I Bonds

This page is for discussion of I Bonds which are issued by the U.S. treasury.

I Bonds have a ‘fixed rate’ portion and an additional portion which is adjusted twice per year at a rate dependent upon the rate of inflation.

The current interest rate on the bonds is 7.12% through 4/30/2022 after which they will adjust for the next 6 months. It is estimated that the new interest rate will be in the 9.5% area.

You can buy these bonds on the Treasury Direct site — here. All the details are on this page and there are penalties for early withdrawal so make sure you check out the details.

You may purchase up to $10,000 annually – a couple can have 2 accounts and buy $20,000 total.

150 thoughts on “I Bonds”

  1. Recent SA article saying that there is a good chance the new I-bond rate falls to 6% after 10/31/22, from current rate of 9.62%.

    The geniuses at the Fed seem to be the only ones out there who still haven’t realized that inflation has peaked.

    From the article:

    “Additionally, since the last I bond inflation rate adjustment, the CPI has only gained 3.01%. We will know what the inflation rate component for November will be when the September CPI data is released but there is a significant probability that September MoM inflation will be at or near 0.0%. This means that the I bond composite rate could fall from 9.62% to 6% for new issuance after October 31.”


    1. The Treasury sets iBond rate as I read.
      As you say, THAT means that there is some implicit indication that inflation has been whacked down? Pffshaw!
      Those Wizards (including The Balancer: Fiscal Congress of ALL Parties for 40 years) just have NOT been reliable for . Destroy demand or temporary consumption. Who is going to go out and invest in creating more supply in the face of lower demand? It’s a tail-chase, not reliable.
      There are OTHER reasons which I will not try to look behind the curtain and expose. Hint: Ghost of the Cold War, Global Dollar demand, Power and Elections at the Top.
      A computer could do it neutrally and better based on an instantaneous VAT tax, like Visa/Big Bank technology.
      IMHO. I know this is not an opinion page, but that is the Soup de Jour, eat it!

    1. Azure, you will love this. So I read about a guy with a new IBond front loading scheme. Going to have 50k put in his 104 year old ailing great grandmothers account gift box. Planning on her dying soon so he can have it all at once bypassing the annual limit.

          1. Alpha, you are right my friend. I only wish the Treasury would let us buy more then $10K per SS# each year. The future for a hyper-inflationary environment looks like it will go on for sometime. Stay Tuned, Azure

    2. would love to see a 7 handle but the way the economy is slowing, it might be another low total inflation number with the core staying higher for longer
      but even at 6 percent combined with the 9 percent you’re getting right now works out pretty well
      going to wait till the number comes out before i buy anymore for my gift box

  2. I ck’d my I Bond Treas Direct acct- opened it on 4/1/22. Looks like they recently paid some interest, but not enough. It should be at 7.12% annual.
    I’m assuming the payment was for 3 months = 1/4 of a year, even tho they pay the same rate for 6 mo after purchase, so I guess this qtr will be the same, and after that I’ll start on the current 9.62%
    I think I should have gotten $10,000 x .0712 and divide by 4 ( 3mo.) = $178
    The amount paid was $60. WTF? Also- I checked just a couple weeks ago, and there was no payment- seems like they took their time to do it.
    Ideas? — thanks

    1. They don’t credit you for the 3 months interest due to the penalty, until you’ve held for 5 years to avoid that. So the first 3 months you earn nothing, and then the next 3 months you’ll see the first 3 months, etc. And at 5 years, you’ll see a “bonus”.

      1. Xerty-
        But- they made a payment for a 3 mo period- small about 1/3, but something.

      2. Not true because the interest penalty is the latest 3 months and not the first 3 months. After 9 months you’ve earned the rate on the issue in effect at the time of purchase (currently 9.62%). If you cash in at 9 months your penalty is the interest you would have earned in months 7-9.

        1. Right, it should be the last 3 months. If you are a brand new spankin’ owner, the first 3 months are the last 3 months, which gives the false impression it is the first 3 months. :-).

          1. I wasn’t precise / clear enough in my early comment.

            “Not true because the interest penalty is the latest 3 months and not the first 3 months. After 9 months you’ve earned the rate on the issue in effect at the time of purchase (currently 9.62%). If you cash in at 9 months your penalty is the interest you would have earned in months 7-9.”

            yes, that’s true in terms of what you’re earning, but not what they’re showing on the Treasury Direct site. For the site, you are shown what you’d get if you sold today, which means you lose the last 3 months. Which, if you just bought the bond, means you see yourself earning nothing for the first 3 months.

        2. I should add that this was a hypothetical example. In reality you have a 1 yr min holding period on I Bonds so there is no possibility to cash in at 9 mo. I should have used 1 yr in my example.

    2. This video showed me exactly how to calculate earning on I-Bonds:

      I used it to create the spreadsheet table shown below which is spot on for my purchases made last Dec and April of this year. You might need to separate the column headings, but the most important column is the right-most which is the realized earnings. It matches the $60 you received.

      Account Value Annualized Rate Monthly Interest Earned Cumulative Interest Earned Hypothetical Earned on $25 principal Realized Account Value

      4/1/2022 7.12% $60.00 $60.00 $0.15 $10,000
      5/1/2022 7.12% $56.00 $116.00 $0.29 $10,000
      6/1/2022 7.12% $60.00 $176.00 $0.44 $10,000
      7/1/2022 7.12% $60.00 $236.00 $0.59 $10,000
      8/1/2022 7.12% $60.00 $296.00 $0.74 $10,060
      9/1/2022 7.12% $60.00 $356.00 $0.89 $10,116
      10/1/2022 9.62% $80.00 $80.00 $0.20 $10,176
      11/1/2022 9.62% $84.00 $164.00 $0.41 $10,236
      12/1/2022 9.62% $84.00 $248.00 $0.62 $10,296
      1/1/2023 9.62% $80.00 $328.00 $0.82 $10,356
      2/1/2023 9.62% $84.00 $412.00 $1.03 $10,436
      3/1/2023 9.62% $88.00 $500.00 $1.25 $10,520
      4/1/2023 $0.00 $0.00 $10,604.00

      1. Bruce-
        Thanks- not sure why some months with 31 days – like May, earn less than others (June is more).

    3. Gary for a bit more color, $60 looks right by my math. Treasury has accrued you 4 months (April, May, June, July). But it has withheld May, June, and July as Xerty explained. So all you have received is April’s interest. September 1 you will be credited May’s interest.

      1. Grid & Bruce-
        That makes sense, but I thought I would just get the 2d qtr half of the year- so somehow, they are doing monthly. Confusing since the say it’s semi-annual.
        Oh well- trust Uncle Sam….
        Now – just have to ferret-out how to avoid paying the tax on the 1099s they send until I or my sons redeem them. Looks like I have to report it, not pay it- perhaps by listing as tax-free each year (?)

        1. Gary, In years past, I didnt pay tax until I redeemed them a few years later. They should be tax deferred until you redeem unless you specifically designate to pay the interest yearly.

          1. Grid-
            My point was – I looked at the IRS pub- it’s not clear on how to skip paying when you get a 1099 every year – they tend to want to collect on those.
            I’ll figure it out.

            1. Gary, if you have always deferred its not a problem. If you start paying yep it is…No 1099 is sent to IRS until cashed.
              Note: You (or the child if a bond is in the child’s name) do not actually receive the interest every year even if you report it that way. The interest that the bond earns is reported on a 1099-INT after the bond is cashed or is reissued to reflect a taxable change in ownership. The 1099-INT will show all the interest the bond has earned over the years. Go to IRS Publication 550, Investment Income and Expenses, for instructions on how to tell the IRS that you already reported some or all of that interest in earlier years.

              Reporting the interest all at once at the end
              Most people defer reporting the interest, putting it off until they are filing a federal income tax return for the year in which they receive what the bond is worth including the interest.
              When electronic I Bonds in a TreasuryDirect account stop earning interest, they are automatically cashed and the interest earned is reported to the IRS.
              You can see the interest on your IRS Form 1099-INT.
              If a financial institution pays the bond, you will receive a paper 1099-INT from that financial institution either soon after you cash your bonds or within the first two months after the end of the year in which you cash your bonds.
              If you cash electronic bonds in your TreasuryDirect account, your 1099-INT will be available early the next year in your account. (Video)

              However….If you pay once….
              Once you start to report the interest every year (for example, for a child in the child’s Social Security Number), you must continue to do so every year after that for all your savings bonds (or, for example, the child’s bonds) and any you acquire (or, the child acquires) in the future.
              Our online Savings Bond Calculator can also help you determine the year-to-date earnings for the calendar year.

              1. Grid- thanks again
                This was my first buy for my adult sons, so no history of tax payment–and won’t be doing so. Looks like it will be their ‘problem’ unless I sell when/if rates start going too far south.
                Jan ’23 is not too far off- will have to see what the rate will be then.

                1. Gary, I will have to wait longer to decide on some of my money as I locked in last year on 3.56% cycle and havent even got to 9.6% cycle yet. So even with next two CPI’s at zero, I am guaranteed basically over a 6.5% return for 24 months with that 20k anyways. At that point I will have to decide also. Im assuming by then better opportunites will be elsewhere, one never knows. But that is a next years problem!

    4. Don’t worry about trying to reconcile the TD account value. They update the Redemption Tables in early May and early November, with the redemption values of all bonds eligible for redemption in the next 6 months, and their values. Yours will be listed in the November tables with a value for the first time in April 2023. Then you can track them from month to month, if you must.

    5. $ 10,000 on Feb 14.2022. Got a payment of $ 176 well before the
      6 month mark and nothing since. Also, was puzzled. and, you can not
      withdraw interest.

  3. I just can’t do it. I revisited the entire idea and watched a couple of ABC , paint by the numbers videos again. The amount deposited is at a fixed rate for 30 years and the other part a variable that is good for six months and added to principal amount, OK…..in the current environment the Treasury has set the base rate at ZERO? and added to principal at the guaranteed rate plus HOPE and HONESTY?
    I get the short term CD replacement thing, maybe build up to a years working capital idea to ride out a real debacle? Redeem after 12 months, okay., that’s a flip, not an investment. The gamble is that inflation keeps ripping for a long time. The guarantee of PAYMENT is good, but the base, fixed rate is NOT even at the thirty year bond rate…I MIGHT consider THAT + the inflation reset. That would be honest AND based on real markets.
    Seems five year adjustables are honest, but with a lesser guarantee . It’s an instrument that the market has some sway on setting: the 5 year govt rachet rate; which has proven that it moved up; plus the premium spread. Resets have and are producing increase of gross income for the next five years at a rate on 13-20%. They ARE performing their function.
    The argument and role of Capitalist Corporations that are IG is to be able to increase prices, support their debt, survive the ups and downs and perform over very long terms. Same store sales are not more people buying more goods, it’s the inflationary markups and settlement within the reality of the real world of capitalism and time.
    I had an old time banker tell me when I was a kid trying to get mortgages on rental houses back in the late 80’s (which still demanded 20% down), “…if guys like you and your brother go down in some big trainwreck , we’re all fked anyway .”
    The only real advantage is the guarantee of worthless paper delivery by the Treasury if Armageddon hits

    1. The fixed rate is adjusted every May 1 and Nov 1. I think they should have notched it up last May, but am waiting to see what they do in November. With people buying them hand over fist and creating “gift accounts” and trust accounts out the wazoo, it’s doubtful that they’d increase the fixed rate in response to customer demand. I hope that won’t play a role in the decision.

      As long as the fixed rate is zero, I try to remind people that, even though the variable rate seems high, if you put one dollar in now, you’ll get one dollar back (in purchasing power) in 5 years. Redeem sooner and you lose money. And CPI-U underestimates the real inflation we’re all feeling. I put a little cash in, but not a lot; far less than the amount of cash I’d hold if inflation wasn’t so high.

      1. Bruce, Im assuming zilch and thus wont be surprised, ha. Fixed component has been nil or close to it for well over a decade. They never have disclosed methodology, if there even is. So I havent extended myself out much especially with CDs and short duration notes rising. Wells Fargo (along with other banks) has recently been issuing A rated short duration notes that are step ups and callable each year starting today for example at 4.10% with step up to 5.75% on the 4th year if not redeemed. Other banks have similar terms so I have been adding some there.

  4. This is a two part question: Somewhere along the line I apparently screwed up the info on my wife’s account and, therefore, I seem unable to complete a transaction for her to gift me an IBond for delivery next year….. In attempting to correct the problem which I believe is bank info generated, the site tells me I have to submit Form FS 5512 E.

    1. How am I supposed to do that when I have an online bank only? It requires signatures from a Certifying Bank Officer signed in his presence. There’s no way to get that done. There’s nobody who even knows me at my online bank.

    2. The implication is that to redeem an IBond, I would have to use this same form… Is that the only way to redeem? Has anyone actually tried to redeem their IBonds? Naturally, it’s not something I want to do now, but if this is what I’m faced with in the future when the day comes to redeem, then I’m done trying to jump thru the necessary hoops to gift IBonds. This also adds to fears of what my heirs might face trying to redeem these some day when I’m not around.

    1. I fumble fingered the bank account number when I set up my account and had a similar problem getting it corrected.

      What I did was e-mail them and ask them if they had a solution compliant with the American with Disabilities Act for correcting this and they allowed me to make a one time change online.

      You could try telling them your situation and asking for an exception since online banking is so common now, and they may likewise allow you to make a change. But they have to comply with the ADA so that is the big gun were you to experience something which kept you housebound.

      Also, I had something else interesting happen. I posted on here early this year that my daughter managed to make two $10k deposits this year into her account when she screwed up the gifting process. Well, they finally caught it and sent the money back, but they sent it back with interest earned. I assume it did not include the first quarter interest but I have not calculated it. So you can be half a year or more down the line before they catch some of these things if you had something similar happen and thought you were out of the woods.

      1. Also, I forgot to add, that you should always be able to redeem by having the funds transferred directly to your bank. It just becomes a problem if you want it to be paid out a different way — at least that is what I remember.

    2. I have no idea how to get a medallion signature from an online bank.

      I have redeemed I-bonds in the past on treasury direct. Amounts were electronically deposited into my bank account.

      1. Same here Private, including linked paper Ibonds, no problem withdrawing. I have heard from others that they got trapped in that Medallion signing thing.

  5. Based on todays CPI-U release, the rate reset on November 1, 2022 would be 6.10% APR if there is no further change for the next two months (Aug and Sep). CPI-U actually went down from 296.311 to 296.276 from June to July 2022.

    1. There was zero increase from June but the CPI was 8.5%. Isn’t that the figure used in the reset calculation?

      1. The 8.5% is a 12 month number, so based on difference from 12 month prior. The index # actually dropped for July.

        IBond is based on 6 month view. March index was 287.504. July ended at 296.276. Difference is 8.772 or 3.05% (double that for the 12 month rate). If inflation index remains unchanged it will be 6.10 rate reset. It could be that the index continues to drop and IBond rate will then be lower.

  6. I finally got I-bonds purchased for my wife me. We took a short vacation to the mountains to cool off while the bank had a hold on the money transferred from another bank. What did I do but manage to lock my account while signing on! I screwed up on the security questions. My advice is be very diligent on remembering exactly which security questions you answer and the answer. When you call the number given you will get a message your wait is 2 hours! I hung up and called at 8:00 AM the next day and got the same message. I put the phone on speaker while eating breakfast and got someone after 22 minutes. I will say I got a well spoken person who gave excellent assistance. Once I got back in successfully it took only a few seconds to purchase the bonds. What a time consuming experience this was for investing $20,000! That Treasury Direct website can be a real beast to deal with. I think if we want to purchase more next year it will go quickly though since it is all set up, assuming I can log in OK.

    1. DJ, If you are planning on buying them next year, then buy them right now by gifting each other 10k. Get the 9.62% right now instead of a lower yield on the dough.

  7. Rate explanation


    OK this looks bad but the last two numbers on furtherest to right are Half 1 and Half 2 back to 2012.

    No great deal VS preferreds. And seeing the number can go to zero I suppose the escape valve is one can get out just giving up on the first 90 days. So if they tank again you just bail.

    Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec HALF1 HALF2
    2012 2.3 2.2 2.3 2.3 2.3 2.2 2.1 1.9 2.0 2.0 1.9 1.9 2.2 2.0
    2013 1.9 2.0 1.9 1.7 1.7 1.6 1.7 1.8 1.7 1.7 1.7 1.7 1.8 1.7
    2014 1.6 1.6 1.7 1.8 2.0 1.9 1.9 1.7 1.7 1.8 1.7 1.6 1.8 1.7
    2015 1.6 1.7 1.8 1.8 1.7 1.8 1.8 1.8 1.9 1.9 2.0 2.1 1.7 1.9
    2016 2.2 2.3 2.2 2.1 2.2 2.2 2.2 2.3 2.2 2.1 2.1 2.2 2.2 2.2
    2017 2.3 2.2 2.0 1.9 1.7 1.7 1.7 1.7 1.7 1.8 1.7 1.8 2.0 1.7
    2018 1.8 1.8 2.1 2.1 2.2 2.3 2.4 2.2 2.2 2.1 2.2 2.2 2.1 2.2
    2019 2.2 2.1 2.0 2.1 2.0 2.1 2.2 2.4 2.4 2.3 2.3 2.3 2.1 2.3
    2020 2.3 2.4 2.1 1.4 1.2 1.2 1.6 1.7 1.7 1.6 1.6 1.6 1.8 1.6
    2021 1.4 1.3 1.6 3.0 3.8 4.5 4.3 4.0 4.0 4.6 4.9 5.5 2.6 4.5
    2022 6.0 6.4 6.5 6.2 6.0 5.9 6.2

    1. “No great deal VS preferreds. And seeing the number can go to zero I suppose the escape valve is one can get out just giving up on the first 90 days.”

      Small correction, its the LAST 90 days you give up if you sell before 5 years. If rates go way back down you

      Also, the way they reset rates is rather confusing. I have 10k I bought in Oct 2021 thats still earing 7.12%. At some point I still have 9.62% guaranteed for 6 months. On 5k I bought in Jan of 2022 I’m already earing 9.62%.


      Before selling you’d want to check and see what your earning because there is a lag between what your getting and what the new rate is. For something with no default or interest rate risk, I think they’re a damn good investment actually. Also, you can defer federal taxes which is useful if you use cash them after retirement, or as an emergency fund if you lose your job and are in a lower tax rate. Also free from any state income taxes.

  8. dj – It (the Treasury Direct account) does grow on you after a couple of stumbling attempts. Been there, done that.

    1. Well HankLA, my next task on it will be to actually purchase the bonds. Wife had the cash in another bank from the one I used (per her instructions by the way) in the website for the Treasury department to get the funds from. The receiving bank put a seven business day hold on the funds when she handed them the bank check from the bank 100 yards from them. Love it the way the banks don’t trust each other. You can’t change the bank data in Treasury Direct on the website once you set up the account. You must fill out a paper form, take it to an authorized bank official to witness your signature, mail it to the treasury department, and then wait for who knows how long. Moral of this when you set up your account make very sure the bank you intend to use is the one. I will have spent more time on this little transaction when I finally get it done……

  9. Lord! I just established my Treasury Direct Account to buy some I-bonds and that website is one antiquated thing to set up your account and then use it it! Locked myself out a couple of times getting through the process. Think I have it now. That virtual keyboard for entering your password I have never seen before……… Guess it grows on you after using it a couple of times.

    1. Their survey always shows only 3% of users don’t like the site.

      I bet it does not even take stats and clicking the survey does nothing.

      1. Guilty here. I mindlessly click the ‘fine by me’ option on that survey. This is largely because I forget the annoyance of their mouse click typewriter by the time I’m done with the web session. Next time I’ll try to remember to ding them for it. {Look! a squirrel!}

    2. Had the same experience on Tuesday. I was trying to open another account in my trust and I would get all the info put in and then it would kick me out and I had to start over. So now between my wife and myself I have 4 accounts to deal with, oh joy.

  10. After last CPI-U, the next i-bond yield (in November) will be:
    6.13% if inflation goes to 0% in the next 3 months (unlikely)
    >12% if inflation continues at the current levels.
    It seems a good guess , even if inflation starts to be controlled, oil prices, etc. that the next rate will be at least 10%.

    So buying i-bonds before Nov. will likely yield the first year well >10% (6 months @ the current 9.62% and another 6 months at the next rate).

    1. I ‘m still getting the 7% or so on my April purchases. I’ll see the 9.64% come Oct. and the Nov. reset would take me to Oct 2023

    2. I agree that Nov 2022 Ibond will yield over 10%. In fact, I am predicting that there will be a fixed interest component since Fed funds rate is now 2.5%.

      I have been doing Ibonds since 2001 and happy to see so much enthusiasm for them albeit inflation is at 1979/1980 levels.

      1. USC CPA, I am curious to know why you think the fixed rate component will make a comeback. Since it’s been gone for nearly 15 years now. What incentive do they have to reinstate it?

        1. Speaking of IBonds, do you have to fund your account first before being able to purchase? I’ve been thinking about jumping on the buy the gift now for next year’s allotment bandwagon for myself and my wife but don’t remember whether or not the process has to begin with funding or can be initiated and then funded…. not a big deal – I’ll probably just fund them first anyway but was wondering..

          1. I just told them where to take the money from and the next business day, they took it. I have done this year’s personal for me and spouse, both the gifts for next year, done the trust and the LLC for this year, too, so unless someone can tell me what I’ve missed, I’m good. Not gonna fund gifts beyond next year. We’re just too damn old. 😉

              1. I already had the trust and the LLC, but I think you can easily set them up just to buy the bonds.

        2. Hi Larry
          Great question. It is pure speculation on my part.
          All I know is my Ibonds purchased in Nov 2000 have fixed rate of 3.4%.
          I do not recall fed raising interest rates by over 2% in less than 6 months back then.

          Hey it is just a hunch on my part.

          Sorry to offend you with my speculation.

          1. Offense? No, not at all. I still have I-bonds from with fixed rate of 3%. But the fixed rate has been under 1% since May 2008, usually zero.

    1. If inflation is 0% next 3 months the following cycle from this current 9.6% cycle would be 6.13%.

      1. what would happen if oil dropped or crashed
        and we had a negative cpi( not the core rate)
        unlikely but when doing the math do we factor in a negative number cpi??

        must be a bit board today thinking of this possibility



        1. That can easily happen and frequently in past has. I would suspect based on oils recent drop off along with commodity sagging, next months wont be gangbusters. I would bet heavily on the 12% under. My no nothing opinion is the pig is working its way through the python. At some point the security of locking in a CD may be better than the Ibonds.

          1. “The pig is working its way thru the python……..” Good one! Never heard that before…. I’m gonna file it away for future use… ha

            1. You lived on the islands before. No wild hogs and pythons out there, lol…
              This is my favorite which you probably know. It has no bearing here but file this away too if you ever need it.
              The difference between involvement and commitment is like ham and eggs. The chicken is involved; the pig is committed.

        2. Robert: My understanding is that i-bonds can not go net negative.

          Given that as of today one can expect about a 10% return in i-bonds in the next year, I question again:

          How many gifted $10k i-bonds (in addition to those already bot and held) I have appetite to hold? Each gifted i-bond will be deliverable at a rate of 1 per year, so if you hold 3 gifts (that’s how many I have now), you can deliver them in 2023, 2024 and 2025, assuming you don’t purchase any more.

          Thus, a bond deliverable in 2.5 years will yield at least 4% (10%=4%*2.5).
          Obviously, that is assuming i-bonds go to 0% after the next year.
          If you assume inflation will be say 2%, then your 2025 bond will give you a 5.2% return. Not bad, for a secure, tax deferred, state tax free investment.

          Even if you go for 3.5 years, the worst you can get for your 2026 i-bond is 2.86% return, but if you assume that after the first year, inflation will be at least 2%, you will be receiving an annualized 4.29%.
          4.5 years gives 3.78%, etc.

          Higher inflation, then obviously, your returns will be higher.

          So, if you want to hold cash (or cash equivalents), how many gifts you want
          to purchase now? Should I buy more gifts?

      2. Grid, Right, but most likely it won’t be 0% nor close to 0%, so I think the next cycle will probably be around of 10% (if not 11 or 12). So i-bonds bot today will enjoy 6 months of today’s 9.62% and another 6 months of a similar rate.

        Sounds nice, but this only reflects how bad the inflation situation is, as we have commented weeks ago. Buying i-bonds you are only conserving your capital. To get richer you need a higher than inflation return, and it is hard to think today of a more than 10% return which is not crazy risky. So net, without crazy risks, we will all be becoming poorer 🙁

        1. DD, I started by maxing out last year on the 3.56% cycle, so that money hasnt even reached the 9.6% cycle yet. And I gifted to where I cant buy next year, but that is as far as I will go. Risk/reward doesnt seem as rewarding gifting too far out as CDs (1 yr Govt debt and under) are considerably higher now than they were last year. So for me, I wont risk what could happen after that. It looks like one last shot is available for a decent 1 year if one hasnt. But one really should have been starting to accumulate at 3.56%, or certainly by the 7.12% cycle.
          I bought these about ten years ago on opposite situation. CDs were collapsing and heading lower while Inflation was 3% range. Once they headed south too, I sold out. This time though CDs are in an up cycle and hopefully will continue the upward trend for that income purchasing segment. It at least provides another option for that income subsegment.

  11. I have set this up with a couple of family members and they are having problems with their password and logging in to verify the transaction. Nothing but difficulty communicating with the Treasury Department. Quite the run around with no return email.

    Has any body else had problems accessing their account?

    1. I logged in to our treasury accounts today to check. No issues.

      Treasury Direct’s design is kind of odd and can mess people up because it is unusual. It didn’t occur to me because I have been using it for decades and back when I started, lots of sites had weird constructs. Over the hears, most sites have migrated to more “normalized” designs, but treasury, being the government, has zero incentive to evolve so it just sticks with its quirky design. A couple of recent events made me take a step back and see that its quirkiness can confuse people.

      -I was helping someone get set up and she couldn’t get logged in after repeated attempts. Turned out the “virtual keyboard” design treasury uses for their login page was messing her up. It wasn’t like anything she had used before, and it confused her (she forgot that the “submit” button was way down the page and not visible without scrolling down, and that pressing “enter” doesn’t work).

      -I talked with one of my programmers who is irritated with the design because he uses a password manager (which I highly recommend, btw) and treasury isn’t compatible with password managers – so he has to go find his password every time he logs in. He said he makes errors sometimes trying to type it in with a mouse and no way to reveal what you are typing, so he sometimes has to try several times.

      1. I have the same problem using a password manager. However, if you pay close attention during the process of typing in each complex number, letter, capitalized or not, and possibly symbol you painstakingly created thru the generator to have an ultra secure, randomly generated password, you will note that momentarily you can see what you typed before it quickly disappears behind an asterisk… That saved me more than once from the aggravation of having to type in my password over and over again via their virtual keyboard until getting it right.

    2. Payday–I have had an account for years but can’t seem to get in–wrong password. You have to call – after a week of calling I gave up as all I got was message to call back later. Think I have some bonds in there for the grandkids–but honestly I don’t remember.

  12. My wife and I are thinking about purchasing some ibonds through Treasury Direct. If I understand it we each will need to set up individual accounts to purchase 10k each. We can’t do this through one account. Am I correct?

    1. that is exactly correct.
      But setting up accounts is very easy.
      Besides, you can thus also gift each other another 10k (or more) to deliver in subsequent years, if you have the cash now and like the current (and next) rates.

      1. Thanks DD and Steve M! Right now we have 20K that we can use in a money market account, so I will set up two accounts and go that route. Thanks again!

    2. I am pretty sure you are correct. That is exactly what I did. I already had an account in my name from previous purchases on Treasury Direct. I created an account for my wife (with her SSN) to purchase the $10K in her name last CY and again this CY. It doesn’t take all that long to create accounts. You just need to supply SSN and a couple of other pieces of personal data.

    3. alternatively, if you only want one account today, you can purchase 10k for yourself and buy 10k (or more) to your wife which you will hold in your account as a gift until you want it delivered (at which time you would have to set an acct for her).

  13. A couple of IBond minutiae questions. I’m going to have to explain IBonds to my Property Owners Association this week so wanted to be sure I’m 100% accurate.
    1. As of today, there are 2 months of data (not 1) already available for the next calculation of the IBond rate that goes into effect in November, correct? I believe the June number will be announced on July 13 and that will be the third month of data available for guestimating the November change.
    2. The measured inflation rate portion of the IBond is for the NON-SEASONALLY adjusted Consumer Price Index for All Urban Consumers, right? I seem to remember discussion here about the effects of seasonal adjustments to the number but treasurydirect says, “We set the inflation rate every six months (on the first business day of May and on the first business day of November), based on changes in the non-seasonally adjusted Consumer Price Index for all Urban Consumers (CPI-U) for all items, including food and energy.” The seasonally adjusted number always seems to be the one that gets the most attention, but IBonds are based on the non-seasonal number, right?

  14. I have one son entering college in August, (go Oklahoma State!), and bought I-bonds in 2002, so they are earning 11.3%. Our income now exceeds the cutoff to use them for college tax free. Are there any ways to still utilize that? Any tricks o’ the trade so to speak? Clearly that’s a great rate, but would love to know since more than 50% of the value is interest income. I’m W-2 so can’t manipulate my income.

    1. How close is your income to the cutoff level? I assume it goes by AGI. With W-2 income it is tough to manage but if you are close to the limit, max out your retirement contributions to lower your AGI. You mentioned W-2 earnings so assuming you have a 401k plan, you can contribute $20,500 (or if you are over 50 $27,000)

      If you are far from the limit, you likely won’t be able to do anything

  15. What about reporting gift tax?

    My sister and I each bought 10k i bonds for ourselves
    I like the idea that we also each buy 20k i bonds for each other as gifts, set to distribute in year 2 and 3…

    …but how does the gift tax reporting work? Do we have to file 709 and when? That is my hesitation. If anyone knows appreciate it!

    1. Sand, I cant help you with the Form, but as an alternate idea to consider, just gift each other $16k this year, and you dont have to file any form. This is what I did, as I dont like forms.

    2. Not sure if this makes any difference, but the gift is accounted for in the year the bonds are received. So if I understand correctly that you mean to distribute 10k in year 2 and 10k in year 3, is there still an issue?

      1. You understood correctly. The thing tripping me up is reading https://thefinancebuff.com/buy-i-bonds-as-gift.html where it talks about “future interest” gift reporting, as well as the treasury direct site that says gift tax reporting may apply (possible they just mean going over the 16k). I tried calling them but cannot get through, so thought to post here thanks!

        1. Just to clarify, my understanding is you have two separate unrelated issues. Gifting and reporting of such to the IRS. And amount of Gifted IBonds one can receive in a years time. Even though you plan to spread the potential 20k gift over two years into your accounts, that is totally unrelated to the fact you gifted 20k and therefore must file that form to IRS. Because at purchase that 20k is theirs, you cant unwind it. Its just the delivery time is being massaged for the annual received contribution limits.

          1. Grid, thanks for motivating me to go look up gift tax rules: I had forgotten that the tax is owed by the giver, not the receiver. And the taxable event in this case is the purchase of the I-Bond. It’s irrelevant when it’s delivered. And if the recipient is one’s spouse, no gift tax is owed.

  16. When is interest credited to an IBond? Bought a 10k bond in early October. Interest rate for the remainder of the six month period was 7.12%. Bought a second 10k bond in early January. Interest rate rose from the 7.12% initially to over 9% currently. I understand that interest compounds semi-annually. The October 2021 bond has had $146 in interest credited and the January 2022 bond has had $116 credited. Both numbers seem incorrect and very low. Both amounts credited seem to defy duplication with any computation. Treasury Direct will not answer calls, address emails, or offer any other means of communication. What am I missing? Can anyone provide an equation for how to compute interest on an IBond?

      1. YouTube I should have thought of that. I looked closely at their web site and have no idea what the inflations historic rate has been. None.

        It seems to say they’ve paid over 9.2% for 20 years

  17. With April and May combined together, the new I-Bond rate would be 3.34% with 4 months still to go.

  18. Just saw the last youtube video from DiamondNestEgg:
    “How to Buy I Bonds With A TRUST Account on TreasuryDirect “, which
    explains that in addition to your purchases as individuals and gifts,
    a trust can buy another $10k/year of i-bonds. (https://www.youtube.com/watch?v=7OWgbccetv8 )

    Disclosure: I am not associated to DiamondNestEgg, nor I know the person, I am just sharing with III’s what I saw. I assume some may be interested.

    In the video she mentions how easy it is to create a trust for this purpose using your own s.s. and existing bank account.

    What she does not mention is: Can every person in my family create a trust and buy each another $10k? Can you create more than one trust and buy $10k in each?

    She does mention that next week she will publish how to easily create online a revocable living trust for this purpose. Thank you DiamonNestEgg!

    1. Thank you for the link to the video. I watched it and realized that I already have a suitable trust to use for purchasing I Bonds: my gun trust that I set up some 10 years ago (many Texans have gun trusts). So I have opened a TD account for the trust and will be purchasing $10,000 of I Bonds next week.

  19. I don’t think this has been mentioned. Are I bonds a reason stock and bond markets are down? Think about it…much has been said about a couple of thousand dollars per individual in stimulus payments juicing the economy and stock market. Now everywhere I look I see what a great investment I bonds are…they certainly have beaten cash, stocks and bonds this year! Now..what if most people strive to put away 10K…much more than the stimulus payments…into I bonds? What if they sell some stocks and bonds to buy I bonds? I know of quite a few individuals who used to dollar cost average into a S and P ETF who now are buying an I bond each month with that money. I bought 10k of I bonds in January…that is money that won’t go into other investments.

    1. Now that I have a Treasury Direct account set up for I Bonds, I have become aware of other opportunities that the account provides such as the purchase of 2 year Treasury Notes. I am pulling money from an online savings account that pays .6% and buying 2 year T Notes that pay 2.6%. I may eventually have more 2 year T Notes than I Bonds. So, at least for me, I am pulling a significant portion of rainy day funds from the online bank and investing at Treasury Direct.

  20. Close to 100% of the Ibond discussion has centered on the benefits of capturing the ~ 7% nominal return in the current environment. Everyone understands that the “real” component of Ibond returns is 0%, so for the life of the Ibond you will break even versus inflation. Earlier there was some discussion of cashing them in early and paying the forfeited interest penalty.

    I pose a different question: Are you willing to accept a 0% real return for the long term, say 10 to 30 years? Or do you think you can do better than that with other asset classes? If the answer is yes, then what are the conditions you would use to decide to cash them in? Or would you automatically hold them for five years minimum to avoid forfeiting the three months interest?

    And yes, this ignores the other issues like maximum purchase amount, adding an additional account, dealing the US Treasury, etc. Not that those issues go away.

    1. I don’t plan on holding for 10 or 30 years. But as long as I can get 7% + nominal returns (while one year CDs or money funds are at much much less) , I will buy I bonds. If CDs or money funds or T bills rise to a competitive rate, I will consider those. I just think that a portion of assets needs to be in safe liquid (I bonds are liquid after one year) investments. My current expectation is to hold for three to seven years.

    2. if the nominal rate drops to 1 to 2%, forfeiting 3 months of interest to cash them in will not be much of a penalty.

  21. What are the rules for compounding on I-Bonds? In other words, when is the periodic interest earned added to the principal base on which the interest going forward is calculated? Annually, semi-annually, something else? Sorry if this has already been discussed.

      1. Bur,
        Thanks for this. and thanks for indulging me. If I weren’t such a lazy SOB, I could have done that research myself. I think the semi-annual compounding, along with the fact that you don’t have to pay taxes until the bonds are cashed in, is a subtle, but important, benefit of the I-Bonds. In effect, the interest is allowed to compound tax-free over the holding years – not immaterial if you hold log-term.

  22. After the ludicrous rants and near-libelous accusations about illiquids from him and his still unidentified SA savant woman a while back, many of us have learned to ignore the good kap’n’s snarky posts. He even swore never to return after that fiasco, yet he still drops by every now and then to kick sand in everyone’s eyes. And so here he comes again to brighten your day.


    1. Camroc. I have reached out to my contacts in finance, financial advisors/consultants, and the consensus is that i-bonds are a good investment for the foreseeable future for the many reasons that have already been discussed.
      As for KL, he continues to pop in, and look to wreak havoc on this forum and certain individuals. He continues to not seek professional counseling to help mend his life after he has had some personal issues. This has led to his continued hatred to compensate or to make himself “feel” better” about his personal life. I hope he turns his life around and I wish him well.

    2. Thanks for your post Camroc. Spot on.

      Frankly, KL is acting like a troll – dropping in just to stir up a mess, even after his promise to leave and never come back. Too many good people on this board respond to him as if his rants actually deserve a response. Best path forward is to just ignore him, IMHO.

      First rule of the internet: don’t feed the trolls.

      1. Agreed, Private. Never feed the trolls. Keeps ’em coming back. Which is not what this forum is about.
        Re: I-Bonds. I’ve been picking up small amounts here and there, outside of my formal portfolios. In this market, the 6-month yield is unbeatable, particularly when it shifts up to 9+% in May. Under current circumstances, that rate is not likely to come right back down to earth in 2023 either.
        Are I-Bonds a major investment? No, in my opinion, given that it’s limited, under average circumstances, to 10K per annum. However, we live in treacherous times, and having a few bucks sitting around in gold and I-Bonds and perhaps even a bit of bitcoin (which I haven’t approached yet) may serve as a convenient temporary hedge, along with a well-maintained Victory Garden.
        I currently live across the river from DC, and no one has any clue as to what the resident clowns from both parties running our National Asylum will do next with what’s left of our once robust economy. Aside from spending even more money we don’t have and can’t realistically repay.
        Right now, it’s a reasonable idea to have at least a limited amount of funds in investments that are likely safe, at least for awhile. You never know how things will end.
        So socking away modest investments that will likely remain liquid under most moderately forseeable circumstances, while not exactly an investment strategy, is at least a Plan B or C in case one or more world “leaders,” including our own, end up igniting a catastrophe. It’s an individual choice, and not worthy of ridicule. At least in my opinion.
        Meanwhile, have a great weekend, folks.

  23. I have read with great interest the conversation regarding I-Bonds over the past few weeks and simply cannot understand the fascination with them. Yes, they do provide some decent returns at the present time, single people are limited to $10k per year. Even with a return of 8%, you will have to pay taxes on the interest income, so that basically lowers your return to about 6.5% per year. So with a $10k investment with those, many investors will only clear about $650 per year after taxes. Gifting to family members – Ok, but how much are you going to earn after gifting all that money away? Not much, and perhaps a negative return after these “gifts” are done.

    Sometimes I just have to wonder who initiated this conversation on I-Bonds when the contribution level is so low. Probably a party that has very limited funds and does not have much money to invest and a terrible sidetrack for investors that have considerable funds to place into the market.

    Had a long conversation with a family member today and going to have her maximize her Roth in the upcoming year. And while a mediocre grade REIT, she will put some tax-free funds into a few shares of something like CIO-A, with a yield of a little over 7%. As always, it will be placed in a well diversified portfolio. I’ll certainly recommend this website to her – for a little laughs.

    Happy “gifting” of the I-Bonds to you and your family members!

    1. Unclear to me why one cannot see benefits of owning them but we all have our own criteria. Contribution level low? Diversification with minimal risk compared to any individual preferred. Taxes deferred until sold–to be timed at a convenient year plus no state or local tax. Negative return? I cannot even begin to understand that point, sorry.
      I could list more but the tone of your post is not constructive so will end it here.

      1. Furcal – Yes, they are probably great investments with parties that have low investment funds. Fully support this idea for people that have $25,000 or less to invest and I cannot find a better idea for them with limited funds. Federal taxes will take a big chunk out of the earnings for those in the larger tax brackets.

        And yes, probably negative returns for people that are posting on this board and are trying to “gift” these to family members. How much am I going to make if I give $10,000 to my niece? It would be a negative return there for me. So she earns $800 per year and I had to give away $10,000? Looks like a bad return to me, but this is what the message board is proposing the past few weeks.

        1. When I read most of the posts from the past I do not recall the gifts going to other people outside the husband and wife. It was meant to capture the interest now while high and then gift them to each other later on. I must have missed something about giving away money to random family members and negative returns which is basically impossible with ibonds. Low returns yes. Negative no. Whatever I guess…

        2. Gee, I guess in my family at least, we were fortunate. Our rich uncle didn’t think primarily of his giving money to younger or less financially secure relatives in terms of it generating negative returns for himself..

        3. I dont see how your comments make any sense, KL (w/all due respect). People with substantial funds diversify. IBonds are simply one way of doing that, in a limited way. In addition to the various purchasing options mentioned here you can also use some of your tax refund to buy them. In the short term it’s impossible to invest say 200k+ in them, so i guess that’s your point — it’s a very limited investment. But as part of my portfolio, it’s a great rate, completely safe investment. In terms of taxes, you’re going to pay them anyway (unless u have munis) so I don’t see the logic of that point. And I’ll take a yield of 7% plus from iBonds over CIO-A any day. Zero chance of principal loss on one, not so much on the other. If you know of a better basically risk-free investment for this yield please share.

        4. KL, I rarely post but am doing so to differ with your suggestion that people with less to invest or with limited funds are the appropriate investors for I Bonds. My husband and I have purchased together almost $200K since March. As a couple with a few pennies in investments and assets it follows that we have extensive estate planning. As such, we have revocable and irrevocable trusts; additionally we have LLCs and PLCs, etc. We always maintain liquidity not so much for emergencies but to take advantage of market opportunities. I only wish all our liquidity could offer this return. BTW, while the interest will be taxable it will be offset by interest deductibility for the investment interest cost associated with these purchases.
          Again, I am grateful for all the information shared whether it is for those investing for a fixed retirement or those investing for multigenerational purposes.

          1. Petosky, assuming you’re respecting the $10k annual limit, and subtracting the two of you, and assuming you each bought each other a gift, that leaves 16 entities which have invested the $10k? Yowza that’s a lot of bookkeeping…

    2. Canada previously had a product called “Canadian savings bonds” structured similarly to iBonds until they suddenly stopped selling them. Difference being is you could buy unlimited amount without penalty for early redemption.

      Stating CIO is a better investment than a US government treasury. Is like saying you like to buy more when it keeps dipping.

    3. kaptain,

      Say you had 200,000 of fresh money to invest in fixed income (whatever) for your wife and yourself. 12 months ago inflation was raging and continues. We all knew preferred/BBs were going to take a hit for the most part. Common securities likely to go down. IG was paying 5% at best. The fascination was the fact you could take 20K in Nov/Dec 2021 and get a pretty solid return with a guarantee to get your money back. And then just a few months later park another 20K in Jan of 2022. So 40K was basically decided on quite easily which is a considerable percentage of 200K.

      Not really hard to figure out why it was so popular among us right? I do not see it as a joke when the next 6 month period is almost 10% I think and 7% before that. 3.x% before that. Who knows what comes after the 10%. It is a very nice guaranteed return on 40K with no risk of losing the principal. Took me 10-20 minutes to set this all up.

      But then this was when we were way ahead of the game here. Not discussing it now.

    4. Wow seems like someone has an axe to grind. Let’s look at what you said

      * What is the fascination with I-Bonds – the high risk free return.

      * You have to pay taxes on your interest income – Yes when you redeem them but you are exempt from state taxes. And your insinuation is irrelevant as you would pay taxes on any returns you generate on your REIT dividends or other investments

      * How much are you going to earn after gifting all that money away – The whole gifting conversation was primarily based on the concept of pre-buying and gifting among spouses. So no money is being given away. I give $10K to my wife – she gives $10K to me. Simple concept.

      * A terrible sidetrack for investors that have considerable funds to place into the market – UMMM NO. Speaking as someone who has considerable funds, there is a place in everyone’s portfolio for I-Bonds. Am I going to get rich with them – no. They make up les than 1.5% of my total portfolio. But it is a hell of a lot better earning 7.12% interest and soon to be nearly 10% interest on $60K ($30K for me, $30K for my wife) than the 0.5% this money was earning in a money market or the 0.7% it was earning in a CD. I simply took a portion of my safe money that allows me to not worry about the market fluctuations and shifted it to I-Bonds while the rates make sense. Pretty easy concept to understand

      * I hope you and your family member enjoy your little laughs about this website. Meanwhile I suspect my wife and I will be enjoying our own laughs next year while spending the extra $5K or so in I-Bond interest we will earn on a nice vacation. We will enjoy a few drinks in your honor

      Happy investing to you and your family members

    5. Lou, I appreciate your thoughts as each of us come from different perspectives on each investment, but you truly are missing the point of I-Bonds. First let me begin by telling you I spent 24+ years on Wall Street managing primarily institutional money and have NEVER had an investment that was US Government backed, completely risk-free, paying 7+%, having no commission to purchase, cannot decrease in value, tax deferred and the holder can chose to cash out after a short holding period with no risk of principle loss. As you stated (you may be a psychic) I DID give $10000 each of I-Bonds to my niece and new husband for their wedding gift and another $10000 to her brother (my nephew) because they would someday get these funds from my estate when I pass someday anyway (I am in my mid 50’s). Yes, this isn’t an investment that you can put millions of dollars into, but it was not designed for that either. I-Bonds wear initiated to give US citizens an opportunity to exchange their fiat currency for an investment that cannot loss money do to market losses or inflationary pressures each year. I purposely pay $5000 extra on my taxes each year so I can buy the initial $10000 of I-Bonds plus the $5000 from my US tax refund because I find this to be a superior investment to almost anything else in my extensive portfolio. I’d be glad to answer any questions you have. In Latin we say… noli esse stultus et emere hoc! Hoping you find your treasure, Azure

      1. Azure, thanks for your kind and gracious comment last night. Hopefully we can all “agree to disagree” on investment strategies without the name calling that was done earlier today (but not by you). We all have different thoughts and strategies on investment income. You make excellent points.

        At least for me, I currently have brokerage accounts, Roth IRA and retirement accounts at Fidelity, Vanguard, TD Ameritrade and Schwab. Add in my two accounts at U-Haul and then a small 457 plan with Nationwide and sometimes it just gets so cumbersome. Adding in another account for less than 1% of my total assets with the I-Bonds clearly does not make sense to me at the present time – even though the rates look attractive. My overall financial planning strategy includes paying zero taxes on all of my retirement accounts and would be happy to share this with you on the REIT chat board, as we don’t get too many comments over there. Wishing you continued success and thanks for a great post and positive message.

        1. Kaptain, thank you for your post and interesting explanation. What REIT message board and I’d be glad to continue our conversation. Have a great weekend, Azure

          1. Azure – I meant the REIT Chat category on this website. Sorry I did not clarify.

            In regards to you giving 10k in I-bonds to your niece and her new husband, I believe that was an excellent strategy for a younger couple. It will provide them with interest income and stable value on the original investment, especially if they decide to use the funds to purchase their first home. I am now in my mid 50’s as well and my niece asked me about I-Bonds. However, instead of that investment, I encouraged her to max out her Roth IRA this year and then to place another $6,000 in the account on January 2, 2023. While no tax deduction, her earnings will grow tax-free for many years and will never be taxed if she does not take out the funds until age 59 1/2. Enjoy your weekend as well.

    6. The I-Bond is backed by the full faith and credit of the US Treasury unlike CIO that is a micro cap $650M REIT and who knows what paying 7%. I believe there will be taxes due from its dividends too. But no state taxes on I-Bonds. So depending on your tax bracket and where you live, I-Bonds in this current high inflation environment are good return and portfolio diversifier.

    7. I’ve seen people on here buy things I wouldn’t touch with a 10-foot pole, but I wish them well. There’s no need to get snarky or border on ridicule. We’re all online friends and all learning from each other.

      I have a few problems with I-Bonds:
      1. CPI-U badly underestimates the true inflation rate we’re all experiencing. The upcoming May reset reflects a rate of 4.82%. That rate is doubled in the calculation, but, according to our masters, CPI-U isn’t even 5%!
      2. Low purchase limits – already beat to death.
      3. Sacrifice 3 months interest if cashed before 5 years.
      4. Fixed-rate interest is 0%.

      Having said all that, I invested the max last year and this year for both of us. With the economy teetering on recession, it’s hard for me to risk more money in the stock market, knowing 20-50% of my portfolio value is at risk. Real estate cap rates are sky high, reducing returns to unappealing levels and all assets are in a bubble with a major adjustment overdue. When looking for an inflation hedge, I-Bonds must be at the top of most lists. Risk-free returns, no state tax, some liquidity and reasonable returns, although I realize they really don’t track “real” inflation. And the returns are compounded semi-annually, resulting in [compound] interest earned on interest already paid.

      According to my calculations, if inflation stays at this level for another year, then returns to “normal” two years after that, I will earn an XIRR of 12.3% after 5 years, an APR of 11.7% and a simple yield of 32.8%. That’s getting $13,280 back after 5 years on a $10,000 investment. I have prepared a table, (that I can’t share here,) which shows all the data, including the early redemption penalty, which doesn’t look that bad. Given the economic outlook, the risk/reward potential is unbeatable IMO.

      Good fortune to all!

      1. Bruce, BLS reported last month that year-over-year CPI-U inflation was 8.5%. You say it is being under-reported at less than 5% – care to share where you got that info?

        1. I should have said the “semi-annual inflation rate” cited by the TD page was below 5%. The calculation for I-Bonds doubles it to get to the annual rate. The new composite rate beginning in May is 9.62% which means the semi-annual rate is 4.81%.

          It still underestimates “real” inflation IMO. Especially since they keep tinkering with how the index is determined.

          And it lags quite a bit. According to this page the rate jumped by 1.34% in one month from Feb to Mar 2022!

  24. If rate goes to zero then we are all doing pretty well as inflation will also be zero, and that won’t happen. Other low risk short term investments would then have to be very low as well. That said, I’m not extending my purchases.

  25. About 3 weeks ago, my wife tried to gift me I bonds; however, something went wrong and she instead purchased them for herself. As she already had purchased the limit for this year the Treasury sent an email to her at 4AM on the day the purchase was scheduled informing her she was over the annual limit and the funds would be returned (why they didn’t cancel the order I don’t know).

    Today, her account still shows the “extra” bonds in her name and no funds have been returned. Has anyone else encountered this problem? If so did you get the investment back or did you wind up with more than 10K of I bonds for the year?

    1. One of my kids bought at the very end of December, but funding didn’t happen until Jan. Then he bought more in Jan. However, they treated the Dec purchase as Jan (darn!), and refunded his actual January purchase. It took weeks — maybe 3 or 4? — quite a few weeks before the refund happened. It’s government, you know.

    2. I had a similar issue where purchases I made in the gift box were considered part of my persona; purchases and I received an email that the iBonds I purchased through the gift box exceeded my 10k limit and had been cancelled. I sent them an email through their Contact Us button questioning this, and I received a reply in under 12 hours acknowledging that they had made a mistake and had already reissued the ibonds in my gift box. I was pretty impressed with how quickly they responded and corrected the problem. Who would have guessed that Treasury Direct would have better customer support than my various brokerage accounts!

  26. If you want some nice charts for what the April’22 I bonds are expected to earn for the next several years (given the bond markets expectations for inflation in how they price TIPS, etc), you can check out this post on another finance forum.


    You can use it to decide how many years worth of gifts it might make sense to lock up, for example based on if you think 6% is good enough, or 5% is fine, etc.

    Thursday is the last day to buy, and sooner probably can’t hurt to avoid any snafus.

  27. Tim,

    Thanks for doing this! Interest in i-bonds is only starting, imho, and
    it will be interesting to see if the treasury will modify the rules they have.
    There is some talk that they should increase the max from $10k to $100k.

    In addition to buying each $10k, anybody can buy “gifts” without limit, but gifts can only be “delivered” to the recipient at a rate of $10k/year, as has
    been extensively posted here (unless they change this in the future).

    As of today, my family has bought each $10k, and gifts for $30k each (deliverable on 2023, 2024 and 2025, i.e. about 2.5 years from today assuming they will not change the $10k rule , to >$10k or maybe to less!).
    We will receive 7.2% for the first 6 months, 9.5% the next 6 months, and who knows how much after that. For us, this helped reduce the large amount of cash sitting at 0%, that otherwise would continue to sit there.

    How many gifts have other III readers bought?


    p.s.: if you want to guarantee the 12 months of high interest, you can still buy i-bonds during April (preferably before Thursday, otherwise you will only have 6 months guarantee beginning in May).

    p.s.2 The best and most likely 100% reliable source for info about i-bonds that I have found are the “Diamond NestEgg” videos on youtube.

    p.s.3 Do not forget: i-bonds only guarantee the value of your money with practically 0 risk ; you won’t get richer with i-bonds like you could potentially with stocks or preferreds, but obviously with significantly higher risks.

    1. Please define the reference to deliverable in future years.

      We did everyone 10k 2021 followed in short order by 10k 2022.
      Owe taxes 2021 so can not send tax refund to I-Series.
      Thought the gift option could be utilized in 2022 for 2022. Are you front loading? Must you be related to gift box recipient?

      I’ll go through the TreasuryDirect.gov site again. Your cliff notes are helpful.

      Thank you

      1. Mz. G,
        Im not an expert, most of what I know is from reading TD and the videos I reference.d in my previous post. My understanding is that you can buy upto $10k/year in i-bonds for yourself, but you can buy as many “gifts” to anyone (not only family). Td holds these gifts in your account. You cant touch them and they stay there until you deliver the gift to the recipient. The $10k/year limit applies to the recipient of a gift too. So you can deliver a gift only if the recipient has not used the $10k/year. If you buy $30k in gifts to someone, then you can deliver $10k every year the recipient does not buy any bonds. In this case, you could deliver (but do not have to) $10k in 2022, another $10k in 2023 and $10k in 2024. You can hold the gift in your account as long as you want, do not need to “utilize the gift option for 2022 in 2022”. Hope this addresses your question

        1. I watched several videos on YouTube and I understand it exactly as you stated it. The one catch I see is if you buy too many gifts you are stuck for years to deliver them. If the rate goes to zero you are trapped holding them. I bought $10,000 for my wife and she bought $10,000 for me. If 2023 has low inflation I can get out with only a 3 month penalty.

          One question I do have is the 3 month penalty. Let’s say next year the rate goes to zero. They state the penalty is your last three months if you hold less than 5 years. Will the penalty then be zero? If anyone has the answer I would appreciate it.

          1. Jb/az,
            You are exactly right about the risk of being stuck for years if the interest i-bonds will pay is lower than what you would like (or could receive investing somewhere else). That’s probably why I have not heard of anybody gifting beyond $30k (which can deliver the last $10k in 2.5 years in 2025). If someone has, I would like to know!
            It is a guess you take, how likely is it that inflation will go from the current 9.6% to 0% by November 2022 or even May 2023? Even if inflation is “tamed” we are likely to see (I guess) >2% or 3%. Assuming you want to cash your i-bond to invest in something with low risk as a CD, how likely is it that a CD then will pay significantly more than the i-bond? It is possible, but I evaluate it is a relatively small risk, especially if I want to continue to hold this amount in safe vehicles. Also, consider that i-bonds are state tax free and taxes are deferred until redeemed. And if you do wait the 5 years, there is no 3 month penalty.

            Regarding the 3 month penalty being $0 if the rate is 0%, this is what TD states: ” if a bond is cashed within the first five years after its issue date, interest
            earned during the three months prior to cashing will be forfeited”.

            So yes, my understanding is that if you cash at least 3 months after the rate is 0%, you have a $0 penalty.

            Finally, if someone wants to gift another $10k to be redeemed in future years, tomorrow is the last day to ensure a 7.1% + 9.6% for the next year. Buying in May, you only ensure the 9.6% for six months.
            On the other hand, one should also consider waiting until October to see where inflation is, and only then consider adding more gifts.

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