thanks for running those numbers. I am in that very boat.Brian Earl Spilner said:
Just updated my spreadsheet with the new inflation rate of 3.38%.
For anyone else that purchased $10k in April 2022 (I know there's a few of us), we can sell in January 2024 in order to maximize our APY before the newest rate starts bringing that down.
An initial $10k investment will be worth $11,208, with an APY of 6.90% and a total ROI of 12.08%.
Should you continue to hold for another 6 months, in July 2024, those numbers will be:
$11,401 (+192), APY - 6.22%, ROI - 14.01%.
Up to you if you think it's worth holding.
I bonds
51,499 Views |
213 Replies |
Last: 7 mo ago by Brian Earl Spilner
Just posting another article for learning:
https://www.wsj.com/articles/ibonds-rate-2023-may-october-2ddb13b1?st=4himgruxnk84wfd&reflink=desktopwebshare_permalink
https://www.wsj.com/articles/ibonds-rate-2023-may-october-2ddb13b1?st=4himgruxnk84wfd&reflink=desktopwebshare_permalink
Quote:
The new rate will apply to I bonds purchased for the next six months. Though it is less than half the 9.62% offered last year, when the inflation-adjusted savings became so popular that investors crashed Treasury's website, financial advisers say they may now be a better bet for the long term.
The fixed-rate component of the I bonds is rising to 0.9%, up from 0.4%, the highest since 2007.
Quote:
The higher fixed rate makes the newest I bond issue more appealing to long term investors, especially since the fixed rate has been at or near 0% for most of the past decade. The new rate applies to I bonds purchased from April 28 through the end of October.
Quote:
Someone who bought I bonds back at 9.62%, would earn an annualized rate equal to the inflation adjustment of 3.38%, over the next six months while someone who bought I bonds at the 6.89% rate would earn 3.78% due to the 0.4% fixed rate, Eric Pepper, a financial planner at Northbrook Financial said.
Quote:
An investor who put $10,000 in I bonds at the 9.62% rate would be better off paying the early withdrawal penalty if they could find a 12 month investment paying more than 5.5%, according to a calculation by Mr. Pepper.
Same number I got.
Withdrawing in January 2024, you miss out on $120, plus the additional $192 interest over the next six months. That gets you $312, which projects out to 5.5% APY.
Personally I think taking the penalty is an easy decision. The initial $120 hit (1% of your proceeds) can be pretty easily made up by a single good day trade, if you so choose.
Or, you could park it in a HYSA for 6 months (~4%), then buy back in with the 0.90% (or higher) fixed rate if you want to hold long-term.
Withdrawing in January 2024, you miss out on $120, plus the additional $192 interest over the next six months. That gets you $312, which projects out to 5.5% APY.
Personally I think taking the penalty is an easy decision. The initial $120 hit (1% of your proceeds) can be pretty easily made up by a single good day trade, if you so choose.
Or, you could park it in a HYSA for 6 months (~4%), then buy back in with the 0.90% (or higher) fixed rate if you want to hold long-term.
At the end of the day these bonds are not a large part of most or our investments but it was a fun exercise to go through last April, especially while the market was crashing and MM funds were probably paying 1-2%.
Considering throwing in $10k to get the 0.9% base rate, then cashing out my other $10k from April 2022 in January 2024. Can't really cash out the April 2022 now since it still has decent interest. Also, there is at least a chance inflation picks back up prior to January 2024 so it isn't 100% certain that the correct decision at that time will be to withdraw the funds (acknowledging that we will get a **** rate for 6 months).
Same Here!
Anyone buying IBonds today? Think if you buy on the last day of the month, you get the full month interest - may be wrong on that though.
Ignore that, looks like you get issued the next day, which would make the last day of a month the worst day to buy (should have bought on yesterday, I guess).
I am buying $10,000 of these to get the 0.9% fixed rate and then cashing out the ones I bought in April 2022 in early March 2024 since those will get crap interest.
Ignore that, looks like you get issued the next day, which would make the last day of a month the worst day to buy (should have bought on yesterday, I guess).
I am buying $10,000 of these to get the 0.9% fixed rate and then cashing out the ones I bought in April 2022 in early March 2024 since those will get crap interest.
I went ahead and cashed out the bonds I bought back in April 22 this week, probably should have waited another month or two to capture the higher interest rates I am forfeiting with the 3-month penalty but with 5% MM accounts to roll these into it's not a huge loss.
Was planning to hold till January, but now I'm thinking about selling on July 1. The market is in full on frenzy mode and I think it might be time to move it back in.
I thought you had to hold these for 15 months to get any return at all. Cashing out before then would forfeit the last 3 months, which would put you less than 12 months.
I'm thinking I will sell August 1, which will give me a full 12 months of interest. I still have 2 that I purchased in October 22.
You forfeit the last three months regardless. (Unless you hold for 5+ years.)
For me, I bought in April 2022, so July means I get the full 12 months, plus the 3 penalty months at the start of the purchase. (TD shows your total WITH the three month penalty already applied, at the start of the purchase.)
I've maximized my return at this point since this is the last month of the "good" rate. If you bought at any point in April, the same should be true for you.
For me, I bought in April 2022, so July means I get the full 12 months, plus the 3 penalty months at the start of the purchase. (TD shows your total WITH the three month penalty already applied, at the start of the purchase.)
I've maximized my return at this point since this is the last month of the "good" rate. If you bought at any point in April, the same should be true for you.
Ok yes, that makes sense. I purchased around April 25 or so, so 8/1 gives me a full 15 months, 12 of which were at the higher rate.
Well, redeemed mine. Nice $856 return on that $10k.
On to HYSA and DCA'ing into the S&P. Thanks Uncle Sam.
On to HYSA and DCA'ing into the S&P. Thanks Uncle Sam.
Depending on when you got in, you may want to look into cashing out (some) of your I-Bonds this month.
26 Week T-Bills are yielding ~5.5% and 52 Week T-Bills are yielding ~5.4%.
The Best 6-9 Month CD's are yielding ~5.75% and 12 Month CD's are yielding ~5.6%
Best article on when to cash out, based on when you bought in, to ensure you're forfeiting the new, lower rate of 3.38% vs. the old, higher rate of 6.48%:
https://keilfp.com/blogpodcast/when-to-cash-out-i-bonds/
Summary:
Keep in mind that you don't earn interest on your I Bonds until you complete the month, so cash out early in the month.
If it's near the end of the month, plan to cash out after the 1st of next month so you get the interest you've earned.
Best video how to cash out on TreasuryDirect's website:
https://www.treasurydirect.gov/indiv/tools-videos/redeem-electronic-bonds/
Disclaimer: Not a financial advisor. Consider your personal tax implications.
26 Week T-Bills are yielding ~5.5% and 52 Week T-Bills are yielding ~5.4%.
The Best 6-9 Month CD's are yielding ~5.75% and 12 Month CD's are yielding ~5.6%
Best article on when to cash out, based on when you bought in, to ensure you're forfeiting the new, lower rate of 3.38% vs. the old, higher rate of 6.48%:
https://keilfp.com/blogpodcast/when-to-cash-out-i-bonds/
Summary:
- Purchased in November 2021: consider cashing out August 2023 (NOW)
- Purchased in December 2021: consider cashing out September 2023
- Purchased in January 2022: consider cashing out October 2023
- Purchased in February 2022: consider cashing out November 2023
- Purchased in March 2022: consider cashing out December 2023
- Purchased in April 2022: consider cashing out January 2024
- Purchased in May 2022: consider cashing out August 2023
- Purchased in June 2022: consider cashing out September 2023
- Purchased in July 2022: consider cashing out October 2023
- Purchased in August 2022: consider cashing out November 2023
- Purchased in September 2022: consider cashing out December 2023
- Purchased in October 2022: consider cashing out January 2024
Keep in mind that you don't earn interest on your I Bonds until you complete the month, so cash out early in the month.
If it's near the end of the month, plan to cash out after the 1st of next month so you get the interest you've earned.
Best video how to cash out on TreasuryDirect's website:
https://www.treasurydirect.gov/indiv/tools-videos/redeem-electronic-bonds/
Disclaimer: Not a financial advisor. Consider your personal tax implications.
Bought April 2022, sold July 2023 (rather than January 2024) because HYSA rates are so good. Dumped $9k into my HYSA, $1k into S&P, and DCA'ing another $1k a month to the S&P from here till December.
And because I'm such a freak about my finances, I have a spreadsheet tracking how much more or less I've made by doing this than keeping the I-Bonds.
I'm down $16 (vs I-Bonds) as of 8/2 due to the downturn the last few days. But, I think it'll work out in the end.
And because I'm such a freak about my finances, I have a spreadsheet tracking how much more or less I've made by doing this than keeping the I-Bonds.
I'm down $16 (vs I-Bonds) as of 8/2 due to the downturn the last few days. But, I think it'll work out in the end.
At least you can admit you have a problem
Thanks for payout chart. I have a bond issued in Nov 21 and one in Jan 22. Both are showing the 3.36% current interest rate so wondering if your chart should be updated to selling now at least through Jan 22?
But you also have to account for the 3 month penalty. If it was simply money sitting in a 3.36% account and you can take it out and move it to Wealthfront with 5%, the decision would be a lot easier.YouBet said:
Thanks for payout chart. I have a bond issued in Nov 21 and one in Jan 22. Both are showing the 3.36% current interest rate so wondering if your chart should be updated to selling now at least through Jan 22?
I have the same, Nov 21 and Jan 22 purchases...YouBet said:
Thanks for payout chart. I have a bond issued in Nov 21 and one in Jan 22. Both are showing the 3.36% current interest rate so wondering if your chart should be updated to selling now at least through Jan 22?
The Nov 21 I just sold, this past week.
The Jan 22, I'll sell in first week of October (coming up).
Confusing; but it's all based on when the schedule of your 6 month rate started and when your 3 month penalty ends.
The chart is correct, I've double and triple-checked it.
I will be cashing in my April 2022 bonds in January 2024 most likely, maybe December 2023 when I have a better picture of my tax situation. Bought $5000 in June 2023 (I think, maybe May) for the 0.9% fixed, debating buying another $5,000 but hoping for some prediction on the fixed portion expected after the November reset. Think inflation isn't dead and fuel prices are about to start it back up.
Hell, may not even end up cashing the April 2022 bonds even though that's absolutely the best decision to make in the short term.
Hell, may not even end up cashing the April 2022 bonds even though that's absolutely the best decision to make in the short term.
I think this thread has covered a lot of this but still useful:
https://www.cnbc.com/2023/08/11/this-is-the-best-time-to-redeem-series-i-bonds-according-to-experts.html
https://www.cnbc.com/2023/08/11/this-is-the-best-time-to-redeem-series-i-bonds-according-to-experts.html
What are you guys doing with your i-bonds now?
Still holding. I'll cash one out in early November and the other two early February.Fenrir said:
What are you guys doing with your i-bonds now?
I can't wait to be done with the Treasury Direct website forever. I'm locked out of my account and can't get money out. Need to call during their inconvenient office hours while I'm at work. They changed how to input the password and now its somehow case sensitive when it wasn't before. So annoying.
Cashing out tomorrow, holding in HYSA at 4.55% until January. Will fund my Roth in January with $6500, the rest will remain in my HYSA.
Today's the day to cashout if you bought in Jan of 2022; like many did.
T-Bills are at 5.5%. Credit Human has a 6%, 12-17 month CD option right now.
These are much better, similar zero-risk options to the current I-Bond rate.
T-Bills are at 5.5%. Credit Human has a 6%, 12-17 month CD option right now.
These are much better, similar zero-risk options to the current I-Bond rate.
So I've got one I-Bond with an issue date of 4/1/22 and two with an issue date of 10/1/22. I should cash all of these out in early January 2024, correct? And I only lose the October 2023-December 2023 interest?
Oct '22 purchaser here. It's gone in January!
Thanks for the info!
Thanks for the info!
Being in TexAgs jail changes a man……..no, not really
Happy Pull-out of TreasuryDirect Day!
Diggity said:
Happy Pull-out of TreasuryDirect Day!
Ok, showing my ignorance on this, but why pulling out now?
lots of folks on this thread bought iBonds back in April of '22.
Some wizards on the thread calculated that the best return rate would be achieved by pulling out in January, based on the current rates that are in effect.
If you look up on this page, there's a breakdown based on when you bought.
Some wizards on the thread calculated that the best return rate would be achieved by pulling out in January, based on the current rates that are in effect.
If you look up on this page, there's a breakdown based on when you bought.
Sold!
Being in TexAgs jail changes a man……..no, not really
Enzomatic said:Diggity said:
Happy Pull-out of TreasuryDirect Day!
Ok, showing my ignorance on this, but why pulling out now?
I want returns...not 18 year liabilities.
Time to bump this.
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