Anyone investing in Series I Bonds?

[WebSnyper]

Anyone investing in these? Any drawbacks or concerns?

I bonds — TreasuryDirect

www.treasurydirect.gov

If I'm maxing out 401, HSA, and other tax benefit and employer matching type of accounts, any concerns with these as an additional investment?

 

[hoosierdoc]

My dad mentioned these recently. Sorta tempting

 

[Clark & Addison]

We started last year and have bought the limits in 2021 and 2022. If you've got extra money laying around after maxing your 401k and HSA, I'd recommend I-bonds. I-bonds bought after are currently paying 9.62% annually for the next 6 months. After that the rate will change based on inflation. If inflation completely disappears in the next 6 months (next to no chance of that happening), the rate would drop to zero for the following six months. Even if that were the case, you'd still come out ahead of keeping money in a savings account as you'd end up with 4.81% for the year.

The biggest drawback is that money is completely inaccessible for 12 months. After 12 months and until held for 5 years, you lose 3 months interest (if interest rates drop this is less of a drawback). Another drawback is you can only buy $10k each year per person.

 

[WebSnyper]

We started last year and have bought the limits in 2021 and 2022. If you've got extra money laying around after maxing your 401k and HSA, I'd recommend I-bonds. I-bonds bought after are currently paying 9.62% annually for the next 6 months. After that the rate will change based on inflation. If inflation completely disappears in the next 6 months (next to no chance of that happening), the rate would drop to zero for the following six months. Even if that were the case, you'd still come out ahead of keeping money in a savings account as you'd end up with 4.81% for the year.

The biggest drawback is that money is completely inaccessible for 12 months. After 12 months and until held for 5 years, you lose 3 months interest (if interest rates drop this is less of a drawback). Another drawback is you can only buy $10k each year per person.

Have you had any issues with the TreasuryDirect site? I've seen some complaints about bad customer service if folks have issues with their login, etc. Being govt that doesn't surprise me, but is a concern if it keeps me from accessing $$$

 

[Clark & Addison]

Have you had any issues with the TreasuryDirect site? I've seen some complaints about bad customer service if folks have issues with their login, etc. Being govt that doesn't surprise me, but is a concern if it keeps me from accessing $$$

I haven't had any issues. I've heard complaints about how outdated the website is and that if you forget your username and/or password it can take a while to get access to your account. Everything has worked the way it should for me.

 

[WebSnyper]

I haven't had any issues. I've heard complaints about how outdated the website is and that if you forget your username and/or password it can take a while to get access to your account. Everything has worked the way it should for me.

Thanks for the info. This is good to know.

 

[Leo]

I spent 25 years buying I Bonds. They are ok. The problem was under barack obummer they decided there was Zero inflation, so I only got the add rate, which was less than inflation. They are far better return than any CD's I have in banks. And unlike my 401k investments, They have not lost any principle this year. I tried to buy $30,000 of them in 2009 (when they still sent you paper certificates). They sent me a $5000 I bond and a check for $25,000 back. They seem to have a rule that citizens can not buy more than $5000 a year. At the same time china was buying millions in Treasury bills, go figure.

I know that the paper is only valuable if the government decided to keep it valuable. For long term, I don't like internet only savings vehicles. I understand that all bonds are now just a number in an electronic account.

 

[Born2vette]

Might also look into a backdoor roth ira. IIRC $6k a year for you and your spouse ($12k total).

 

[WebSnyper]

I spent 25 years buying I Bonds. They are ok. The problem was under barack obummer they decided there was Zero inflation, so I only got the add rate, which was less than inflation. They are far better return than any CD's I have in banks. And unlike my 401k investments, They have not lost any principle this year. I tried to buy $30,000 of them in 2009 (when they still sent you paper certificates). They sent me a $5000 I bond and a check for $25,000 back. They seem to have a rule that citizens can only buy more than $5000 a year. At the same time china was buying millions in Treasury bills, go figure.

I know that the paper is only valuable if the government decided to keep it valuable. For long term, I don't like internet only savings vehicles. I understand that all bonds are now just a number in an electronic account.

Yep, the limit is currently $10k that you can purchase direct via internet and an additional $5k if you arrange to purchase via Tax return, for a total of $15k annually. I won't get near that with what I'm putting in other investments but may use this to take advantage in some small way of the inflation situation.

 

[WebSnyper]

Might also look into a backdoor roth ira. IIRC $6k a year for you and your spouse ($12k total).

Yep, need to look into this as well, and make sure I understand all the ramifications. Need to find a financial planner I trust and can afford.

 

[hooky]

We maxed out last year and then again this year for I bonds. I don't see this "transitory inflation" going away anytime soon, so we put our emergency fund into them with a stagger on the 1 year hold term. At this point you're only keeping pace with inflation, but better than losing money in something that isn't keeping up with inflation like a MM account or CD.

 

[WebSnyper]

Setup my account and reviewing more details before I make any purchases.

So for those that have already invested in these, I'm checking out the beneficiary vs joint account type of thing. I've seen some info on registration of the securities, but does that only happen after you make a purchase?

Any downside of just doing an individual account but placing my wife as the beneficiary vs figuring out how to register both of us as owners?

And either way is the beneficiary or the additional owner only setup after you have purchased some of the Series I securities?

I'm still looking at the documentation on the site but some of it is less than straight forward.

 

[hooky]

Setup my account and reviewing more details before I make any purchases.

So for those that have already invested in these, I'm checking out the beneficiary vs joint account type of thing. I've seen some info on registration of the securities, but does that only happen after you make a purchase?

Any downside of just doing an individual account but placing my wife as the beneficiary vs figuring out how to register both of us as owners?

And either way is the beneficiary or the additional owner only setup after you have purchased some of the Series I securities?

I'm still looking at the documentation on the site but some of it is less than straight forward.

I'm no expert, but it's $10k/individual/year, so I have an account and my wife has an account with each of us as the primary beneficiary of the other. The best way probably would have been a joint account, but I didn't worry about figuring that part out.

Maybe this will help. https://thefinancebuff.com/i-bonds-beneficiary-vs-second-owner-treasury-direct.html

 

[WebSnyper]

I'm no expert, but it's $10k/individual/year, so I have an account and my wife has an account with each of us as the primary beneficiary of the other. The best way probably would have been a joint account, but I didn't worry about figuring that part out.

Maybe this will help. https://thefinancebuff.com/i-bonds-beneficiary-vs-second-owner-treasury-direct.html

Thanks, checking that out now.

 

[WebSnyper]

I'm no expert, but it's $10k/individual/year, so I have an account and my wife has an account with each of us as the primary beneficiary of the other. The best way probably would have been a joint account, but I didn't worry about figuring that part out.

Maybe this will help. https://thefinancebuff.com/i-bonds-beneficiary-vs-second-owner-treasury-direct.html

Definitely interesting and different than other types of investments that allow beneficiaries including contingent beneficiaries at the account level and set it once and done unless something changes. Having to update them as you buy them would be something to stay on top of.

Also kind of interesting that one can revoke secondary ownership, etc.

Definitely some quirks to this to be aware of.

 

[hooky]

Definitely interesting and different than other types of investments that allow beneficiaries including contingent beneficiaries at the account level and set it once and done unless something changes. Having to update them as you buy them would be something to stay on top of.

Also kind of interesting that one can revoke secondary ownership, etc.

Definitely some quirks to this to be aware of.

Low bid gov't approach to this, just like everything, I guess.

I can't take my wife off an IRA as a beneficiary without getting something from her in writing or divorcing her, but no problem taking her off any and all holdings in that account without her knowledge or vice versa. LOL

 

[WebSnyper]

I finally got around to purchasing a small amount of Series I bonds in the past month.

If folks are interested, sounds like the rates for the next period will drop for bonds purchased after 28-Oct. I didn't put in as much as I'd like due to some upcoming anticipated expenses, but did pull forward a small amount of investment that I would have done later in the year to get the current rate before it drops.

Here's how to invest risk-free money in government I-bonds at a return of nearly 10% before rates reset at the end of October

 

[tsm]

You can also buy I-bonds through a revocable trust if you want more than the $10K individual limit allows.

 

[ws6guy]

So if I'm understanding it correctly if I buy into I Bonds before the Nov 1st rate change I'm locked into the 9% rate for the next 6 months? Then after 6 months I get what ever the current rate is? I assume then this repeats every 6 months?

Looks like their website is crashing cause of the mad rush before the end of the month deadline

 

[WebSnyper]

So if I'm understanding it correctly if I buy into I Bonds before the Nov 1st rate change I'm locked into the 9% rate for the next 6 months? Then after 6 months I get what ever the current rate is? I assume then this repeats every 6 months?

Looks like their website is crashing cause of the mad rush before the end of the month deadline

Website is getting hammered. Yesterday and today the site was not emailing the one time pass codes properly, site was down at several times during the day.

The cutoff to purchase to have it process in time for the current 6 month lock is 28-Oct.

What are Series I Savings Bonds? | The Motley Fool

Here's a guide to what I-bonds are, how they work, the pros and cons of owning them, as well as how to buy them.

www.fool.com

I bonds — TreasuryDirect

treasurydirect.gov