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I bonds

51,294 Views | 213 Replies | Last: 7 mo ago by Brian Earl Spilner
Brian Earl Spilner
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AG
6.48% for November?

https://www.cnbc.com/2022/10/14/series-i-bond-rate-expected-to-fall-to-roughly-6point48percent-in-november.html

Seems way low after the CPI data we just got.
hammerhead
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McGibblets said:

Well I really screwed this one up. While creating my account, I accidentally put a wrong digit in while putting in my banking info. Treasury direct will not allow you to add/edit/delete banking info unless you mail in a form that's been signed and stamped at a financial institution. Which turns into even more of a pain since I'm trying to do this through an Ally account. You'd think since the account isn't valid it would've been deleted and they'd let you add another, but that's not the case. Anyone have any ideas? I don't expect I could just make a new treasury direct account since it's linked to your social. I tried to call treasury direct and talk to them but it's a 2+hour wait. Additionally the recording mentioned it's currently taking about 15 weeks to process changes mailed in.
I put CR in my address instead of County Road and had do the same. Mailed in form, about 10 days later I get an email saying they got it and that it could take up to 13 weeks.

Received an email in less than two weeks indicating I was good to go.
hammerhead
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YouBet said:

fka ftc said:

Is the special stamp referred to a "medallion signature guarantee"? Though not common most branch office banks will have someone with this stamp. You trick is finding a bank who is comfortable verifying your identity, which goes more smoothly when you are an account holder.

You can google to find a bank branch near you or Ally may have a process and relationship to achieve this service.


Believe that's it. I had to call the local Fidelity brick and mortar store to confirm if they would do it since most of our money is with them. Guy did have to ask around because it's not too common a procedure I guess.
I just had mine notarized at the bank and they took it.

YouBet
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AG
hammerhead said:

YouBet said:

fka ftc said:

Is the special stamp referred to a "medallion signature guarantee"? Though not common most branch office banks will have someone with this stamp. You trick is finding a bank who is comfortable verifying your identity, which goes more smoothly when you are an account holder.

You can google to find a bank branch near you or Ally may have a process and relationship to achieve this service.


Believe that's it. I had to call the local Fidelity brick and mortar store to confirm if they would do it since most of our money is with them. Guy did have to ask around because it's not too common a procedure I guess.
I just had mine notarized at the bank and they took it.


So the Treasury broke their own process or your bank did the medallion signature guarantee?
hammerhead
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YouBet said:

hammerhead said:

YouBet said:

fka ftc said:

Is the special stamp referred to a "medallion signature guarantee"? Though not common most branch office banks will have someone with this stamp. You trick is finding a bank who is comfortable verifying your identity, which goes more smoothly when you are an account holder.

You can google to find a bank branch near you or Ally may have a process and relationship to achieve this service.


Believe that's it. I had to call the local Fidelity brick and mortar store to confirm if they would do it since most of our money is with them. Guy did have to ask around because it's not too common a procedure I guess.
I just had mine notarized at the bank and they took it.


So the Treasury broke their own process or your bank did the medallion signature guarantee?
I had my series 7 for over 20 years and I can assure you it was not a medallion signature guarantee...no one at the branch could do it.

I had already done one for my wife and was not going to try and hunt down someone to do it so I took a chance and sent it in.
YouBet
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AG
hammerhead said:

YouBet said:

hammerhead said:

YouBet said:

fka ftc said:

Is the special stamp referred to a "medallion signature guarantee"? Though not common most branch office banks will have someone with this stamp. You trick is finding a bank who is comfortable verifying your identity, which goes more smoothly when you are an account holder.

You can google to find a bank branch near you or Ally may have a process and relationship to achieve this service.


Believe that's it. I had to call the local Fidelity brick and mortar store to confirm if they would do it since most of our money is with them. Guy did have to ask around because it's not too common a procedure I guess.
I just had mine notarized at the bank and they took it.


So the Treasury broke their own process or your bank did the medallion signature guarantee?
I had my series 7 for over 20 years and I can assure you it was not a medallion signature guarantee...no one at the branch could do it.

I had already done one for my wife and was not going to try and hunt down someone to do it so I took a chance and sent it in.


Guess you got lucky then.
Ag CPA
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AG
If rates keep going up it may make more sense to just put your money in T-bills versus buying/rolling I-bonds.
Ag CPA
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AG
Reminder that tomorrow is the last day to buy at the current rate.
Jabin
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Ag CPA said:

Reminder that tomorrow is the last day to buy at the current rate.
Help me out here - isn't the rate reset for all bonds, even ones sold before the change? If correct, what difference does it make when you buy the bonds?
Throwout
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AG
If you buy them by tomorrow, you get the 9.62% interest rate for 6 months.

On a side note, the Treasury Direct website is down. Last I saw on there they said that due to the high volume, they can't promise to fulfill anymore purchases by the 28th.
Gig-Em2003
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AG
It's very slow, but I've been able to open an account this morning. Just got an order placed as well. Took almost 30 minutes vs about 5 when I did another one 30 days ago.
South Platte
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Gig-Em2003 said:

It's very slow, but I've been able to open an account this morning. Just got an order placed as well. Took almost 30 minutes vs about 5 when I did another one 30 days ago.
Same. Once I got past the initial "Next" button screen ~20 minutes, it moved slow but steady. I got one purchased for a minor account then tried to get another one and got sent to Error land. Starting over now.
South Platte
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Throwout said:

If you buy them by tomorrow, you get the 9.62% interest rate for 6 months.

On a side note, the Treasury Direct website is down. Last I saw on there they said that due to the high volume, they can't promise to fulfill anymore purchases by the 28th.
So I wonder if that is due to website issues or even if you are able to make a purchase on the 28th with a confirmation page, they still can't guarantee that it will be officially recorded as a purchase on the 28th.
Gig-Em2003
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AG
I think it's the website issues? Not sure. I did get a confirmation that a purchase of an I-Bond will occur on Monday the 31st.
Throwout
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AG
The weird part is the website says the 28th is the deadline for purchases that will get the 9.62% interest rate but that the new interest rate won't be announce until Nov 1. I don't know what they're going to do about purchases in between those two dates.
South Platte
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Well I'm in for 2 more. Finally. I'm pretty sure I just sent all of that money to some dude in Albania. Hope he's good for it.
Ag CPA
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AG
If so I hope you are at least getting a mail-order bride out of the deal.
Brian Earl Spilner
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With my savings APY up to 3.12% and I-Bonds falling to ~6% it's not quite the slam dunk it was before. I was planning on putting in another $10k in January but I think I'll just keep what I have in there.
kyledr04
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AG
Where are you getting the 3.12%?
Brian Earl Spilner
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AG
Lending Club
Win At Life
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AG
South Platte said:

Well I'm in for 2 more. Finally. I'm pretty sure I just sent all of that money to some dude in Albania. Hope he's good for it.
Good luck.

wanderer
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I bond rate resets to 6.89%, down from 9.62%.

Seems oddly low.
Ag CPA
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AG
And that's with a 40bp bump in the fixed rate portion.
cjsag94
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wanderer said:

I bond rate resets to 6.89%, down from 9.62%.

Seems oddly low.


It's based on semi annual change in inflation, not the annual year over year headline inflation number. I don't believe very many people understand how these actually correlate to CPI data and there will be many disappointed investors over the next 12 months (disappointed not necessarily regretful).

On another note, interesting take as some media outlets suggesting the 40 bps base rate makes the new rate better than the old. I'm assuming that's an assumption based on 5 full years holding these, but I'm assuming most people won't hold these once rates normalize.
BaylorSpineGuy
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Was talking to a friend about these tonight. CPI influences the variable component, but I've had a hard time understanding what influences/dictates the fixed rate? Any insights would be greatly appreciated.

Thanks.
Brian Earl Spilner
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AG
If it falls below 4% I'll probably hold it for three more months to clear the penalty window and sell.
billikenag
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The treasury doesn't disclose how it calculates the fixed rate for I-bonds, but most speculate that the fixed rate is based on the 10 year TIPS yield. Anecdotally this makes sense--I've been buying I-bonds for a decade and one thing I've noticed is that the I-bond fixed rate is set at 0 whenever the 10 year TIPS yield touches 0 (or negative) in the previous 6 month period.
A noble spirit embiggens the smallest man.
BaylorSpineGuy
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billikenag said:

The treasury doesn't disclose how it calculates the fixed rate for I-bonds, but most speculate that the fixed rate is based on the 10 year TIPS yield. Anecdotally this makes sense--I've been buying I-bonds for a decade and one thing I've noticed is that the I-bond fixed rate is set at 0 whenever the 10 year TIPS yield touches 0 (or negative) in the previous 6 month period.


Thanks for your insight!
cjsag94
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AG
With today's CPI update, the next I bond interest rate update is trending well below 2%. . Admittedly, this is largely useless analysis, but it's all we can go on unless you want to predict the next 4 monthly CPI numbers.

To get back to 6% rate (at 0 base rate), CPI would need to be just over 300 next March. After today's update, CPI is listed at 292.495. For reference, November 2021 was 273.042, March 2022 rose to 283.176, with March representing the 2nd highest YoY inflation number of the last 18 months. MoM changes have slowed dramatically (actually been negative 3 of the last 6 months).

Barring any unexpected significant inflationary pressures, I'm preparing for sub 2% renewal rates, so long term holders will benefit from increasing base rates.
topher06
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cjsag94 said:

With today's CPI update, the next I bond interest rate update is trending well below 2%. . Admittedly, this is largely useless analysis, but it's all we can go on unless you want to predict the next 4 monthly CPI numbers.

To get back to 6% rate (at 0 base rate), CPI would need to be just over 300 next March. After today's update, CPI is listed at 292.495. For reference, November 2021 was 273.042, March 2022 rose to 283.176, with March representing the 2nd highest YoY inflation number of the last 18 months. MoM changes have slowed dramatically (actually been negative 3 of the last 6 months).

Barring any unexpected significant inflationary pressures, I'm preparing for sub 2% renewal rates, so long term holders will benefit from increasing base rates.
Looks like I will be liquidating in July (1 year and 3 months after my April 2022 purchase).
TxAger
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As I sit on hold for 20+ minutes and counting w/ TreasuryDirect...

I had put some funds in TreasuryDirect a few months ago in the "gift box" to be gifted to my daughter. I transferred most of that gift box to her, leaving $2000 in the Gift Box.

Can I "cancel" the remaining $2000 and move it back to my account so I can purchase a Series I on Jan 1?

and again... their website SUX!!!
Throwout
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AG
So I bought some I bonds on June 1 and July 1 of 2022. I checked the account today and noticed that for those 2 months, I got an interest rate of 6.48% and not the stated 9.62% that was supposed to go in effect on May 1. Does anybody know why that would be? I got the 9.62% interest rate for purchases on August 1, September 1 and October 1. I'm assuming I need to call them but I was hoping to avoid that in case the experts on here know something I don't. Anybody have any thoughts? Thanks in advance for any help you guys have!
Brian Earl Spilner
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AG
You won't see the interest for your June purchase until September, because of the three month penalty for early withdrawal. You are just seeing interest for your previously existing bonds.
Brian Earl Spilner
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AG
Nvm.
South Platte
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Affirmative.

I don't think my October purchases got approved in time to get the higher rate. Both of them have 10,080 in them.
 
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