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Posted: 4/12/2022 3:35:55 PM EDT
new I-bond 6 month rate starting May 1st 2022 will be 9.62%

buy now before May and get 6 Months at the current 7.1 % then 6 months at 9.62% for an annual yield of 8.36%

glad i bought last year and I am buying the max this year




Link Posted: 4/12/2022 5:18:32 PM EDT
[#1]
damn
Link Posted: 4/12/2022 9:56:31 PM EDT
[#2]
Care to explain for us non-investing gurus?
Link Posted: 4/12/2022 10:36:07 PM EDT
[#3]
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Quoted:
Care to explain for us non-investing gurus?
View Quote


I bonds are 30 year bonds bought directly from the .gov. They adjust for inflation every 6 months. Sometimes they also have a base interest rate added to the inflation rate that lasts for the life of the bond. You can buy up to $10k per person a year in I bonds and another $5k through your tax return.

Basically they are bonds that are supposed to track inflation. They have restriction on redemption so not for everyone.

Link Posted: 4/12/2022 11:36:46 PM EDT
[#4]
I should consider getting some more of these. I just ordered some from my tax return, but I only got $500 cuz I'm a Poor.
Link Posted: 4/13/2022 12:09:40 AM EDT
[#5]
Discussion ForumsJump to Quoted PostQuote History
Quoted:


I bonds are 30 year bonds bought directly from the .gov. They adjust for inflation every 6 months. Sometimes they also have a base interest rate added to the inflation rate that lasts for the life of the bond. You can buy up to $10k per person a year in I bonds and another $5k through your tax return.

Basically they are bonds that are supposed to track inflation. They have restriction on redemption so not for everyone.

View Quote


They're a form of Savings Bond.   As Joe says the max per person is 10k / year so you can max out and your wife can.  If you have a trust the trust can buy ibonds.  

Set up accounts for each person/trust buying the iBonds at the Treasurydirect web site.  Use the section for individuals.  Follow the link for "how to buy series I"  

https://treasurydirect.gov/

This site has to have one of the worst human interfaces ever.


Your money is locked up for 12 months.  After that you can redeem if needed but:

   If you cash an I bond before it is five years old, you will lose the last three months of interest.
   I bonds earn interest for 30 years if you don't cash the bonds before they mature.
   If you've been affected by a disaster, special provisions may apply.
Link Posted: 4/13/2022 12:12:05 AM EDT
[#6]
If you have NFA Trusts, can they each buy these bonds?
Link Posted: 4/13/2022 9:45:51 AM EDT
[#7]
Quoted:
new I-bond 6 month rate starting May 1st 2022 will be 9.62%

buy now before May and get 6 Months at the current 7.1 % then 6 months at 9.62% for an annual yield of 8.36%
View Quote

Is that really how it works?  I thought the rate would be the current 7.1% thru April, then May 1 would start 9.62%, then unknown starting Nov 1.

If so I'm moving some of my emergency fund, stupid savings account is only paying .35%.
Link Posted: 4/13/2022 10:32:32 AM EDT
[#8]
Discussion ForumsJump to Quoted PostQuote History
Quoted:

Is that really how it works?  I thought the rate would be the current 7.1% thru April, then May 1 would start 9.62%, then unknown starting Nov 1.

If so I'm moving some of my emergency fund, stupid savings account is only paying .35%.
View Quote


You are correct. There are two rates: one is a permanent rate for the life of the bond, and the second is the inflation adjusted rate that is reset on all bonds every 6 months. The permanent rate has been around zero for quite a long time so people only talk about the inflation adjusted rate that resets every 6 months.

If you wait until may to buy the bonds you will get the inflation adjusted rates of 9.62% until Nov.
Link Posted: 4/13/2022 11:41:26 AM EDT
[#9]
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Quoted:
If you have NFA Trusts, can they each buy these bonds?
View Quote


Good question.  I've never created one and never seen the paperwork for one so don't know, possibly a question for a trust attorney.  

I was thinking of the type of trust created to hold assets and control the distribution of same after your death.    

So they may be very similar.  

One question would be how does the income flow if and when you cash out the iBond and need to report the interest income if you were to use trust set up to own an NFA item.
Link Posted: 4/13/2022 6:05:51 PM EDT
[#10]
Discussion ForumsJump to Quoted PostQuote History
Quoted:

Is that really how it works?  I thought the rate would be the current 7.1% thru April, then May 1 would start 9.62%, then unknown starting Nov 1.

If so I'm moving some of my emergency fund, stupid savings account is only paying .35%.
View Quote


i read your question a little different then the other response

the 6 month rate is set at the rate from when you buy not for certain dates.  The rate is set every 6 months but it does not change your rate until you have run your 6 months from purchase date.

if you buy in April 1st 15th or 28th, your 6 month locked in rate is for that month. so you earn 6 months (april, may, june, july, august, September) at the 7.1 % rate

THEN in October you would get 6 months (october 2022, november 2022, december 2022, january 2023, february 2023 March 2023)  of the then current rate of 9.67% on your money as well as the interest earned the 1st six months

if you wait until may 1st then you earn 6 months at the 9.67% rate, the second 6 months rate would then start in November and is unknown at this time.  so buying now before May you have a guaranteed 6 months at the current rate 7.11% and then 6 months at the new rate 9.62 %

you are eligible to cash out after 12 months but will incur a 3 month of interest penalty if you cash out before 5 years, just keep that in mind if you want the full years earning plan to hold it 3 extra months so 15 moths instead of 12

google I-bonds there are a ton of article about it
Link Posted: 4/13/2022 7:14:51 PM EDT
[#11]
Discussion ForumsJump to Quoted PostQuote History
Quoted:
i read your question a little different then the other response

the 6 month rate is set at the rate from when you buy not for certain dates.  The rate is set every 6 months but it does not change your rate until you have run your 6 months from purchase date.

if you buy in April 1st 15th or 28th, your 6 month locked in rate is for that month. so you earn 6 months (april, may, june, july, august, September) at the 7.1 % rate

THEN in October you would get 6 months (october 2022, november 2022, december 2022, january 2023, february 2023 March 2023)  of the then current rate of 9.67% on your money as well as the interest earned the 1st six months

if you wait until may 1st then you earn 6 months at the 9.67% rate, the second 6 months rate would then start in November and is unknown at this time.  so buying now before May you have a guaranteed 6 months at the current rate 7.11% and then 6 months at the new rate 9.62 %

you are eligible to cash out after 12 months but will incur a 3 month of interest penalty if you cash out before 5 years, just keep that in mind if you want the full years earning plan to hold it 3 extra months so 15 moths instead of 12

google I-bonds there are a ton of article about it
View Quote

That's what I was looking for.  Wow.  So, this is a safe 8% return just for not touching your money for a year (and a bit).
Link Posted: 4/14/2022 5:13:19 PM EDT
[#12]
I bought a couple in the fall as part of my car and house savings buckets
I also have a couple from years ago when they actually had the fixed rate above 0
Link Posted: 4/14/2022 11:36:54 PM EDT
[#13]
I purchased my max in November and again in January.  No brainer for emergency fund money.

Interested to see where the rates will be next January...
Link Posted: 4/18/2022 12:56:22 PM EDT
[#14]
This has all the info you need to open an account and how they work

https://tipswatch.com/2022/04/13/ready-to-invest-in-i-bonds-for-the-first-time-my-advice-act-quickly/
Link Posted: 4/18/2022 1:20:25 PM EDT
[#15]
tag
Link Posted: 4/18/2022 1:59:51 PM EDT
[#16]
Quoted:
new I-bond 6 month rate starting May 1st 2022 will be 9.62%

buy now before May and get 6 Months at the current 7.1 % then 6 months at 9.62% for an annual yield of 8.36%

glad i bought last year and I am buying the max this year




View Quote


Best anti-inflation setup you can get right now...glad we did this too...
Link Posted: 4/18/2022 2:07:31 PM EDT
[#17]
Discussion ForumsJump to Quoted PostQuote History
Quoted:

https://treasurydirect.gov/

This site has to have one of the worst human interfaces ever.
View Quote
If it refuses your application on the site, it doesn't tell you why.  Mine was refused, and I haven't jumped through the hoops to fix it, so no bonds for me.
Link Posted: 4/19/2022 1:25:51 PM EDT
[#18]
Dumb question...

I know ZERO about these bonds, but I have an inheritance coming in the next month or so that I need to park somewhere while we wait on the housing market to calm down. Total inheritance is in the $50-60k range, so this could be a nice vehicle to earn some decent interest in the short term.

If I buy after 5/1, what effect would that have on the annual return? I'm assuming I'd still get 6 months at the 9.62% but then ??? after that?
Link Posted: 4/19/2022 2:39:05 PM EDT
[#19]
Discussion ForumsJump to Quoted PostQuote History
Quoted:
Dumb question...

I know ZERO about these bonds, but I have an inheritance coming in the next month or so that I need to park somewhere while we wait on the housing market to calm down. Total inheritance is in the $50-60k range, so this could be a nice vehicle to earn some decent interest in the short term.

If I buy after 5/1, what effect would that have on the annual return? I'm assuming I'd still get 6 months at the 9.62% but then ??? after that?
View Quote
After that it would depend on the inflation rate for the 6 months after May 1
Link Posted: 4/19/2022 2:41:58 PM EDT
[#20]
Discussion ForumsJump to Quoted PostQuote History
Quoted:
If I buy after 5/1, what effect would that have on the annual return? I'm assuming I'd still get 6 months at the 9.62% but then ??? after that?
View Quote

Bingo.  No one knows what the new rate will be in November but I'm not betting against inflation right now.

Also invested funds are tied up for 12 months and if you cash in the bond before five years are up you lose the prior quarter's interest.

Considering that my savings account is paying .35% right now this doesn't seem like a bad deal.
Link Posted: 4/19/2022 2:44:24 PM EDT
[#21]
I bought $10k today.  I wish I knew about these sooner.
Link Posted: 4/19/2022 2:52:05 PM EDT
[#22]
Worst case scenario you get 8.36 for the first year, and the rate goes to shit.
You get 0.00 the next 3 months due to penalty for early withdrawal, for a 15 month gain of 8.36%, immune to state income tax...

My main credit union does not limit the penalty for early withdrawal on CDs, so it's very easy to find yourself getting a 1099-INT for $100, less penalty of $200.
Link Posted: 4/19/2022 3:00:52 PM EDT
[#23]
Discussion ForumsJump to Quoted PostQuote History
Quoted:

Bingo.  No one knows what the new rate will be in November but I'm not betting against inflation right now.

Also invested funds are tied up for 12 months and if you cash in the bond before five years are up you lose the prior quarter's interest.

Considering that my savings account is paying .35% right now this doesn't seem like a bad deal.
View Quote



Got it. That's what I assumed. Hoping my funds clear before 5/1. If not, I may just roll the dice anyways since my other options aren't great.
Link Posted: 4/19/2022 3:45:51 PM EDT
[#24]
Discussion ForumsJump to Quoted PostQuote History
Quoted:



Got it. That's what I assumed. Hoping my funds clear before 5/1. If not, I may just roll the dice anyways since my other options aren't great.
View Quote

IBond rates when inflation was low still beat bank CDs, and I doubt they will have inflation back to normal anytime soon.
Link Posted: 4/19/2022 4:25:04 PM EDT
[#25]
Thank you for the heads up!
Link Posted: 4/21/2022 8:24:36 PM EDT
[#26]
Too bad you can't buy more than $10K/year.  


Highest rate for a CD at any local bank is 1.15%.
Link Posted: 4/21/2022 8:52:30 PM EDT
[#27]
Discussion ForumsJump to Quoted PostQuote History
Quoted:
This has all the info you need to open an account and how they work

https://tipswatch.com/2022/04/13/ready-to-invest-in-i-bonds-for-the-first-time-my-advice-act-quickly/
View Quote
Thank You!  Put a little bit of spare cash in.
Link Posted: 4/21/2022 9:31:28 PM EDT
[#28]
Remember, though, the base rate is zero. The 9.whatever rate is all the inflation term.

Does this mean don't do it?  Not at all. But the yield can drop, theoretically at least, to zero.
Link Posted: 4/21/2022 9:38:17 PM EDT
[#29]
Discussion ForumsJump to Quoted PostQuote History
Quoted:
Remember, though, the base rate is zero. The 9.whatever rate is all the inflation term.

Does this mean don't do it?  Not at all. But the yield can drop, theoretically at least, to zero.
View Quote


You can easily look at the historical rates on the website.  It's a no brainer.
Link Posted: 4/21/2022 9:51:47 PM EDT
[#30]
Discussion ForumsJump to Quoted PostQuote History
Quoted:
Remember, though, the base rate is zero. The 9.whatever rate is all the inflation term.

Does this mean don't do it?  Not at all. But the yield can drop, theoretically at least, to zero.
View Quote
The current rate on most regular savings accounts is damn near zero.  Seems like a no brainer to me for $$ you won't need for at least a year.

I only put in the portion of my emergency fund that exceeded my 6 month needs, and was sitting in an account making nothing.  I probably should have done more but I'm not an ARF millionaire and tend to tread semi-lightly.

Link Posted: 4/22/2022 7:53:28 AM EDT
[#31]
Discussion ForumsJump to Quoted PostQuote History
Quoted:
Remember, though, the base rate is zero. The 9.whatever rate is all the inflation term.

Does this mean don't do it?  Not at all. But the yield can drop, theoretically at least, to zero.
View Quote

In a deflationary environment getting 0% isn't terrible. It's better than getting 9.6% now since the 9.6% isn't really earning anything. It's just keeping up with the price increases and tax will eventually be due on the 9.6%. If new IBonds start paying a higher fixed rate you can always sell and buy the new ones, if you are past the hold time. The only downside would be tax on the interest and possibly losing 3 months interest.
Link Posted: 4/22/2022 9:11:34 AM EDT
[#32]
Discussion ForumsJump to Quoted PostQuote History
Quoted:
The current rate on most regular savings accounts is damn near zero.  Seems like a no brainer to me for $$ you won't need for at least a year.

I only put in the portion of my emergency fund that exceeded my 6 month needs, and was sitting in an account making nothing.  I probably should have done more but I'm not an ARF millionaire and tend to tread semi-lightly.
View Quote

This is exactly what I did.  It's not perfect but inflation is killing me with my emergency fund in a savings account paying .35%.
Link Posted: 4/22/2022 2:08:41 PM EDT
[#33]
Seems like an investment that is guaranteed never to beat inflation by design.

Maybe a good place to park cash that you don't want to put at risk but doesn't sound like a great investment whatsoever.

I wouldn't get too excited about this unless you had a very specific purpose like emergency funds or savings for a house down payment a few years out.  If you are just yield chasing, it sounds dumb.
Link Posted: 4/22/2022 7:34:12 PM EDT
[#34]
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Quoted:

This is exactly what I did.  It's not perfect but inflation is killing me with my emergency fund in a savings account paying .35%.
View Quote View All Quotes
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Discussion ForumsJump to Quoted PostQuote History
Quoted:
Quoted:
The current rate on most regular savings accounts is damn near zero.  Seems like a no brainer to me for $$ you won't need for at least a year.

I only put in the portion of my emergency fund that exceeded my 6 month needs, and was sitting in an account making nothing.  I probably should have done more but I'm not an ARF millionaire and tend to tread semi-lightly.

This is exactly what I did.  It's not perfect but inflation is killing me with my emergency fund in a savings account paying .35%.

I did similar. This will be a much better option long term for at least a portion of my emergency fund. I should've done it much sooner.
Link Posted: 4/22/2022 7:56:33 PM EDT
[#35]
Thx
Link Posted: 4/22/2022 8:11:02 PM EDT
[#36]
Discussion ForumsJump to Quoted PostQuote History
Quoted:
Seems like an investment that is guaranteed never to beat inflation by design.

Maybe a good place to park cash that you don't want to put at risk but doesn't sound like a great investment whatsoever.

I wouldn't get too excited about this unless you had a very specific purpose like emergency funds or savings for a house down payment a few years out.  If you are just yield chasing, it sounds dumb.
View Quote


Obviously you're not going to get rich buying I-Bonds, particularly given the $10k annual cap. 8.53% instead of currently 0.5% in a "high yield" savings account (though of course that will hopefully go up, I doubt it will approach the 8.53% for the same 1 year time frame) for my short term cash sounds a lot better. There are also some nifty tax benefits, like being able to time when you redeem them and avoiding state income taxes where applicable.
Link Posted: 4/22/2022 9:00:09 PM EDT
[#37]
Thanks

I was gonna put 10k into this.. wife was against it...sort of.

Now she's gonna dump 10k into it too.
Link Posted: 4/22/2022 9:20:30 PM EDT
[#38]
Yep first 10k in Dec and another in Jan for my wife. My application required some paperwork Form 5444 I think because I input the name on my bank account wrong. Might bother to finish getting that form in now.
Link Posted: 4/22/2022 9:42:30 PM EDT
[#39]
Discussion ForumsJump to Quoted PostQuote History
Quoted:
Obviously you're not going to get rich buying I-Bonds, particularly given the $10k annual cap. 8.53% instead of currently 0.5% in a "high yield" savings account (though of course that will hopefully go up, I doubt it will approach the 8.53% for the same 1 year time frame) for my short term cash sounds a lot better. There are also some nifty tax benefits, like being able to time when you redeem them and avoiding state income taxes where applicable.
View Quote

Savings account interest rates are tied to the fed rates so they should be increasing, abeit slowly as the fed raises rates.  At some point the CPI will also come down, making the I bond less attractive as a place to park cash.  For the next 12 months they're looking damned good though.

Link Posted: 4/23/2022 12:29:46 PM EDT
[#40]
This seems intriguing.

Can I sell at any time and get out my principal? Or is it locked up for good minimum of a year once I buy?
Link Posted: 4/23/2022 12:42:14 PM EDT
[#41]
Discussion ForumsJump to Quoted PostQuote History
Quoted:
This seems intriguing.

Can I sell at any time and get out my principal? Or is it locked up for good minimum of a year once I buy?
View Quote

Locked for a year which is why I only moved a portion of my emergency fund over.  I might move some more over in six months, will have to see what the savings account interest rates versus the CPI are doing.

Also if you sell before five years you lose the prior quarter's interest.
Link Posted: 4/24/2022 3:32:53 PM EDT
[#42]
Discussion ForumsJump to Quoted PostQuote History
Quoted:

Locked for a year which is why I only moved a portion of my emergency fund over.  I might move some more over in six months, will have to see what the savings account interest rates versus the CPI are doing.

Also if you sell before five years you lose the prior quarter's interest.
View Quote
Earlier in the year I was thinking about moving some of my emergency money into a CD ladder, so in __X__ time, I'd have something maturing every 30 or 90 or so days.

Today I'm thinking more like you - at least in the near term, a much better return on these. Now, how do I attach that other blasted bank account to convert that idle money...
Link Posted: 4/24/2022 5:17:53 PM EDT
[#43]
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Quoted:
I bought $10k today.  I wish I knew about these sooner.
View Quote


For those of you wishing you had known earlier, the prior rate was 3.56 and 1.7 before that. About the only reason the iBonds are getting this much attention is inflation. If not for skyrocketing inflation they would still be 0.X to 1.X. Personally, with the good possibility of the market going sour at least for the near term, this is the perfect place to park at least 10k.
Link Posted: 4/24/2022 5:32:09 PM EDT
[#44]
Discussion ForumsJump to Quoted PostQuote History
Quoted:


For those of you wishing you had known earlier, the prior rate was 3.56 and 1.7 before that. About the only reason the iBonds are getting this much attention is inflation. If not for skyrocketing inflation they would still be 0.X to 1.X. Personally, with the good possibility of the market going sour at least for the near term, this is the perfect place to park at least 10k.
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Quoted:
Quoted:
I bought $10k today.  I wish I knew about these sooner.


For those of you wishing you had known earlier, the prior rate was 3.56 and 1.7 before that. About the only reason the iBonds are getting this much attention is inflation. If not for skyrocketing inflation they would still be 0.X to 1.X. Personally, with the good possibility of the market going sour at least for the near term, this is the perfect place to park at least 10k.


I'd like to do more than 20k, but I'm not all that comfortable having other people opening up accounts for me.
Link Posted: 4/25/2022 3:05:10 PM EDT
[#45]
Thanks for the reminder and I finally set up an account.
Link Posted: 4/25/2022 4:55:54 PM EDT
[#46]
One of the attractive features of the I-bond is the ability to defer claiming the interest on your taxes until you cash in the bond.  This could be up to 30 years in the future.  This can be a very powerful benefit for those HNW individuals who expect to be in a lower tax bracket in retirement.  I recently learned about these bonds and have set up accounts for me and my spouse.  We are now officially creditors of the citizens of this great USA.

Wishing you all good luck in your journey.  

Link Posted: 4/28/2022 4:44:41 PM EDT
[#47]
How long does it take for the funds to transfer from your bank so the Purchase can be approved?
Link Posted: 4/28/2022 6:15:26 PM EDT
[#48]
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Quoted:
How long does it take for the funds to transfer from your bank so the Purchase can be approved?
View Quote

Next business day.  I set up a buy order on Friday 04/22 and the funds were pulled from my checking account on Mon 04/25.
Link Posted: 4/29/2022 12:59:33 PM EDT
[#49]
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Quoted:

Next business day.  I set up a buy order on Friday 04/22 and the funds were pulled from my checking account on Mon 04/25.
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Discussion ForumsJump to Quoted PostQuote History
Quoted:
Quoted:
How long does it take for the funds to transfer from your bank so the Purchase can be approved?

Next business day.  I set up a buy order on Friday 04/22 and the funds were pulled from my checking account on Mon 04/25.


@Bubbles

Thank You! Much appreciated!
Link Posted: 5/1/2022 5:45:07 AM EDT
[#50]
Too late for those wanting the previous rate locked in for 6 months, but FYI there is a loophole to the $10,000 / yr.

If there is a decent rate that will last at least a year (and then add three months so you don't lose the three months at a decent rate), you can always gift ibonds to someone else, such as your wife.  The gifts stay in your account earning the current rates, just as if they were purchased for you, and won't count towards the receiver of the gift's yearly purchase limit of $10,000 until they are gifted.  So next year or even the year after that person wouldn't have to purchase their $10,000 and you would send the gift ibonds that have been sitting in your account,  If you wanted you could buy $20,000 ,etc.. in ibonds and gift $10,000 for your wife and $10,000 for a kid for next year, yet the interest would be the current rates now.
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