I Bonds, anyone?

[countrygirl2]

Likely son, but he can cash them in a year or two ahead for 2 or 3 years a bit early to spread it out. Right now interest is over $70k so far.

I haven't looked at Walmart but I invested about $1200 and it's over $30k, so another one.
 
I am enjoying watching them accrue interest, love it. 

Ohe well, better then losing money.

[seriousthistime]

www.consumerreports.org/financial-planning/how-i-bonds-can-help-you-fight-inflation-a3038771351/?fbclid=IwAR1dwcuVcQKeY9gKvLe9cqND56wWh9foBNRE-H6xmr6mOFny72PdmY08tAs

I think this article sets out the pros and cons pretty well. 

And wow.  "Sales of I Bonds grew to more than $9 billion during the six months ending in April, compared with just $1 billion for the entire year of 2021, U.S. Treasury data shows."

[azucena]

Jun 15, 2022 11:41:15 GMT -5 seriousthistime said:

www.consumerreports.org/financial-planning/how-i-bonds-can-help-you-fight-inflation-a3038771351/?fbclid=IwAR1dwcuVcQKeY9gKvLe9cqND56wWh9foBNRE-H6xmr6mOFny72PdmY08tAs

I think this article sets out the pros and cons pretty well. 

And wow.  "Sales of I Bonds grew to more than $9 billion during the six months ending in April, compared with just $1 billion for the entire year of 2021, U.S. Treasury data shows."

Interesting tax info from the article:

    One key benefit to the bonds: You can defer taxes on the interest you earn until you cash them out. At that time, you’ll owe federal income tax, but I Bonds aren’t subject to state or local
    income tax. (You can also choose to report the interest every year.)



    For those paying for college, you may qualify for an education tax break, which will let you exclude some or all of the interest on redeemed I Bonds from federal income tax. For more     details, see IRS Form 8815 (PDF).

[minnesotapaintlady]

Jun 15, 2022 11:54:28 GMT -5 azucena said:

Jun 15, 2022 11:41:15 GMT -5 seriousthistime said:

www.consumerreports.org/financial-planning/how-i-bonds-can-help-you-fight-inflation-a3038771351/?fbclid=IwAR1dwcuVcQKeY9gKvLe9cqND56wWh9foBNRE-H6xmr6mOFny72PdmY08tAs

I think this article sets out the pros and cons pretty well. 

And wow.  "Sales of I Bonds grew to more than $9 billion during the six months ending in April, compared with just $1 billion for the entire year of 2021, U.S. Treasury data shows."

Interesting tax info from the article:

    One key benefit to the bonds: You can defer taxes on the interest you earn until you cash them out. At that time, you’ll owe federal income tax, but I Bonds aren’t subject to state or local
    income tax. (You can also choose to report the interest every year.)



    For those paying for college, you may qualify for an education tax break, which will let you exclude some or all of the interest on redeemed I Bonds from federal income tax. For more     details, see IRS Form 8815 (PDF).

Keep in mind though that if bonds held at Treasury Direct mature, they automatically cash them out on their maturity date. You can't hold onto some if you're trying to avoid the interest in a specific year.

Not that the 30 year maturity date will ever be an issue for me.

[Rukh O'Rorke]

Jun 15, 2022 11:59:27 GMT -5 minnesotapaintlady said:

Jun 15, 2022 11:54:28 GMT -5 azucena said:

Interesting tax info from the article:

    One key benefit to the bonds: You can defer taxes on the interest you earn until you cash them out. At that time, you’ll owe federal income tax, but I Bonds aren’t subject to state or local
    income tax. (You can also choose to report the interest every year.)



    For those paying for college, you may qualify for an education tax break, which will let you exclude some or all of the interest on redeemed I Bonds from federal income tax. For more     details, see IRS Form 8815 (PDF).

Keep in mind though that if bonds held at Treasury Direct mature, they automatically cash them out on their maturity date. You can't hold onto some if you're trying to avoid the interest in a specific year.

Not that the 30 year maturity date will ever be an issue for me.

yeah - but why? Cashing them in before 30? or just don't care about taxes in 30 years?

[minnesotapaintlady]

Jun 15, 2022 14:33:34 GMT -5 Rukh O'Rorke said:

Jun 15, 2022 11:59:27 GMT -5 minnesotapaintlady said:

Keep in mind though that if bonds held at Treasury Direct mature, they automatically cash them out on their maturity date. You can't hold onto some if you're trying to avoid the interest in a specific year.

Not that the 30 year maturity date will ever be an issue for me.

yeah - but why? Cashing them in before 30? or just don't care about taxes in 30 years?

Cashing them in.  I'll be in my 80's before the first ones mature, the money in there is my savings for current stuff, my kid's K-12 tuition, and hopefully some to bridge to SS.  No plans to hold them for decades.  That 0% fixed rate won't seem too appealing once the inflation rate drops back to normal anyhow.

I'm already eyeballing up the 10K bond I bought in 5/21 to cover what's left of tuition for next year and my new stove/microwave.  But not touching it while it's earning 9.62%. I'll take out a HELCO or 401K loan to pay it off when the credit card 0% expires in December if I have to.

[countrygirl2]

I  got the bonds out of the safety deposit box, that I bought for son. Turns out they were in 2001, one in 2003, and the rest in 2006.

He had an old truck and car, the car from mom, and I think the old truck was ours. Hubs got a company truck so gave him that. He had a cheap boat too. He was being sent overseas so sold all of it and I bought bonds for him. About $7500 worth. I just calculated them today, worth $16,600. And they don't mature till 2031, 2033, and 2035. So, he can enjoy earning while the rates are high and cash them in if he wants. I bought them made out to he or I, so he can cash them.

He never bothered his money that was saved and I know in the early years he needed money, but like his dad he wouldn't spend it. I look for him to pay that on his house debt when it matures.

[Rukh O'Rorke]

Jun 15, 2022 14:57:31 GMT -5 minnesotapaintlady said:

Jun 15, 2022 14:33:34 GMT -5 Rukh O'Rorke said:

yeah - but why? Cashing them in before 30? or just don't care about taxes in 30 years?

Cashing them in.  I'll be in my 80's before the first ones mature, the money in there is my savings for current stuff, my kid's K-12 tuition, and hopefully some to bridge to SS.  No plans to hold them for decades.  That 0% fixed rate won't seem too appealing once the inflation rate drops back to normal anyhow.

I'm already eyeballing up the 10K bond I bought in 5/21 to cover what's left of tuition for next year and my new stove/microwave.  But not touching it while it's earning 9.62%. I'll take out a HELCO or 401K loan to pay it off when the credit card 0% expires in December if I have to.

Good point. I was thinking of keeping long term, but as you say, may not make as good of sense as it does now.

[Tiny]

Hmm,

9,000,000,000,000/10,000 = 900,000 "10K allotments per person (more or less)"


So, a guesstimate of about 900,000 Americans bought I-Bonds in the first quarter of 2022.

Some got more than one 10K allotment (tax return, bought gift bonds, used a trust, etc) and perhaps some people had less than 10K to invest

[Tiny]

Jun 15, 2022 20:01:37 GMT -5 Rukh O'Rorke said:

Jun 15, 2022 14:57:31 GMT -5 minnesotapaintlady said:

Cashing them in.  I'll be in my 80's before the first ones mature, the money in there is my savings for current stuff, my kid's K-12 tuition, and hopefully some to bridge to SS.  No plans to hold them for decades.  That 0% fixed rate won't seem too appealing once the inflation rate drops back to normal anyhow.

I'm already eyeballing up the 10K bond I bought in 5/21 to cover what's left of tuition for next year and my new stove/microwave.  But not touching it while it's earning 9.62%. I'll take out a HELCO or 401K loan to pay it off when the credit card 0% expires in December if I have to.

Good point. I was thinking of keeping long term, but as you say, may not make as good of sense as it does now.

It could make sense to hold the IBonds with a 0% fixed rate long term - IF the fixed rate never changes. The variable rate would (kind of) negate inflation (no matter if it's 2% or 9%).

If the fixed rate ever goes up, holding the 0% fixed rate IBond starts to not look like such a good deal.

I guess it all depends on why the IBonds were bought in the first place if you will keep them long term or not.

I dumped Emergency Fund money into I-Bonds in 2021/2022 with the intent I would hold them "short term" based on the variable interest rate. I-bonds are "sexy" right now - I expect they will eventually go back to being humdrum in the future.

I'm not sure I will have 1k much less 10K in 2023 to buy more I-Bonds. I-Bonds might not be the best place for that "excess" money in 2023.

[minnesotapaintlady]

I have a feeling once the rates drop to the typical 1-2% or so they will not be getting the crazed following that they have in the last year.

[countrygirl2]

I'm making near $1500 a month now from the bonds. There are 2 earning over 11% and quite a few earning over 10%. The money should start racking up nicely now, for how long we will see. As they didn't earn a lot for a long time, so this is making up for those years. Still I'm not complaining.

[Rukh O'Rorke]

I love checking on these first of the month.  

Seeing the interest, and then more bonds changing over to the higher 9+% interest rate. 

I'm only getting 100/month interest at present., only have 20k saved over past 2 years. So far a total of 500 in interest. so pretty good.

Wonder where the interest rate will go in october...only 2 months away.....

[minnesotapaintlady]

Aug 1, 2022 12:26:18 GMT -5 Rukh O'Rorke said:

Wonder where the interest rate will go in october...only 2 months away.....

You can get a pretty good idea of what it's going to be in October, but it doesn't actually change until November.

Most of mine are still at 7.12%. (25K of 35K).  Still, $208 this month.  Slowly but surely.

[Rukh O'Rorke]

Aug 1, 2022 13:14:59 GMT -5 minnesotapaintlady said:

Aug 1, 2022 12:26:18 GMT -5 Rukh O'Rorke said:

Wonder where the interest rate will go in october...only 2 months away.....

You can get a pretty good idea of what it's going to be in October, but it doesn't actually change until November.

Most of mine are still at 7.12%. (25K of 35K).  Still, $208 this month.  Slowly but surely.

I have no clue! I could see it staying the same, going slightly higher, or being cut in half.

What is your guesstimate?

[minnesotapaintlady]

Aug 1, 2022 13:20:22 GMT -5 Rukh O'Rorke said:

Aug 1, 2022 13:14:59 GMT -5 minnesotapaintlady said:

You can get a pretty good idea of what it's going to be in October, but it doesn't actually change until November.

Most of mine are still at 7.12%. (25K of 35K).  Still, $208 this month.  Slowly but surely.

I have no clue! I could see it staying the same, going slightly higher, or being cut in half.

What is your guesstimate?

I have no idea.  I'm saying once the CPI drops on October 13th the variable rate is no longer a mystery.  Once that is published it takes about 30 seconds for all the math geeks to get it calculated out to know what the new rate will be in November.  Fixed isn't known but in the past it's been more of a "bump it up to boost sales" rate, so most don't feel it will change because they have no incentive to pay more on them right now with record breaking bond purchases this year.

[azucena]

I'm geeking out about the interest accumulation too.  Soooo much better than the couple of bucks/month the cash was earning in my savings account.  That just mad me sad.

[minnesotapaintlady]

I seemed to have forgotten my password...again.  I'm sure I wrote it down somewhere and will eventually come across it. Won't be buying until next spring anyhow.  Not going to risk getting locked out like last time!

I saved all my bonds in the calculator so I just refresh that every month.  Up $208 this month.  Next month 15K (plus interest) roll to the 9.62% rate and in October all of them will be at that rate for one month. 

[seriousthistime]

I measure the interest earned in airline tickets. 

Each $400 in interest is another airline ticket. 

[azucena]

Ready to buy an ibond for DD14.  Treasury direct site is not intuitive at all.  Can anyone give me detailed directions on opening a minor account?

[minnesotapaintlady]

Aug 5, 2022 8:28:19 GMT -5 azucena said:

Ready to buy an ibond for DD14.  Treasury direct site is not intuitive at all.  Can anyone give me detailed directions on opening a minor account?

I think I just followed this when I bought one for Carrot. 

How do I open an account for a minor?

A Minor account is a custodial account you may establish for a child under the age of 18 if you are a parent or person providing chief support of the child. You may purchase, redeem, receive gifts, and perform other transactions within an individual account on behalf of the minor. You can even create a customized name, such as "Ben's College Fund", for the account. When the minor reaches age 18 and establishes a Primary TreasuryDirect account, you may de-link the securities from the Minor account to move them to the new Primary account. Note: Minor accounts are not available in entity accounts. To open an account for a minor within an individual account:

Log into your primary TreasuryDirect ® account.
Click the ManageDirect tab at the top of the page.
Under the heading Manage My Linked Accounts, click "Establish a Minor Linked Account".
The Establish an Account for a Minor page will appear.
Complete all of the information for the minor (the minor's Middle Name or Initial field is optional).
Complete the Give Your Account a Name field.
Select Use my Primary Account Information if you want to use the account address and contact information or you may select Enter New Account Information.
The Bank Information displays from your primary account. Instructions are provided if you choose to change the Bank Information once the minor account has been established.
Read the statements in the Taxpayer Identification Number Certification box, check the box indicating you agree with the statements, and click "Submit".
On the Review page, review the Account Information.
Click "Edit" to go back to the previous page to make corrections.
When the Account Information is correct, read the Certification statements and click "Submit".
A personalized account name for the Minor account, followed by its TreasuryDirect account number, appears in the top right corner of the Account Info page. The two arrows let you know that you're presently viewing the minor's account. To go back to your primary account, click the link above the minor account number.

www.treasurydirect.gov/indiv/help/tdhelp/howdoi.htm

[azucena]

thx mpl.  I did try to find those type of directions but couldn't find it.

DD14 had about $4k saved in her personal savings account, mostly money we've deposited and us saying she has to save 20% of gifts and now babysitting money.   Payday this time pushed DH/my savings account above target goal, so I siphoned off $6k and will buy $10k for her.  Thinking if I do that each of the next 4 yrs that gives us $40k plus interest directly earmarked for college tuition.

Got extra smart and opened on for DD10 too while I had the directions handy   Didn't buy anything yet.  Didn't want to get ahead of myself and move too much savings bc I need to think ahead for buying 3 ibonds for us in 2023 which means I'll need 30k.

[minnesotapaintlady]

Yeah, their site is awful.  General Google searches get you there easier than trying to search their website.

[countrygirl2]

$65,850.00 Total Investment

$140,418.82 Total Value

$74,568.82 Interest Earned

$7,366.30 Year To Date Interest

I hope these earn well for 2 or 3 more years.  

Of course if inflation gets under control, interest rates will be reduced.

[countrygirl2]

By Nov will be this much, then the rates change so I could only carry it out that far.


$65,850.00 Total Investment

$144,251.62 Total Value

$78,401.62 Interest Earned

$11,199.10 Year to date interest

I'm really curious what the interest will be after that.

[Rukh O'Rorke]

treasury direct account access is down....just when I wanna look at it....

[countrygirl2]

I tried to sit up treasury direct long ago, I'm not sure if I did or not, need to check one day. But I like the way it was, just go to the bank and buy bonds, so much easier and I have a piece of paper in my hand. Old fashioned.

[minnesotapaintlady]

Still 5 days from the official "estimate" day for the new variable rate, but it's looking like around 6%.

[Rukh O'Rorke]

Oct 8, 2022 16:32:20 GMT -5 minnesotapaintlady said:

Still 5 days from the official "estimate" day for the new variable rate, but it's looking like around 6%.

what shite.....

[minnesotapaintlady]

Oct 8, 2022 20:49:10 GMT -5 Rukh O'Rorke said:

Oct 8, 2022 16:32:20 GMT -5 minnesotapaintlady said:

Still 5 days from the official "estimate" day for the new variable rate, but it's looking like around 6%.

what shite.....

Well, came in a little higher.  Estimates are 6.47-6.50 range.