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Treasury I Bond yield discrepancy
February 7, 2023 at
11:31 AM
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I purchased 2 I-Bonds, one with an issue date of Oct 01, 2021 showing 9.62% yield, another one with issue date of Jan 01, 2022 with 6.48%.
But the current value on the one that was purchased earlier with high yield is showing less value than the one with low yield.
I'm attaching screenshot.
Am I missing something?
But the current value on the one that was purchased earlier with high yield is showing less value than the one with low yield.
I'm attaching screenshot.
Am I missing something?
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But the current value on the one that was purchased earlier with high yield is showing less value than the one with low yield.
I'm attaching screenshot.
Am I missing something?
As understand the way TD shows valuations on I-bonds, it factors in a 3 month penalty on I-bonds under 5 years since to cash them in you would incur a penalty equal to the last 3 months interest. The only way to know for sure would be to calculate the interest earned for each month of each bond and then subtract the last 3 months out. Since the rate changes every 6 months, and is good for 6 months, you would have to look up those values and calculate accordingly.
Your ibonds so far...
Oct 21:
Oct 21-march 22 - 3.54% - $177 interest
April 22- Sept. 22 - 7.12% - $362 interest
October 22 -9.62% - $84.49 interest (interest from Nov,Dec,Jan are excluded from Treasury direct to reflect the 3 month interest penalty for early withdrawal)
Annualized Average: 5.66% for 13 months
Total interest~ $624
Jan 22:
Jan 22- jun 22 - 7.12% -$356
July 22-Oct 22 - 9.62% -$332
Annualized Average: 8.12% for 10 months
Total interest - $688
Timing is everything. You bought the October bond just before rates shot up, so it is a bit behind in collecting the higher rates.
Your ibonds so far...
Oct 21:
Oct 21-march 22 - 3.54% - $177 interest
April 22- Sept. 22 - 7.12% - $362 interest
October 22 -9.62% - $84.49 interest (interest from Nov,Dec,Jan are excluded from Treasury direct to reflect the 3 month interest penalty for early withdrawal)
Annualized Average: 5.66% for 13 months
Total interest~ $624
Jan 22:
Jan 22- jun 22 - 7.12% -$356
July 22-Oct 22 - 9.62% -$332
Annualized Average: 8.12% for 10 months
Total interest - $688
Timing is everything. You bought the October bond just before rates shot up, so it is a bit behind in collecting the higher rates.
I'm going keep the money on IBond for some more time. May be after Jun 2023 I'll withdraw.
But the current value on the one that was purchased earlier with high yield is showing less value than the one with low yield.
I'm attaching screenshot.
Am I missing something?
Later last year, I tried to see why the interest that had accrued didn't match my expected rate. I was already aware of the fact that the rate is actually two components; the fixed portion and the component tied to inflation. Also knew what the new rate was when it was published months later. Still couldn't match the website so I finally sent them an e-mail. I was pleasantly surprised with a quick reply saying they couldn't get into details using e-mail and asked me to just call them and they'd be happy to review the calculations. You may wish to give them a ring.
I bought (2) $10,000 I-bonds on October 12, 2022. One in my name, one in my husband's. I checked the current holdings for both today and it shows a valuation of only $10,156.00. Given the rates when I bought, I was expecting them to be worth more than they are. It's very confusing.
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