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Eric
Eric (@guest_1659660)
July 25, 2023 10:17

I’m planning on redeeming my 1st I Bond on 8.1.23, after the interest posts. After I redeem it, am I immediately able to transfer the funds to my linked bank account?

Erik
Erik (@guest_1631892)
June 9, 2023 18:42

iBonds kept < 5 years; If I redeem the bond in July (e.g. July 1) do I loose interest for April-June or May-July?

p.s. I think that I got incorrect info from TreasuryDirect rep who stated May-July.

Clint
Clint (@guest_1632364)
June 10, 2023 17:22

The earliest day in July you can redeem will be Monday, July 3rd.

you’ll lose interest for Apr/May/June, (plus 2-3 days in July). Technically, the bond won’t earn any July interest until August 1st.

Erik
Erik (@guest_1632903)
June 11, 2023 23:04

Clint ,
Thanks. That is what I thought. I got the wrong info from Treasury Support (in an E-mail)…

Frey
Frey (@guest_1633094)
June 12, 2023 10:02

What you see as your balance is what you’ll get, the balance reflects the three month penalty.

What did TD tell you in the email? I actually thought it was May/June/July.

Vic
Vic (@guest_1609495)
May 1, 2023 14:57

I would like to know if I should pull my money out now that is has been in there for 1 year? Thanks.

Terry
Terry (@guest_1609501)
May 1, 2023 15:08

Wait until it has been there for 1 year and 3 months. If you withdraw the money now, you will lose 3 months of interest @ 6.48%. if you wait 3 more months, you will lose 3 months of interest @ 3.38%.

vic
vic (@guest_1613369)
May 6, 2023 14:05

Thank you

Vic
Vic (@guest_1613370)
May 6, 2023 14:05

Thank you

gli
gli (@guest_1607893)
April 28, 2023 13:26

new fixed rate for May1st – 6 months is 0.9% Nice increase in the fixed rate as the variable rate falls. Might be worth monitoring to see what the variable rate will be come this Fall.

Alan Smithee
Alan Smithee (@guest_1608167)
April 28, 2023 20:35
gli
gli (@guest_1595998)
April 12, 2023 08:59

There we go – so May rate for Ibonds will be 3.38% + Fixed rate of ? That means that if you want to get in – you want to purchase in April so that you get the current rate of 6.48% for 6 months + Fixed rate of 0.4%. And then 3.38% + 0.4%

Useful reading: https://tipswatch.com/2023/04/12/march-inflation-report-sets-i-bonds-new-variable-rate-at-3-38/

jd
jd (@guest_1596091)
April 12, 2023 11:06

So, buying this month and redeeming next april will net $443 or 4.43% APY. For those inclined, purchasing the last possible day (4/27) and redeeming on 4/1/24 will goose the rate up to ~4.76%. To compare with CD rates, divide these ibond APYs by (1 – your state tax rate%)

FLY317
FLY317 (@guest_1590636)
April 3, 2023 10:03

Assume next rate is 3.5%. 6.48% half year+3.5% half year, still worth to buy?

Sunshine
Sunshine (@guest_1590640)
April 3, 2023 10:12

i suck at math.. is it worth to buy? FLY317

FLY317
FLY317 (@guest_1590742)
April 3, 2023 12:27

(6.48%+3.5%)/2 =4.99%APY? lol

Sunshine
Sunshine (@guest_1590751)
April 3, 2023 12:35

🙂 thank you!

it seems about the same as many bank accounts and CDs now.. potentially lower than some CDs at 6%.. I guess that answers the question.. it’s probably not worth it for most people on here to put 10k into an Ibond for 2023.

ixo
ixo (@guest_1590771)
April 3, 2023 13:07

One cannot really make that determination for ‘most people’. It’s a very individual choice. Federal tax free interest income at higher than the current CD rates is a no brainer for a lot of folks.

sg77
sg77 (@guest_1590787)
April 3, 2023 13:35

State tax exempt, not federal tax.

arihalli
arihalli (@guest_1590980)
April 3, 2023 19:11

Hi, where do you see CD’s at 6%?? thanks

Sunshine
Sunshine (@guest_1591099)
April 3, 2023 22:53

arihalli the one in particular I was thinking of is the 11 month 6% CD offered by SecurityPlus bank.. but it looks like they pulled that offer publicly. There are many other options right now for CDs that pay 5%+ like brokered CDs at Charles Schwab, etc.

arihalli
arihalli (@guest_1591103)
April 3, 2023 22:57

Thanks, i am wall to wall with 5% CD’s offered at Fidelity. But i haven’t seen any FDIC insured 6% CD’s.

HarryTheFirstHarry
HarryTheFirstHarry (@guest_1596020)
April 12, 2023 09:36

To put it another way, if you had 10K to invest before the end of April 2023 and your state tax rate is 7%, then you would need to find a CD that earns approximately 5.35% or better to beat the I-bond rate. However this also does not take into account the 3 month penalty that would cut into the I-bond earnings if you were taking money out at the end of the 12 month period and eat $95 of the earnings which would mean you only need to find a 1 year CD that earns approximately 4.35 or more to beat the I-bond rate.
However yet another caveat is that the fixed rate of 0.4% for the I-bond MAY turn out to be its trump card if you can hold the the funds for longer and CD rates fall after a year. However this point is very speculative with lots of ifs and could go either way.

arihalli
arihalli (@guest_1596028)
April 12, 2023 09:45

Harry, just a question. Isn’t one faced with the same state tax, whether or not they purchase the CD or IBond? thanks

jd
jd (@guest_1596076)
April 12, 2023 10:50

income from US govt obligations are exempt from state taxes, so ibonds, treasuries, treasury MMFs, etc aren’t subject to state tax

jd
jd (@guest_1590797)
April 3, 2023 13:54

if you buy now and redeem in a year, you’d get 6.9% for 6 months (you forgot .4% fixed rate), 3.9% for 3 months assuming 3.5% variable rate, and 0% for 3 months, total return ~4.45% APY

Sunshine
Sunshine (@guest_1591097)
April 3, 2023 22:51
  jd

super! thank you jduck I think it’s worth it to go for a CD paying at least 5% now even if you need to pay the taxes.. and just forget about Ibonds for 2023

Sunshine
Sunshine (@guest_1591098)
April 3, 2023 22:51

sorry I meant jd

Gadget - Bank Bonus Geek 🔗
Gadget - Bank Bonus Geek 🔗 (@guest_1588779)
March 30, 2023 21:40

For those that want a simple answer to the “best” earliest date to sell your I-Bonds….

https://tipswatch.com/2023/03/29/want-to-exit-your-i-bond-investment-youd-better-have-a-plan/

I assume this person is credible. I got pulled in mid-April 2022 for the sensational 9% rate headline.

I know the i-bonds posts are spread over multiple pages – maybe  Chuck wants to do a “sell” post vs buy?

gli
gli (@guest_1576969)
March 14, 2023 14:34

For I Bonds. February is the fifth month of a six-month string that will determine the I Bond’s new inflation-adjusted variable rate. Through the five months, inflation has run at 1.36%, which would translate to a variable rate of 2.72%. One month remains, so it looks like the new variable rate should fall into a range of about 3.2% to 3.5%, down substantially from the current 6.48%. The I Bond’s fixed rate will also be reset May 1, but the outlook for that reset is high uncertain, given the volatility of real yields over the last week. – Source TIpswatch.

Eric
Eric (@guest_1577146)
March 14, 2023 19:30

I saw somewhere else that the latest figures for CPI came to around 6%. Why is the rate that you mentioned less than half of that?

storm
storm (@guest_1577154)
March 14, 2023 20:05

6% is the year-over-year rate of inflation. The I Bond rate is determined by the monthly rate of inflation for each month from October to March and then multiplied by 2 (annualized).

Sunshine
Sunshine (@guest_1577250)
March 15, 2023 00:48

so from May, 2023 onward.. the rate should be at least 6%?

Snowbird
Snowbird (@guest_1579610)
March 18, 2023 09:30

Probably not. Using the month over month numbers, since October, inflation has been 1.36% which would translate to a 2.72% rate. There’s still one month to go, so I suspect it will be less than 4%. See my explanation of the calculation here. https://www.doctorofcredit.com/u-s-treasury-i-bonds-faq-when-to-buy-10000-i-bonds-6-48-9-62-and-more/#comment-1576753

Eric
Eric (@guest_1579829)
March 18, 2023 18:47

So that implies that inflation is slowing down a lot. Why is the Fed still expected to raise interest rates a lot more?

arihalli
arihalli (@guest_1579832)
March 18, 2023 18:58

We don’t know if they will raise interest rates a lot more. They may only raise them a quarter, or, pause (because of the banking problems). They can either tackle the banking problem or the inflation problem. I think they are ill-equipped to do either anyways.

Cheryl
Cheryl (@guest_1579855)
March 18, 2023 19:46

arihalli will there be anarchy next in the economy or a depression? What do you think will happen this year and next year?

arihalli
arihalli (@guest_1579856)
March 18, 2023 19:49

Cheryl, they will do what they always do, they’ll print money to solve the problem. JMO

Cheryl
Cheryl (@guest_1579882)
March 18, 2023 20:52

arihalli won’t that make inflation even worse?

arihalli
arihalli (@guest_1579890)
March 18, 2023 21:11

YUP, but thats how they solve monetary problems.

Eric
Eric (@guest_1580446)
March 19, 2023 20:50

I should have been more clear. I meant before the banks failed recently there was talk that the Fed would raise rates over 6%. I am asking why was that the case if the inflation rate has slowed down.

storm
storm (@guest_1580468)
March 19, 2023 21:31

In theory, the central bank has to raise interest rates to equal or greater than the rate of inflation to control inflation. Inflation is already trending down, so there is some debate whether interest rates need to be raised any more. Further hikes could trigger higher unemployment and a recession.

favo
favo (@guest_1563771)
February 25, 2023 08:46

How are taxes reported on I-bond? I purchased some I-bond last year, but haven’t received 1099 INT yet, not sure whether it was lost in the mailing process or whether it wasn’t issued…

Ryan Goldstein
Ryan Goldstein (@guest_1564088)
February 25, 2023 22:53

I bond interest is tax-deferred until redeemed (up to 30 years, the bond duration).

Penny
Penny (@guest_1564229)
February 26, 2023 09:12

You won’t get a form till you redeem them.

However, you can pay taxes each year on them (report them manually and keep track) or defer to when you redeem the bond. All info can be found here https://www.treasurydirect.gov/savings-bonds/tax-information-ee-i-bonds/

mangorunner
mangorunner (@guest_1564270)
February 26, 2023 10:35

Lots more info on paying interest annually here, too:

I-Bonds Tax Treatment – Optional: Report Interest Every Year
https://thefinancebuff.com/i-bonds-taxes-simple-default.html#htoc-optional-report-interest-every-year

Similar to Doctor of Credit, there is much value in the Comments, too.
favo Penny

favo
favo (@guest_1570503)
March 7, 2023 01:41

Ryan Goldstein Penny mangorunner Thanks so much guys! Really appreciate it!

J2
J2 (@guest_1577276)
March 15, 2023 02:00

Don’t do it. Defeats one of the main advantages to i bonds.

gli
gli (@guest_1556149)
February 14, 2023 09:16

January inflation came in pretty hot at 0.8 so back up to a 1.6% interest rate + any fixed rate with two months of reporting left to go. https://tipswatch.com/tracking-inflation-and-i-bonds/

Sunshine
Sunshine (@guest_1556158)
February 14, 2023 09:25

i don’t know how it’s calculated.. so based on that what will be the next projected rate if you were to guess? gli

gli
gli (@guest_1556280)
February 14, 2023 12:16

Unknown two month’s inflation results. right now it is 1.6% + a potential fixed rate of ? We shall know in April after that CPI hits. Could be anywhere from 1.5% to 4%

gli
gli (@guest_1556303)
February 14, 2023 12:39

I’ll post this comment from Marc because it is as good as any: “If we extrapolate the next two months at the same 0.8%, that would put the May 1 annualized inflation rate for I Bonds at 4.8% (2.4%x2). That probably the high end of the range.

– If it’s half that at 0.4% each, it would be 3.2% (1.6%x2).

– if it’s one quarter of that, it would be 2.4% (1.2%x2).

Using the middle of those three scenarios, the one year annualized rate for buying an I Bond before May 1 would be 5.045% ((6.89%+3.2%)/2).”

mangorunner
mangorunner (@guest_1556330)
February 14, 2023 13:26

Sunshine, Keep an eye on David Enna’s column. He is the best-of-the-best, when it comes to I-bonds:
https://tipswatch.com/