https://www.doctorofcre
Code:
https://www.doctorofcredit.com/us-treasury-bonds-rate-set-to-increase-to-7-12-rate-i-bonds/
Comparing Series EE and Series I Savings Bonds
https://www.treasurydir
Code:
https://www.treasurydirect.gov/indiv/research/indepth/ebonds/res_e_bonds_eecomparison.htm
1. This 7.12% rate on I bond is for next six months only (April 2022).
2. If, in April inflation is higher than today, they will earn higher, if inflation is less they will earn less for next six months, so basically rate changes every six months based on inflation.
3. You can keep these for 30 years or withdraw earlier (see #4 below)
4. You need to wait for 1 year before you can withdraw
5. If you withdraw between 1 yr and 5 yr, you lose last 3 months of interest (see #2 above, so if based on inflation if interest it was paying was reduced, you lose reduced interest)
6. After 5 year, no penalty so you don't lose last 3 months of interest
7. No state taxes on distribution (as per my understanding)
8. If you used for certain causes (like education) and your AGI is below certain value, you don't pay Federal tax as well (as per my understanding)
9. Buy at the end of month (on the 30th of a 31-day month, or 29th of a 30-day month), interest starts accruing from the 1st of the same month.
10. Interest rate can go down to 0% but not lower. This happened in 2009 during deflation.
Purchasing for others - https://slickdeals.net/f/15497017-us-treasury-series-i-savings-bonds-inflation-rate-earnings-nov-21-april-22-7-12-interest-limit-10k-year-per-person?p=152307
FAQs Concerning the Change in the Annual Purchase Limit for Savings Bonds [treasurydirect.gov]
Buy I Bonds as a Gift: What Works and What Doesn't [thefinancebuff.com]
Historical bond rate chart:
https://www.treasurydir
Code:
https://www.treasurydirect.gov/indiv/research/indepth/ibonds/IBondRateChart.pdf
May 2021 3.54%
Nov 2020 1.68%
May 2020 1.06%
Nov 2019 2.22%
May 2019 1.9%
Nov 2018 2.83%
One trick to max out these I bonds: Overpay your estimated taxes now, by at least $5000, and then you can apply your refund of up to $5000 to buy $5000 more of I bonds, so it brings your total per year up to $15,000. The $5000 will come as paper I bonds, but you can mail them to the Treasury and convert them into electronic bonds.
Track inflation and iBond here
Update Apr 2022 [wordpress.com]
About this offer:
How do I buy a Series I bond?
Must register or sign-in to your free TreasuryDirect.gov account and link a bank account.
Electronically: Online via TreasuryDirect (including through payroll direct deposit)
Paper: By mail when you file your federal tax return
Click here to view a Guided Tour
What is a Series I bond? (source)
"A savings bond that earns interest based on combining a fixed rate and an inflation rate."
You may use Series I bonds to:
Save in a low-risk product that helps protect your savings from inflation
Supplement your retirement income
Give as a gift
Pay for education
Click here for more information about Series I Bonds
What interest does a Series I bond earn? (source)
A combination of a fixed rate that stays the same for the life of the bond and an inflation rate that is set twice a year.
For bonds issued from November 2021 through April 2022, the combined rate is 7.12%
On May 1, 2022, the rate is scheduled to update, and is expected to be over 9%. Source 1 [cnbc.com] Source 2 [tipswatch.com]
How to buy: After registering and logging in, click on "BuyDirect" on the top menu bar. Check the "Series I" radio button.
This post can be edited by most users to provide up-to-date information about developments of this thread based on user responses, and user findings. Feel free to add, change or remove information shown here as it becomes available. This includes new coupons, rebates, ideas, thread summary, and similar items.
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You can copy/paste password at treasurydirect.gov
Auto method:
1. setup a bookmarklet in Firefox or Chrome by creating a new bookmark and putting the following in the URL section and save:
Code:
javascript:Array.from(document.getElementsByTagName("input")).forEach((el)=>el.removeAttribute("readonly"))
Manual method:
1. Press F12 to show the raw HTML code
2. Click the Picker and click on the read-only password editbox
3. Delete the readonly stuff in code
4. The password box is no longer readonly to you. Now you can enter the password without using virtual keyboard or press the Auto fill button on your password manager and log in
Per @cinderblockfist -- Form 5444 on the Treasury site has been updated (Aug 2022) to allow notary signatures.
This is a good article that provides step-by-step instructions on how to buy Series I bonds from Treasury Direct. "Bonds' Record-High Rates Are Worth the Hassle: How to Purchase Savings Bonds Online":
https://www.cnet.com/personal-fin...ds-online/
Top Comments
Also, it is highly unlikely that inflation is going to go down to 0% anytime soon, so most of us will just leave the money in there for at least 5 years if not longer. Sure beats the 0.5% - 1% savings interest I was getting.
Buy today: 7.12% for next 6 mo + 9.6% for 6 mo after + (unknown)% for next 6 mon
Buy in May: 9.6% for 6 mo after + (unknown)% for next 6 mon + (unknown)% for next 6 mon
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2.2K Comments
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so does it mean there is a chance we can't get our money back?
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If US defaults on bonds, I think these will be the least of my worries
As noted earlier- the US government has defaulted on bond promises multiple times, including multiple times in the 20th century.
Specifically they defaulted on type of repayment promised in the original terms- and the supreme court basically shrugged and said "Yeah, they control the money so they can do that"
It's less relevant here, because the repayment term is not complicated and is in a form they can just print more of- but the idea the US has always paid exactly as promised just ain't so.
This badly misunderstands the whole concept and math of the idea.
Here's a really simple example:
BOND:
Lock up $10,000 for 12 months (effectively 15 to avoid penalty on the first 12 months interest) and then pull it out at 15 months. And let's pretend it STAYS at 9.62 that whole 12 months for easy math, though it could go higher or lower (more likely lower).
You get $962 interest, then pay say 24% tax, and you net:
Your original 10k plus $731.12 in post-tax interest= $731.12 profit.
But if you have 10k in "normal" spending to do, you could instead:
Sign up for 3 different credit card signups where you get $500 for 3-4k spend.
Use the 10 to do that spend.
You end up with:
10k of "stuff" or "paid bills"
plus
$1500 in non-taxable cash.
That's 2x the gain as the bonds.
(actually more, since you'd also earn at least 1-2% on the 10k spend for another $100-200 in non-taxable rewards)
And if you do this with certain cards you'd end up with even more due to some perks and credits available... potentially a LOT more if you're someone who travels decent amount.
All THAT said, it's obviously not apples to apples, because the notion of the bonds is you're using 10k for which you DO NOT have any needed spending for the next 15 months (otherwise you couldn't "afford" to buy the bonds with it).
But apart from that, yeah the return on 10k in CC signup spend beats the interest on the bonds handily.
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Also, it is highly unlikely that inflation is going to go down to 0% anytime soon, so most of us will just leave the money in there for at least 5 years if not longer. Sure beats the 0.5% - 1% savings interest I was getting.
Specifically they defaulted on type of repayment promised in the original terms- and the supreme court basically shrugged and said "Yeah, they control the money so they can do that"
It's less relevant here, because the repayment term is not complicated and is in a form they can just print more of- but the idea the US has always paid exactly as promised just ain't so.
This badly misunderstands the whole concept and math of the idea.
Here's a really simple example:
BOND:
Lock up $10,000 for 12 months (effectively 15 to avoid penalty on the first 12 months interest) and then pull it out at 15 months. And let's pretend it STAYS at 9.62 that whole 12 months for easy math, though it could go higher or lower (more likely lower).
You get $962 interest, then pay say 24% tax, and you net:
Your original 10k plus $731.12 in post-tax interest= $731.12 profit.
But if you have 10k in "normal" spending to do, you could instead:
Sign up for 3 different credit card signups where you get $500 for 3-4k spend.
Use the 10 to do that spend.
You end up with:
10k of "stuff" or "paid bills"
plus
$1500 in non-taxable cash.
That's 2x the gain as the bonds.
(actually more, since you'd also earn at least 1-2% on the 10k spend for another $100-200 in non-taxable rewards)
And if you do this with certain cards you'd end up with even more due to some perks and credits available... potentially a LOT more if you're someone who travels decent amount.
All THAT said, it's obviously not apples to apples, because the notion of the bonds is you're using 10k for which you DO NOT have any needed spending for the next 15 months (otherwise you couldn't "afford" to buy the bonds with it).
But apart from that, yeah the return on 10k in CC signup spend beats the interest on the bonds handily.
So locking in at 8.5% for 12 months is likely to lose you a couple % under inflation in just next few months.
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