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Post by devotion2 on Apr 5, 2022 13:21:31 GMT -6
anitya, the posted interest is net of 3 month penalty. Also, not 6 months yet from November 2020.
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Post by anitya on Apr 5, 2022 13:31:24 GMT -6
anitya , the posted interest is net of 3 month penalty. Also, not 6 months yet from November 2020. Thanks. You are quick witted than I am! Then, it looks like interest is posted to the account (increasing value of the account) only on the first day of the month following the month for which interest is earned. Makes sense and resolves the question posed earlier in the thread and was posed to Treasury Direct as well which they avoided answering in their reply. To sum up, to cover for the three month interest penalty for potential redemption in the first five years, interest is not posted to the account for the first three months after the issue date and account value increases only starting the fifth month when interest for the fourth month after the issue date is added to the account.
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Post by Admin/YBB on Apr 11, 2022 20:37:25 GMT -6
Buying I-Bonds as Gifts
This is a 2-step process. The first step is to buy gift I-Bonds & “hold” in the gift-box area of your Treasury Direct (TD) account. You have to know recipient’s name & Social Security/Tax-ID number. The minimum hold time is 5 days but there is no maximum hold time. Gifts are irreversible – you cannot cash gift bonds yourself but can only deliver to the named recipients now or in the future. Your annual bond purchase limit doesn’t apply to gift bonds & you can buy any amounts (more or less than $10K) for any number of people (but annual bond limits will apply to recipients in the delivery year). Also keep in mind your annual gift exclusion limit to avoid filing the IRS Gift Tax Form 709. The second step is to “deliver” the bond gift. You also have to know recipient’s TD account number; if the recipient doesn’t have a TD account, then he/she has to open one. Annual bond limit(s) will apply to the recipient(s) in the delivery transaction year, so make sure that in that year, the recipient(s) is (are) not buying bonds themselves or receiving gift bonds from someone else. Gifts of I-Bonds among family members and friends provide a limited way to overcome the annual bond purchase limits. Clear Practical Instructions thefinancebuff.com/buy-i-bonds-as-gift.htmlTreasury Rules & Instructions treasurydirect.gov/savings-bonds/gift-a-bond/treasurydirect.gov/research-center/history-of-savings-bond/plan-gifts/treasurydirect.gov/savings-bonds/gift-a-bond/gift-announcements/Addendum: 4/12/22. Entity accounts (Living Trusts, partnerships, corporate, etc) cannot buy gift I-Bonds. Entity accounts have many rules and limitations, see treasurydirect.gov/savings-bonds/businesses/treasurydirect.gov/indiv/help/treasurydirect-help/user-guide/4/24/22. A post from the closed Fidelity Investor Community ( see) clarified that for the gift I-Bond DELIVERED, the amount used for the annual limit for the recipient is the initial purchase amount, not the delivered principal plus interest amount. 5/15/23. A poster at MFO reported that reclassification of purchase into Gift was possible to correct mistakes. www.mutualfundobserver.com/discuss/categories/other-investing
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Post by Admin/YBB on Apr 12, 2022 6:41:52 GMT -6
New I-Bond Rates
I-Bond rates change on May 1 and November 1 (May-November-May pattern). The inflation adjustment is based on the recent semiannual change in the CPI-U, unadjusted (released monthly). So, the recent CPI-U data used are March-September-March (released in April-October-April). The table below shows the recent history; the BLS Inflation Calculator can also be used. CPI-U, Unadjusted fred.stlouisfed.org/graph/?g=O9MnI-Bond Rates Info treasurydirect.gov/savings-bonds/i-bonds/i-bonds-interest-rates/BLS Inflation Calculator www.bls.gov/data/inflation_calculator.htmBLS CPI-U, Current Release www.bls.gov/news.release/pdf/cpi.pdf Month CPI-U 6-Mo Change Treasury Inflation Announcement 09/2019 256.759 03/2020 258.115 0.528% 0.53%, 5/1/20 09/2020 260.280 0.839% 0.84%, 11/1/20 03/2021 264.877 1.766% 1.77%, 5/1/21 09/2021 274.310 3.561% 3.56%, 11/1/21 03/2022 287.504 4.810% N/A, TBA 5/1/22 If the fixed rate remains at 0%, then the new I-Bond rate on 5/1/22 should be 9.62%. if the fixed rate is bumped up, then the new rate should be 9.62%+ (unlikely). Limit for buying I-Bonds in Treasury Direct (TD) accounts is $10K/yr/TD-account. Although the limit is not enforced at the time of purchase, any excess will be refunded after some delay, so watch the limit yourself. To buy gift I-Bonds & “hold” in your account, you have to know recipient’s name & Social Security/Tax-ID number; to “deliver” bond gift, you have to know recipient’s Treasury Direct account number (see the previous post for more details). Special rules apply for paper I-Bonds purchased through the IRS tax refund. Note: In the media, www.wsj.com/articles/the-safe-investment-that-will-soon-yield-almost-10-11649769505tipswatch.com/tracking-inflation-and-i-bonds/www.marketwatch.com/story/the-silver-lining-of-surging-inflation-i-bond-yields-should-climb-above-9-11649784459www.depositaccounts.com/blog/inflation-treasury-series-i-savings-bonds/
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Post by Admin/YBB on Apr 13, 2022 7:52:47 GMT -6
Linking a relevant I-Bond post in a MFO thread. www.mutualfundobserver.com/discuss/discussion/comment/148361/#Comment_148361"@hank, I-Bond sales data are available as Excel download, www.treasurydirect.gov/govt/reports/pd/pd_tdsecuritiesissued.xlsmMonthly I-Bond Sales 10/2021 $0.23 billion 11/2021 $1.07 billion (new rate 7.12%) 12/2021 $2.78 billion 01/2022 $3.26 billion 02/2022 $0.91 billion As noted in the I-Bond thread, one can bunch up lot of buying as gift I-Bonds. So, let us say that you have 5 favorite relatives and friends (include me, if you want (- , then you can buy, say, $100K for EACH in gift I-Bonds to HOLD in your Treasury Direct account, and dole/DELIVER them out at $10K/yr/person over 10 years. That would be $510K total in I-Bond purchases NOW or ON 5/1/22, $500K in gift I-Bonds and "puny" $10K for yourself (- . Well, this a hypothetical for those who complain about not being able to buy enough but think of the estate and asset transfer angle. Of course, you cannot have the gifted bonds yourself for any reason (actions are irreversible). What if the I-Bond rate collapses in a year or two? Well, then you still go through your estate plan but the receiver can sell them and buy something else. Edit/Add: Treasury Direct also has linkable history of Savings Bond sales, 1935-2012. Sales peak (including all types of Savings Bonds) were in 1944 ($16.04 billion; WW II time), 1978 ($7.96 billion), 1986 ($11.91 billion), 1992 ($17.70 billion), 2001 ($11.58 billion), 2005 ($22.43 billion). I am sure there is a good story behind the ups and downs in the Savings Bond sales. www.treasurydirect.gov/indiv/research/history/history_sbsales.htm"
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Post by Admin/YBB on Apr 19, 2022 15:35:22 GMT -6
Taxation of Savings BondsThere are extensive references (88 on my count!) to Savings Bonds in the IRS Publication 550. Gist is that the tax options are deferral method (used by most people) and annual method. Whichever method is used must be used for all Savings Bonds. Changes are possible. Change from deferral method to annual method can be done anytime without the permission of the IRS; to start, pay all accumulated interest up to that point. But change from annual method to deferral method requires permission of the IRS and the request must be made following a specified format. Regardless of the method used, the only 1099-INT will be issued will be on sale or redemption; so, you have to figure out tax from changing values of the Savings Bonds. Keep good records and inform your heirs or estate executor (if you name one) if you are using the annual method; otherwise, they may also pay tax when they get 1099-INT. www.irs.gov/pub/irs-pdf/p550.pdfMore treasurydirect.gov/savings-bonds/tax-information-ee-i-bonds/
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Post by Admin/YBB on Apr 24, 2022 8:03:02 GMT -6
A post from the closed Fidelity Investor Community clarifying that for the gift I-Bond DELIVERED, the amount used for the annual limit for the recipient is the initial purchase amount, not the delivered principal plus interest amount.
neli Level 9 In response to neli 38m ago (4/24/22)
@yogibearbull
About the delivery of the gifts: The amount you deliver includes all interest earned on that bond when you deliver it but only the purchase amount counts for the $10,000 per year limit. I sent an e-mail to treasury direct and they confirmed that this is correct.
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Post by Admin/YBB on May 2, 2022 8:09:16 GMT -6
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Post by Admin/YBB on Aug 12, 2022 6:14:58 GMT -6
Welcome to the Club, JR, A New I-Bond BuyerM* JR compares I-Bonds and 5-Yr TIPS with T-Bills/Notes and reaches favorable conclusions under the title, I-Bonds Forever? (Well, no, but still good). He used 2 long-term scenarios: 1st, since 09/1998 (I-Bond inception) and 2nd, since 01/1995 (when 5-yr TIPS issuance resumed). For I-Bonds, he used 2 assumptions - the initial 3.4% fixed/base rate and 0% fixed/base rate (to entirely remove that effect). So, this 2nd scenario only captured the CPI effect and actual I-Bond buyers did better than that bottom line. Unsurprisingly, his conclusions were that that the initial fixed/base rate was a give-away for then (1998) new I-Bonds and those did the best. But 0% I-Bonds also kept up with alternatives. He cautions about their limitations (annual limit, non-tradability) and to keep future expectations reasonable. But not to pass up a good deal, he has just now bought I-Bonds for both his wife and him. Welcome to the club JR! As has been noted here, these conclusions are not surprising because I-Bonds, and 5-yr TIPS held to maturity, have kept up with $$CPI. www.morningstar.com/articles/1108848/i-bonds-forever
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Post by Admin/YBB on Oct 9, 2022 20:31:06 GMT -6
#IBonds 11/1/22 Rate Est Twitter LINK09/2021 #CPI 274.201 09/2022 CPI est +8.1% yoy est, so 296.4253 est 03/2022 CPI 287.708 Mar-Sep est 1.0303, or 3.03% New fixed rate 0-1.5% New I-Bond Rate 6.06-7.61%Update 10/13/22 #Treasury announcement 11/1/22 Current 9.62% for 6 mo until 10/31/22 Edit/Add: Above is for seasonally adjusted CPI. Treasury uses unadjusted CPI. The new rate est then is 6.278-7.825%CPI Adjusted CPI Unadjusted
Edit/Add 10/13/22: September CPI was +8.2% y-o-y Updating calculations for unadjusted CPI, New fixed rate (November 1) 0-1.5% est New I-Bond Rate (November 1) 6.47-8.02% est
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Post by Admin/YBB on Oct 10, 2022 18:34:56 GMT -6
Treasury Direct (TD) has redesigned its website and none of the TD links in this thread work anymore. I will try to replace them wherever possible, but some old links may just be gone. Some new links were also found. treasurydirect.gov/
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Post by Admin/YBB on Oct 25, 2022 16:37:08 GMT -6
Alert: Treasury Direct FAQs say that Friday October 28, 2022 will be the last day for the current 9.62% rate. Beyond that, lower November 1 rate will apply. Imagine banks moving deadlines on debt/deposit offers like that by just posting FAQs and citing staff and systems inadequacies as reasons. When do I need to complete my I Bond purchase to receive the 9.62% rate?
You must complete your purchase and receive a confirmation email by October 28, 2022, at 11:59:59 PM ET. I Bonds purchased by this deadline will have an October 1st issue date. You will receive the published rate for six months (i.e., October – March). Due to high volumes, we cannot guarantee that your bond purchase will be completed before this deadline if your account or purchase requires additional customer support for issues such as identity verification. What happens if my purchase is completed on October 29 or later?
Due to processing and payment settlement timeframes, bonds purchased in TreasuryDirect October 29 through October 31 will be issued in November. As a result, these bonds will receive the rate announced by Treasury on November 1. This rate will still be applied for the next six-months (i.e., November – April). www.treasurydirect.gov/help-center/savings-bond-faqs/Edit/Add, 10/28/22: Treasury Direct will be shutdown for maintenance all of Saturday (11/29/22) and Sunday (11/30/22) and won't be available. It will reopen on Monday. Twitter LINK
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Post by Admin/YBB on Nov 1, 2022 8:15:10 GMT -6
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Post by Admin/YBB on Nov 3, 2022 17:06:14 GMT -6
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Post by Admin/YBB on Nov 6, 2022 6:42:38 GMT -6
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