months have past, unless they were really purchased in March instead of Feb.
Wouldn't that still be 4+ months? :? March (purchased anytime in the month counts), April, May, June... 1, 2, 3, 4...
June isn't over yet, so June's interest will not show up to July 1. :sharebeer
SnowBog
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Re: 2021 I Bonds: what's your plan?

Post by SnowBog »

SnowBog wrote: Tue Jun 29, 2021 5:28 pm
anon_investor wrote: Tue Jun 29, 2021 2:49 pm
Doc7 wrote: Tue Jun 29, 2021 1:54 pm Does anyone know when I should see savings bonds value update on TD?

I purchased $10K in February 2021 but it still shows at $10K today.

Thank you
You would not see the last 3 months of interest, so until you have accrued 4 motnhs of interest will it show you as having any interest. So you will not see any interest until July 1, and it would only be 1 months worth.
I think they are actually past 4 months already...

I've got TD synced to Fidelity's "full view" (aka eMoney), and it shows me updates monthly.

But if I recall, when you go to the TD site, the default view only shows what's redeemable (or what was purchased)... At least I'm pretty sure the last time I looked, it showed all my bonds < 1 year as $10k without accrued interest. Seems like I had to click on my bond to get to the details to see how much interest had accrued...

But I might be wrong, as I only login to TD to buy (and eventually sell) bonds...
OK - so I logged into TD to look... Over the past 2 years I've bought 2 * $10k of EE Bonds and same for I Bonds in my account. The first batch are now > 12 months old...

When I log in the "main" page shows:

Code: Select all

Your Current Securities Total:	$40,000.00
And under "Current Holdings" - I see:

Code: Select all

SAVINGS BONDS	$40,000.00
If I "click" on Savings Bonds - it takes me to a new page, at the bottom of which I can see:

Code: Select all

Security Type            Amount        Current Value
Series EE Savings Bond   $20,000.00    $20,0xx.00
Series I Savings Bond    $20,000.00    $20,xxx.00
Totals:                  $40,000.00    $40,xxx.00
And if I select either and "submit" - I can see the details of each bond purchased - and its "current value".

Bottom line - you need to get below the "main page" in TD to see the interest...
SnowBog
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Re: 2021 I Bonds: what's your plan?

Post by SnowBog »

anon_investor wrote: Tue Jun 29, 2021 6:23 pm
SnowBog wrote: Tue Jun 29, 2021 6:21 pm
anon_investor wrote: Tue Jun 29, 2021 5:30 pm You're right 4 months have past, unless they were really purchased in March instead of Feb.
Wouldn't that still be 4+ months? :? March (purchased anytime in the month counts), April, May, June... 1, 2, 3, 4...
June isn't over yet, so June's interest will not show up to July 1. :sharebeer
:oops: Was trying to count my months early... Yep, if purchased in March - they should see it in July...

But if purchased in February as stated - it should be there... As I put in my other post, I think its more likely that they just aren't looking "far" enough into the TD site - as the "home page" doesn't show the interest (or it doesn't for me anyway).
Doc7
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Re: 2021 I Bonds: what's your plan?

Post by Doc7 »

anon_investor wrote: Tue Jun 29, 2021 5:30 pm
SnowBog wrote: Tue Jun 29, 2021 5:28 pm
anon_investor wrote: Tue Jun 29, 2021 2:49 pm
Doc7 wrote: Tue Jun 29, 2021 1:54 pm Does anyone know when I should see savings bonds value update on TD?

I purchased $10K in February 2021 but it still shows at $10K today.

Thank you
You would not see the last 3 months of interest, so until you have accrued 4 motnhs of interest will it show you as having any interest. So you will not see any interest until July 1, and it would only be 1 months worth.
I think they are actually past 4 months already...

I've got TD synced to Fidelity's "full view" (aka eMoney), and it shows me updates monthly.

But if I recall, when you go to the TD site, the default view only shows what's redeemable (or what was purchased)... At least I'm pretty sure the last time I looked, it showed all my bonds < 1 year as $10k without accrued interest. Seems like I had to click on my bond to get to the details to see how much interest had accrued...

But I might be wrong, as I only login to TD to buy (and eventually sell) bonds...
You're right 4 months have past, unless they were really purchased in March instead of Feb.

Thank you,..
Turns out on reflection, reviewing my post history here, and checking the actual source, I purchased my i bonds in March 10K and April 10k (wife).
slinky$
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Re: 2021 I Bonds: what's your plan?

Post by slinky$ »

Have a question re some ibonds I've picked up over the years if anyone can help out:

Image

Why are the interest rates so far off? I know they will have different fixed rates, but assumed they would all have the same inflation rate?

Figured I'd have more of these around 3.54%!
BrokerageZelda
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Re: 2021 I Bonds: what's your plan?

Post by BrokerageZelda »

slinky$ wrote: Fri Jul 02, 2021 5:00 am Have a question re some ibonds I've picked up over the years if anyone can help out:

Image

Why are the interest rates so far off? I know they will have different fixed rates, but assumed they would all have the same inflation rate?

Figured I'd have more of these around 3.54%!
The interest rate for I Bonds changes every six months, and new rates are announced twice a year, but the actual month of the change depends on when you buy the bond.

https://www.bogleheads.org/wiki/I_savin ... ings_rates

Your 'October issue' bonds will update to the 3.54%+x 'May rate' in October, and your 'March issue' bond will update to the 3.54%+x rate in September. Until then, they're sill using the 1.68%+x 'November rate' from last year.
slinky$
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Re: 2021 I Bonds: what's your plan?

Post by slinky$ »

Gotcha thanks, looking forward to that sweet 3.54% (even if on small amounts lol)
Chuck
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Re: 2021 I Bonds: what's your plan?

Post by Chuck »

I didn't want to start a new thread, but I was just looking...

March CPI is 264.844
July is 273.003

If CPI is unchanged until September, we are going to see over 6% in the next inflation rate update???
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Re: 2021 I Bonds: what's your plan?

Post by MattB »

Chuck wrote: Mon Aug 30, 2021 4:22 pm I didn't want to start a new thread, but I was just looking...

March CPI is 264.844
July is 273.003

If CPI is unchanged until September, we are going to see over 6% in the next inflation rate update???
Would be interesting if i-bonds with 0% interest base rates paid over 6% for a couple years.
secondopinion
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Re: 2021 I Bonds: what's your plan?

Post by secondopinion »

My plan is simple: once I have enough assets that will suffer in inflation, then I will worry about inflation.
Chuck
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Re: 2021 I Bonds: what's your plan?

Post by Chuck »

MattB wrote: Mon Aug 30, 2021 4:36 pm Would be interesting if i-bonds with 0% interest base rates paid over 6% for a couple years.
Boy do I hope we don't see 6% inflation for "a couple years."
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anon_investor
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Re: 2021 I Bonds: what's your plan?

Post by anon_investor »

MattB wrote: Mon Aug 30, 2021 4:36 pm
Chuck wrote: Mon Aug 30, 2021 4:22 pm I didn't want to start a new thread, but I was just looking...

March CPI is 264.844
July is 273.003

If CPI is unchanged until September, we are going to see over 6% in the next inflation rate update???
Would be interesting if i-bonds with 0% interest base rates paid over 6% for a couple years.
The variable rate resets every 6 months so I doubt you would get that rate very long.
Chuck
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Re: 2021 I Bonds: what's your plan?

Post by Chuck »

August CPI is 273.567, which is a shade higher than July. If there's no decline, we should see at least fixed+6.56% on our I-Bonds. (Which is totally depressing, but it's better than my Ally savings account.) Anyone who hasn't purchased for 2021 yet should just go ahead and get the 3.54% rate for 6 months, and then whatever it is (6%+) for the next 6 months.
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Re: 2021 I Bonds: what's your plan?

Post by tj »

Chuck wrote: Tue Sep 14, 2021 11:50 am August CPI is 273.567, which is a shade higher than July. If there's no decline, we should see at least fixed+6.56% on our I-Bonds. (Which is totally depressing, but it's better than my Ally savings account.) Anyone who hasn't purchased for 2021 yet should just go ahead and get the 3.54% rate for 6 months, and then whatever it is (6%+) for the next 6 months.
IS the cut off the for 3.54% end of September or end of October?
hoofaman
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Re: 2021 I Bonds: what's your plan?

Post by hoofaman »

tj wrote: Tue Sep 14, 2021 11:52 am
Chuck wrote: Tue Sep 14, 2021 11:50 am August CPI is 273.567, which is a shade higher than July. If there's no decline, we should see at least fixed+6.56% on our I-Bonds. (Which is totally depressing, but it's better than my Ally savings account.) Anyone who hasn't purchased for 2021 yet should just go ahead and get the 3.54% rate for 6 months, and then whatever it is (6%+) for the next 6 months.
IS the cut off the for 3.54% end of September or end of October?
+1, inquiring minds would like to know
BrokerageZelda
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Re: 2021 I Bonds: what's your plan?

Post by BrokerageZelda »

tj wrote: Tue Sep 14, 2021 11:52 am
Chuck wrote: Tue Sep 14, 2021 11:50 am August CPI is 273.567, which is a shade higher than July. If there's no decline, we should see at least fixed+6.56% on our I-Bonds. (Which is totally depressing, but it's better than my Ally savings account.) Anyone who hasn't purchased for 2021 yet should just go ahead and get the 3.54% rate for 6 months, and then whatever it is (6%+) for the next 6 months.
IS the cut off the for 3.54% end of September or end of October?
End of October. The 'November rate' is announced in mid-October and begins applying to new bonds on the first of November.
HomeStretch
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Re: 2021 I Bonds: what's your plan?

Post by HomeStretch »

BrokerageZelda wrote: Tue Sep 14, 2021 11:59 am
tj wrote: Tue Sep 14, 2021 11:52 am
Chuck wrote: Tue Sep 14, 2021 11:50 am August CPI is 273.567, which is a shade higher than July. If there's no decline, we should see at least fixed+6.56% on our I-Bonds. (Which is totally depressing, but it's better than my Ally savings account.) Anyone who hasn't purchased for 2021 yet should just go ahead and get the 3.54% rate for 6 months, and then whatever it is (6%+) for the next 6 months.
IS the cut off the for 3.54% end of September or end of October?
End of October. The 'November rate' is announced in mid-October and begins applying to new bonds on the first of November.
There are non-official internet rate predictions a week or two before the new rate goes into effect that are fairly accurate. But TreasuryDirect (TD) officially announces the new I-Bond rate on the first business date it is effective. May’s rate was announced 5/3/21 and last November’s rate was announced 11/2/20.

If you want the current 3.54% rate on new IBond purchases, you’ll need to buy before the Nov. 1 rate is announced. To be safe, initiate your purchase a few business days before the end of October. If you’re new to TD, set up your account in early October in case TD requires you to mail in paperwork with a medallion guarantee to fully open your new TD account.
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anon_investor
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Re: 2021 I Bonds: what's your plan?

Post by anon_investor »

HomeStretch wrote: Tue Sep 14, 2021 12:37 pm
BrokerageZelda wrote: Tue Sep 14, 2021 11:59 am
tj wrote: Tue Sep 14, 2021 11:52 am
Chuck wrote: Tue Sep 14, 2021 11:50 am August CPI is 273.567, which is a shade higher than July. If there's no decline, we should see at least fixed+6.56% on our I-Bonds. (Which is totally depressing, but it's better than my Ally savings account.) Anyone who hasn't purchased for 2021 yet should just go ahead and get the 3.54% rate for 6 months, and then whatever it is (6%+) for the next 6 months.
IS the cut off the for 3.54% end of September or end of October?
End of October. The 'November rate' is announced in mid-October and begins applying to new bonds on the first of November.
There are non-official internet rate predictions a week or two before the new rate goes into effect that are fairly accurate. But TreasuryDirect (TD) officially announces the new I-Bond rate on the first business date it is effective. May’s rate was announced 5/3/21 and last November’s rate was announced 11/2/20.

If you want the current 3.54% rate on new IBond purchases, you’ll need to buy before the Nov. 1 rate is announced. To be safe, initiate your purchase a few business days before the end of October. If you’re new to TD, set up your account in early October in case TD requires you to mail in paperwork with a medallion guarantee to fully open your new TD account.
Anyone who does not already have a TD account and plans to buy I Bonds before Nov 1, should set up their TD account today. No reason to delay, you may need to get a signature gurantee (it does not have to be a medalliona signature gurantee) to complete opening of the account.
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Re: 2021 I Bonds: what's your plan?

Post by Silversides »

anon_investor wrote: Tue Sep 14, 2021 12:55 pm
HomeStretch wrote: Tue Sep 14, 2021 12:37 pm
BrokerageZelda wrote: Tue Sep 14, 2021 11:59 am
tj wrote: Tue Sep 14, 2021 11:52 am
Chuck wrote: Tue Sep 14, 2021 11:50 am August CPI is 273.567, which is a shade higher than July. If there's no decline, we should see at least fixed+6.56% on our I-Bonds. (Which is totally depressing, but it's better than my Ally savings account.) Anyone who hasn't purchased for 2021 yet should just go ahead and get the 3.54% rate for 6 months, and then whatever it is (6%+) for the next 6 months.
IS the cut off the for 3.54% end of September or end of October?
End of October. The 'November rate' is announced in mid-October and begins applying to new bonds on the first of November.
There are non-official internet rate predictions a week or two before the new rate goes into effect that are fairly accurate. But TreasuryDirect (TD) officially announces the new I-Bond rate on the first business date it is effective. May’s rate was announced 5/3/21 and last November’s rate was announced 11/2/20.

If you want the current 3.54% rate on new IBond purchases, you’ll need to buy before the Nov. 1 rate is announced. To be safe, initiate your purchase a few business days before the end of October. If you’re new to TD, set up your account in early October in case TD requires you to mail in paperwork with a medallion guarantee to fully open your new TD account.
Anyone who does not already have a TD account and plans to buy I Bonds before Nov 1, should set up their TD account today. No reason to delay, you may need to get a signature gurantee (it does not have to be a medalliona signature gurantee) to complete opening of the account.

Another data point....

I recently set up a TD account. When cutting and pasting my bank account number, I inadvertently lopped off the last digit. TD sent me an email indicating that I'd need a signature guarantee, yada, yada.

I decided to try the 'contact us' link on TD's website and in my comment indicated that there must have been a transcription error when entering my bank info. and that I would greatly appreciate someone calling me to help fix the problem.

About 3 days later received a call from an amazingly competent and nice TD agent who, after verifying my identity, troubleshot the issue and updated my account details while we spoke. I bought my $10K allotment of I Bonds the next morning! No signature guarantee, not trip to the bank, etc.

It seems that they are actually quite responsive when you have a service ticket they can resolve. But best bet is to tread very carefully when setting up your account!
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Re: 2021 I Bonds: what's your plan?

Post by SnowBog »

As a PSA, the "current" rate when you buy remains in effect for 6 months. So if you buy now or in Oct. you'll have 6 months at the current rate, and whatever the Nov. rate is will kick in 6 months after purchase.

For myself, much like I do buying other assets, I've given up trying to "time" purchases. If I have the money to invest, and this is the asset I'm ready to purchase to maintain my AA (I consider Savings Bonds as part of my fixed income), than I go ahead and purchase. If the rates go up later, I'll eventually get the higher rates (and if they do down, I'll eventually get the lower rates).
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Re: 2021 I Bonds: what's your plan?

Post by FoundingFather »

One benefit of investing in I-Bonds is that is allows me to not feel as bad when inflation, or deflation for that matter, occurs. Even though I understand intellectually that inflation is not a good thing for my investments, when the I-Bond rate goes up, the little kid inside of me smiles at the bigger number. :D

I purchased $20,000 in I-bonds a few months ago, and will purchase another $20,000 after the first of the year.
“They accomplished a revolution... [and] reared the fabrics of governments which have no model on the face of the globe... which it is incumbent on their successors to improve and perpetuate.” James Madison
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Re: 2021 I Bonds: what's your plan?

Post by #Cruncher »

HomeStretch wrote: Tue Sep 14, 2021 12:37 pmThere are non-official internet rate predictions a week or two before the new rate goes into effect that are fairly accurate. But TreasuryDirect (TD) officially announces the new I-Bond rate on the first business date it is effective. May’s rate was announced 5/3/21 and last November’s rate was announced 11/2/20.
On the first business day of November at 10:00 AM Eastern TreasuryDirect will announce the I Bond fixed rate effective over the entire 30-year term for purchases during the next six months. No one knows before then what the fixed rate will be. (Most people expect it to remain at 0.00%.) At the same time TD will announce the I Bond inflation rate to be applied to all I Bonds for the six months beginning with each one's semi-anniversary date. Unlike the fixed rate, however, we will know ahead of time what the inflation rate announcement will be.

Once the September CPI report is released October 13th at 8:30 AM Eastern, compare the non-seasonally adjusted value [*] against March's 264.877 value to determine the inflation rate. For example, if September happened to be the same as August's 273.567, it would be 3.28% (273.567 / 264.877 - 1 rounded to 4 decimal places), and the composite rate for a 0% fixed rate I Bond bought this month would be 6.56% beginning March 2022.

* Click here for the latest CPI news release, and then scroll down to the section, Not seasonally adjusted CPI measures, and look for the CPI-U value. Alternatively click here for a table of the monthly values for the past ten years.
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Re: 2021 I Bonds: what's your plan?

Post by JimmyJammy »

FoundingFather wrote: Tue Sep 14, 2021 4:04 pm One benefit of investing in I-Bonds is that is allows me to not feel as bad when inflation, or deflation for that matter, occurs. Even though I understand intellectually that inflation is not a good thing for my investments, when the I-Bond rate goes up, the little kid inside of me smiles at the bigger number. :D

I purchased $20,000 in I-bonds a few months ago, and will purchase another $20,000 after the first of the year.
Isn't the annual limit for i-Bonds $10,000? And then you can also buy $10,000 max in EE bonds?
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Re: 2021 I Bonds: what's your plan?

Post by Mel Lindauer »

JimmyJammy wrote: Sat Sep 18, 2021 12:01 am
FoundingFather wrote: Tue Sep 14, 2021 4:04 pm One benefit of investing in I-Bonds is that is allows me to not feel as bad when inflation, or deflation for that matter, occurs. Even though I understand intellectually that inflation is not a good thing for my investments, when the I-Bond rate goes up, the little kid inside of me smiles at the bigger number. :D

I purchased $20,000 in I-bonds a few months ago, and will purchase another $20,000 after the first of the year.
Isn't the annual limit for i-Bonds $10,000? And then you can also buy $10,000 max in EE bonds?
The I Bond annual purchase limit is $10k per SS#, so a couple can buy $20k (or even more if they have a trust). And they can also get another $5k in paper bonds via their joint tax return.
Best Regards - Mel | | Semper Fi
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Re: 2021 I Bonds: what's your plan?

Post by FoundingFather »

Mel Lindauer wrote: Sat Sep 18, 2021 12:14 am
JimmyJammy wrote: Sat Sep 18, 2021 12:01 am
FoundingFather wrote: Tue Sep 14, 2021 4:04 pm One benefit of investing in I-Bonds is that is allows me to not feel as bad when inflation, or deflation for that matter, occurs. Even though I understand intellectually that inflation is not a good thing for my investments, when the I-Bond rate goes up, the little kid inside of me smiles at the bigger number. :D

I purchased $20,000 in I-bonds a few months ago, and will purchase another $20,000 after the first of the year.
Isn't the annual limit for i-Bonds $10,000? And then you can also buy $10,000 max in EE bonds?
The I Bond annual purchase limit is $10k per SS#, so a couple can buy $20k (or even more if they have a trust). And they can also get another $5k in paper bonds via their joint tax return.
Sorry that my sloppy language led to confusion. Mel is correct - I bought $20,000 in I Bonds by purchasing $10K for my wife and $10k for myself.

Founding Father
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Re: 2021 I Bonds: what's your plan?

Post by Johnny99 »

I want to use $20k (wife and I) to buy iBonds this year. What is the potential advantage or disadvantage to waiting a few more weeks to November for the updated rate?

Thanks
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Re: 2021 I Bonds: what's your plan?

Post by airborne »

Johnny99 wrote: Sat Sep 18, 2021 9:44 am I want to use $20k (wife and I) to buy iBonds this year. What is the potential advantage or disadvantage to waiting a few more weeks to November for the updated rate?

Thanks
My understanding is there is no advantage to waiting since the fixed rate is highly unlikely to move above zero.

You will receive six months interest at 3.54% and then six months beyond that you will receive the Nov 1 rate. The disadvantage to waiting is pushing back the 12-month lockup on your cash by an additional six weeks or so.
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Re: 2021 I Bonds: what's your plan?

Post by ApeAttack »

Johnny99 wrote: Sat Sep 18, 2021 9:44 am I want to use $20k (wife and I) to buy iBonds this year. What is the potential advantage or disadvantage to waiting a few more weeks to November for the updated rate?

Thanks
If you hold the bonds for a long time, the difference probably is negligible unless the fixed rate for the Nov 2021-April 2022 issue is significantly above 0%. Keep in mind that if you buy now and the fixed rates go up in November, you can simply buy more I-Bonds in January 2022. If you plan to purchase I-Bonds only once, you can split the difference and buy half now, half in Nov.

If you keep your I-Bond money as cash until November, you miss out on earning interest for September and October. Also, locking in the 3.54% rate for 6 months is way better than any CD or HYSA right now. But over 20 years, we're talking about a couple percent difference either way.
Just another lazy index investor who recently found out about I-Bonds (https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm).
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Re: 2021 I Bonds: what's your plan?

Post by Eagle33 »

Johnny99 wrote: Sat Sep 18, 2021 9:44 am I want to use $20k (wife and I) to buy iBonds this year. What is the potential advantage or disadvantage to waiting a few more weeks to November for the updated rate?

Thanks
You could buy $10k total between you & wife now, then the other $10k in November.
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Re: 2021 I Bonds: what's your plan?

Post by AnnetteLouisan »

Pizza_and_Beer wrote: Tue Dec 22, 2020 9:43 am
z3r0c00l wrote: Tue Dec 22, 2020 9:30 am I don't think the odds of a fixed rate increase are very good and so will buy as soon as possible. It is a good rate of return compared to almost anything safe and the sooner you buy, the sooner you can redeem it without 1 year lockup or 5 year EWP. Just a funny coincidence, I bonds currently pay the same as 30 year treasuries without the significant volatility of the latter. And if inflation kicks up your I bonds get paid more without a cent of harm to the principal.

Had a sudden, unexpected expense this month that may force me to wait until February, else my plan is to buy at the end of January using funds that now earn a sad .5% in a bank account.
+1
Same here, I was planning to get in in January. Has anyone done the extra $5k through the tax refund? What are the mechanics? I bought my first ever I bond in May.
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Re: 2021 I Bonds: what's your plan?

Post by AnnetteLouisan »

mhop wrote: Wed Mar 24, 2021 12:13 pm
cork wrote: Wed Mar 24, 2021 11:13 am I've read (almost) all the posts in this thread, and I believe my decision should be pretty straight forward. However, I'd like to run it by the forum for confirmation.
My wife and I had a CD mature that had a great interest rate. So now we have $20K available to put somewhere "safe", as part of our emergency fund.
We have maxed out our IRA contributions for the year, and the online bank we use offers between .5% and around .6% for savings or CD's.

Since the I Bond is currently at 1.68%, and we should have enough readily available cash in our EF, I am thinking of putting the 20K ( 10K each of us) into the I Bonds. Preferably by the end of this month, to get the 1 year clock started.

Thoughts or suggestions welcome.

Or should I start a new thread?
Don't get me wrong, I buy some I-bonds with my paycheck each month so I don't think it's a bad idea to move the money there. I also have rewards checking accounts and a HMBradley account for their 3% returns.
This HMBradley account is new to me. It seems its a 2020 start up and is invitation only?
HomeStretch
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Re: 2021 I Bonds: what's your plan?

Post by HomeStretch »

AnnetteLouisan wrote: Sun Sep 19, 2021 10:41 am … Has anyone done the extra $5k through the tax refund? What are the mechanics? …
Check the posts on the 1st page of this thread. One of them has a link to another thread that goes through the process.
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Re: 2021 I Bonds: what's your plan?

Post by Mel Lindauer »

Eagle33 wrote: Sat Sep 18, 2021 9:22 pm
Johnny99 wrote: Sat Sep 18, 2021 9:44 am I want to use $20k (wife and I) to buy iBonds this year. What is the potential advantage or disadvantage to waiting a few more weeks to November for the updated rate?

Thanks
You could buy $10k total between you & wife now, then the other $10k in November.
IMO, there's absolutely no reason to wait. If you buy now, you'll get the current 3.54% for six months and then the expected higher rate for the next six months. Since you'll enjoy TWO good rates with ALL of your money, why would you even consider waiting if you have the funds now?
Best Regards - Mel | | Semper Fi
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Re: 2021 I Bonds: what's your plan?

Post by anon_investor »

Mel Lindauer wrote: Sun Sep 19, 2021 10:43 pm
Eagle33 wrote: Sat Sep 18, 2021 9:22 pm
Johnny99 wrote: Sat Sep 18, 2021 9:44 am I want to use $20k (wife and I) to buy iBonds this year. What is the potential advantage or disadvantage to waiting a few more weeks to November for the updated rate?

Thanks
You could buy $10k total between you & wife now, then the other $10k in November.
IMO, there's absolutely no reason to wait. If you buy now, you'll get the current 3.54% for six months and then the expected higher rate for the next six months. Since you'll enjoy TWO good rates with ALL of your money, why would you even consider waiting if you have the funds now?
+1, absolutely 0 reason to wait. Buy $20k now. Buy $20k in January!
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Re: 2021 I Bonds: what's your plan?

Post by Mel Lindauer »

anon_investor wrote: Sun Sep 19, 2021 11:23 pm
Mel Lindauer wrote: Sun Sep 19, 2021 10:43 pm
Eagle33 wrote: Sat Sep 18, 2021 9:22 pm
Johnny99 wrote: Sat Sep 18, 2021 9:44 am I want to use $20k (wife and I) to buy iBonds this year. What is the potential advantage or disadvantage to waiting a few more weeks to November for the updated rate?

Thanks
You could buy $10k total between you & wife now, then the other $10k in November.
IMO, there's absolutely no reason to wait. If you buy now, you'll get the current 3.54% for six months and then the expected higher rate for the next six months. Since you'll enjoy TWO good rates with ALL of your money, why would you even consider waiting if you have the funds now?
+1, absolutely 0 reason to wait. Buy $20k now. Buy $20k in January!
Agree. Rinse and repeat again towards the end of Jan. (Remember, as long as you own them on the last day of the month, you'll earn a full month's interest.)
Best Regards - Mel | | Semper Fi
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anon_investor
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Re: 2021 I Bonds: what's your plan?

Post by anon_investor »

Mel Lindauer wrote: Sun Sep 19, 2021 11:29 pm
anon_investor wrote: Sun Sep 19, 2021 11:23 pm
Mel Lindauer wrote: Sun Sep 19, 2021 10:43 pm
Eagle33 wrote: Sat Sep 18, 2021 9:22 pm
Johnny99 wrote: Sat Sep 18, 2021 9:44 am I want to use $20k (wife and I) to buy iBonds this year. What is the potential advantage or disadvantage to waiting a few more weeks to November for the updated rate?

Thanks
You could buy $10k total between you & wife now, then the other $10k in November.
IMO, there's absolutely no reason to wait. If you buy now, you'll get the current 3.54% for six months and then the expected higher rate for the next six months. Since you'll enjoy TWO good rates with ALL of your money, why would you even consider waiting if you have the funds now?
+1, absolutely 0 reason to wait. Buy $20k now. Buy $20k in January!
Agree. Rinse and repeat again towards the end of Jan. (Remember, as long as you own them on the last day of the month, you'll earn a full month's interest.)
That's my plan, I just wish I had known about I Bonds BEFORE 2020! At least my 2020 purchase has a 0.2% fixed rate! Probably nothing compared to folks who have been buying for many years! :beer
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Re: 2021 I Bonds: what's your plan?

Post by Eagle33 »

Mel Lindauer wrote: Sun Sep 19, 2021 10:43 pm
Eagle33 wrote: Sat Sep 18, 2021 9:22 pm
Johnny99 wrote: Sat Sep 18, 2021 9:44 am I want to use $20k (wife and I) to buy iBonds this year. What is the potential advantage or disadvantage to waiting a few more weeks to November for the updated rate?

Thanks
You could buy $10k total between you & wife now, then the other $10k in November.
IMO, there's absolutely no reason to wait. If you buy now, you'll get the current 3.54% for six months and then the expected higher rate for the next six months. Since you'll enjoy TWO good rates with ALL of your money, why would you even consider waiting if you have the funds now?
I agree 100%, but for those folks that struggle making that decision I am offering an alternative that they may find more acceptable to their emotions. Not saying they should feed their emotions, but some people just can't avoid that need. Similar to those lump sum vs DCA decision that some people struggle with in making a decision.
Rocket science is not “rocket science” to a rocket scientist, just as personal finance is not “rocket science” to a Boglehead.
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Re: 2021 I Bonds: what's your plan?

Post by Mel Lindauer »

Eagle33 wrote: Mon Sep 20, 2021 2:38 pm
Mel Lindauer wrote: Sun Sep 19, 2021 10:43 pm
Eagle33 wrote: Sat Sep 18, 2021 9:22 pm
Johnny99 wrote: Sat Sep 18, 2021 9:44 am I want to use $20k (wife and I) to buy iBonds this year. What is the potential advantage or disadvantage to waiting a few more weeks to November for the updated rate?

Thanks
You could buy $10k total between you & wife now, then the other $10k in November.
IMO, there's absolutely no reason to wait. If you buy now, you'll get the current 3.54% for six months and then the expected higher rate for the next six months. Since you'll enjoy TWO good rates with ALL of your money, why would you even consider waiting if you have the funds now?
I agree 100%, but for those folks that struggle making that decision I am offering an alternative that they may find more acceptable to their emotions. Not saying they should feed their emotions, but some people just can't avoid that need. Similar to those lump sum vs DCA decision that some people struggle with in making a decision.
Yes, as you pointed out, it's really a personal decision, and it's better to do it that way than not at all (analysis paralysis). However, normally the only reason to wait when you have the money, given the current scenario, would be if one expects the fixed rate to go up. And if someone believes that, they probably also believe in the tooth fairy.
Best Regards - Mel | | Semper Fi
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Re: 2021 I Bonds: what's your plan?

Post by SmallSaver »

As long as we're talking I Bonds, I'm having some trouble figuring out this part from the wiki, specifically the bolded part:

"Interest accrues monthly and compounds semiannually.[1] The accrual date is the first of the month, and the redemption value does not change between accrual dates.[2] This means that on each 6th month anniversary of the issue date the value of the bond is increased by the interest earned during that 6 month period. However, until the bond is owned for 5 years, the value of the bond is reduced by the latest 3 months worth of interest which is a penalty for selling early. After 5 years of ownership there is no penalty and the full value of interest earned is included in the bond value shown on the Treasury Direct site. An additional restriction is that the bond may not be redeemed until it has been held for 12 months."

I can't reconcile the interest accruing monthly but the redemption value changing every 6 months. Say the composite rate is 4%/year and the redemption value updates 1/1 to $1,000. If I redeem the bond on 4/1 what amount do I get?

Edit: after reading that a few more times I think I maybe get it? So in my example I would get the $1,000 value of the bond plus the three months of simple interest earned for a total of $1,010.
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Re: 2021 I Bonds: what's your plan?

Post by BrokerageZelda »

SmallSaver wrote: Mon Sep 20, 2021 4:38 pm As long as we're talking I Bonds, I'm having some trouble figuring out this part from the wiki, specifically the bolded part:

"Interest accrues monthly and compounds semiannually.[1] The accrual date is the first of the month, and the redemption value does not change between accrual dates.[2] This means that on each 6th month anniversary of the issue date the value of the bond is increased by the interest earned during that 6 month period. However, until the bond is owned for 5 years, the value of the bond is reduced by the latest 3 months worth of interest which is a penalty for selling early. After 5 years of ownership there is no penalty and the full value of interest earned is included in the bond value shown on the Treasury Direct site. An additional restriction is that the bond may not be redeemed until it has been held for 12 months."

I can't reconcile the interest accruing monthly but the redemption value changing every 6 months. Say the composite rate is 4%/year and the redemption value updates 1/1 to $1,000. If I redeem the bond on 4/1 what amount do I get?
It looks like the wiki text is a mix of the earning rules for old and new EE Bonds.

https://www.treasurydirect.gov/indiv/re ... nvalue.htm

EE Bonds issued before May 1997 have interest credited every six months, but those issued May 1997 and after earn interest monthly.

All I Bonds earn interest monthly.

https://www.treasurydirect.gov/indiv/re ... dterms.htm
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Re: 2021 I Bonds: what's your plan?

Post by Angst »

BrokerageZelda wrote: Mon Sep 20, 2021 4:48 pm
SmallSaver wrote: Mon Sep 20, 2021 4:38 pm [Snip] ...
It looks like the wiki text is a mix of the earning rules for old and new EE Bonds.

https://www.treasurydirect.gov/indiv/re ... nvalue.htm

EE Bonds issued before May 1997 have interest credited every six months, but those issued May 1997 and after earn interest monthly.

All I Bonds earn interest monthly.

https://www.treasurydirect.gov/indiv/re ... dterms.htm
When it comes to EE Bonds, the ONLY thing that's relevant to me is the 20-year doubling; the minuscule fixed rate is irrelevant.
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Re: 2021 I Bonds: what's your plan?

Post by Walkure »

BrokerageZelda wrote: Mon Sep 20, 2021 4:48 pm
SmallSaver wrote: Mon Sep 20, 2021 4:38 pm As long as we're talking I Bonds, I'm having some trouble figuring out this part from the wiki, specifically the bolded part:

"Interest accrues monthly and compounds semiannually.[1] The accrual date is the first of the month, and the redemption value does not change between accrual dates.[2] This means that on each 6th month anniversary of the issue date the value of the bond is increased by the interest earned during that 6 month period. However, until the bond is owned for 5 years, the value of the bond is reduced by the latest 3 months worth of interest which is a penalty for selling early. After 5 years of ownership there is no penalty and the full value of interest earned is included in the bond value shown on the Treasury Direct site. An additional restriction is that the bond may not be redeemed until it has been held for 12 months."

I can't reconcile the interest accruing monthly but the redemption value changing every 6 months. Say the composite rate is 4%/year and the redemption value updates 1/1 to $1,000. If I redeem the bond on 4/1 what amount do I get?
It looks like the wiki text is a mix of the earning rules for old and new EE Bonds.

https://www.treasurydirect.gov/indiv/re ... nvalue.htm

EE Bonds issued before May 1997 have interest credited every six months, but those issued May 1997 and after earn interest monthly.

All I Bonds earn interest monthly.

https://www.treasurydirect.gov/indiv/re ... dterms.htm
The wiki passage you quoted leaves out a key word. The actual text on the TD site states, "...the principal value of the bond is increased..." So each month the bond accrues simple interest on the current "principal value," which is reset every 6 months to include all prior interest paid ("compounds semiannually"). But the redemption value at any time is equal to the principal value plus any subsequent monthly interest (less any penalties if held <5 years).
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Re: 2021 I Bonds: what's your plan?

Post by Barefootgirl »

I got all the way through to the end of my tax software (Tax Hawk), anticipating a refund that I could turn into a paper I Bond that I could add to my 2020 bucket of I Bond purchases only to learn that this software does not support that....I suppose when I file for 2021, hopefully not later than early February 2022, I can pad the Treasury Direct account.

It never occurred to me that a tax software package would not be able to accomodate the simple prep of Form 8888.

For all who prepare their own...be aware of this. I have no idea if this is an issue with other tax software packages.
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Re: 2021 I Bonds: what's your plan?

Post by Barefootgirl »

I want to use $20k (wife and I) to buy iBonds this year. What is the potential advantage or disadvantage to waiting a few more weeks to November for the updated rate?

It wouldn't be too hard to estimate this...what's the money earning right now vs. the current I bond rate...vs the expected rate in November - then add in the 6 month factor.

Ultimately it also depends on when you think you might be cashing the bonds in.
How many retired people does it take to screw in a lightbulb? Only one, but he takes all day.
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