# Are I Bonds the Best Place To Park Short Funds?



## Pecos (Jun 23, 2020)

I have a fairly large pot of money currently parked in a CD that is paying 3%. I am planning to use that money to move to Washington within a couple of years and I want to be absolutely sure that it will be there went we make our move.

Unfortunately, my CD is maturing in the next few weeks and the best interest rates I can find are about 1% or less and carry longer terms than I want. U.S. Government I bonds, which will pay slightly more, are starting to look like my best alternative for at least part of these funds. I will be limited to $10K each calendar year, and can park another $10K in an account for my wife. We can move another $20K into I bonds next year.

I have looked at short term corporate bond funds, but they still look more volatile than I want. 

So what is your opinion about I bonds, particularly those bought directly from the Government Treasury Website? Has anyone encountered any difficulty getting their money back in a timely manner? Does anyone expect that regular CD's will start paying more than the inflation rate anytime soon?


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## Aunt Bea (Jun 23, 2020)

I'm old fashioned and more than a little bit insecure so I keep my short term money in rock-solid readily available money markets, CDs, etc...

It's tempting to look for higher returns but I try to go with the old adage that any money you will need in the next five years shouldn't be in the market.

It helps to take the sting out of the low yields on cash if you look at your portfolio's total return.

If ten percent of your portfolio is in cash with an annual return of 1.00% and the other ninety percent of your portfolio is invested in the market returning 7.50% your total portfolio is still returning a respectable 6.85%.

For me, the loss of a decent return on cash is the price of safety.

Good luck with your decision.


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## mathjak107 (Jun 24, 2020)

the total return on ibonds redeemed early is pretty low too.  if you redeem earlier than 5 years you lose 3 months interest . 


The fixed rate will be 0.00% for I bonds issued from May 1, 2020 through October 31st, 2020. The variable inflation-indexed rate for this 6-month period will be 1.06%  The total rate on any specific bond is the sum of the fixed and variable rates, changing every 6 months. If you buy a new bond in between May 2020 and October 2020, you’ll get 1.06% for the first 6 months.


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## StarSong (Nov 24, 2021)

I Bonds are now at 7.12%!

https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm#irate


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## Myquest55 (Nov 24, 2021)

StarSong - I saw that note about I-bonds.  You buy in at the face value and they earn interest.  They are 30 year bonds and you have to hold them for at least 5 years before you can cash them without a penalty.  Still, I thought I could spare some $$ for one or two.  (The minimum amount is $25)

I looked into opening a Treasury Direct Account so I could buy one but their set up was INSANE! They wanted so much information as well as passwords, secret photos, captions, etc.....I just closed the window and backed away. Gone are the days you could buy a bond at a bank. Sigh.


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## StarSong (Nov 25, 2021)

Myquest55 said:


> StarSong - I saw that note about I-bonds.  You buy in at the face value and they earn interest.  They are 30 year bonds and you have to hold them for at least 5 years before you can cash them without a penalty.  Still, I thought I could spare some $$ for one or two.  (The minimum amount is $25)
> 
> I looked into opening a Treasury Direct Account so I could buy one but their set up was INSANE! They wanted so much information as well as passwords, secret photos, captions, etc.....I just closed the window and backed away. Gone are the days you could buy a bond at a bank. Sigh.


I bought some.  As for the info collected, they collect the same info as any new bank account or credit card.  Standard ID including your SS# and state ID (driver's license) and for you to set up passwords, recognize a photo and answer secret questions.        

They can be cashed out after a year.  Yes, between 1 - 5 years there's a three month interest penalty.  Like a CD.  
Shrug  
Even with that penalty, current rates still work out dramatically higher than CDs or other safe, very conservative investments.


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## HarryHawk (Jun 12, 2022)

iBonds now paying 9.62%


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## Pecos (Jun 12, 2022)

HarryHawk said:


> iBonds now paying 9.62%


I think so and would be happy to put more into them.


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## Leann (Jun 12, 2022)

I bought an I-bond a few months back. Fingers crossed.


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## oldman (Jun 12, 2022)

I use I-bonds as a hedge against my mutual funds and single stock losses, but right now, I have about 80% of my portfolio in cash at this time. My FA had strongly suggested to buy into I-bonds just a few months ago. I was watching Larry Kudlow on TV about a month ago and he also suggested using I-bonds as a means to replace putting money into a savings account. Whether you like Kudlow or not, he has been more right than wrong over the years when speaking about the economy.

The philosophy of buying bonds is to use money that you think you won’t be needing anytime soon.


Leann said:


> I bought an I-bond a few months back. Fingers crossed.


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## StarSong (Jun 12, 2022)

oldman said:


> I use I-bonds as a hedge against my mutual funds and single stock losses, but right now, I have about 80% of my portfolio in cash at this time. My FA had strongly suggested to buy into I-bonds just a few months ago. I was watching Larry Kudlow on TV about a month ago and he also suggested using I-bonds as a means to replace putting money into a savings account. Whether you like Kudlow or not, he has been more right than wrong over the years when speaking about the economy.
> 
> The philosophy of buying bonds is to use money that you think you won’t be needing anytime soon.


DH & I bought the max last November and again this year.  I-bonds limit purchases to $10,000 per person per year.


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## oldman (Jun 12, 2022)

StarSong said:


> DH & I bought the max last November and again this year.  I-bonds limit purchases to $10,000 per person per year.


We had been buying bonds (EE) through work since 1977. You can keep an inventory on your computer using the database through Treasury Direct and then it will also track your interest accumulated. The site works best using either Edge or Firefox browsers.

EE bonds don’t pay much, but it was an easy way to have money taken out of your pay and then when we accumulated so much, we would cash them in and buy bonds that paid a higher return.


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## oldmontana (Jun 12, 2022)

TD Amertrade is paying this on CD's

1 year 2.422%

2 year 3.022%

5 year 3.919 %

Better than the 1% you were talking about


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## oldman (Jun 12, 2022)

Interest rates are supposed to bump up another 1% in the near future, so maybe that will also push returns higher. What do you think?


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## HarryHawk (Jun 12, 2022)

oldman said:


> Interest rates are supposed to bump up another 1% in the near future, so maybe that will also push returns higher. What do you think?


The rate the ibond pays is adjusted every 6 months, so if inflation does go up, the rate your bond pays is adjusted to the higher rate.  Of course it can also go down.


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## Blessed (Jun 12, 2022)

I also have moved part of my investments to cash.  I did that back in April of 2020.  The other account I have left in the market but in the safest low risk area.  In the last two years I have not felt confident to go 100%.

I have a money market account that I can use for emergencies


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## OneEyedDiva (Jun 13, 2022)

As you know MDB, I can't invest in bonds personally, so I don't know anything about I-Bonds. But I have been thinking about what is the best move for those who can and want to avoid stock market volatility so I'll probably learn something new by reading through this thread.


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## StarSong (Jun 13, 2022)

Blessed said:


> I also have moved part of my investments to cash.  I did that back in April of 2020.  The other account I have left in the market but in the safest low risk area.  In the last two years I have not felt confident to go 100%.
> 
> I have a money market account that I can use for emergencies


Same here.


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## JustDave (Jun 13, 2022)

I Bonds sure beat the heck out of savings accounts and CDs.  I just bought a $10,000 dollar I Bond last month.  It's paying 7%.  You can only buy that amount once a year.  Had I waited another month, it would be up around 12% I think.  I have three that I bought back in 2001, and they pay even more.  The best payback is in the stock market long term, but that place drives me nuts.


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## ManjaroKDE (Jun 13, 2022)

>>>>>>


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## JustDave (Jun 13, 2022)

I Bonds at 9.62%.  I don't know where I got it in my head it was at 12.  Maybe they will be by next year.  Back in the 1980s when Paul Volker was raising interest rates to stop inflation, I was in a money market that paid 18% if I remember right.  Then inflation was curbed and my market went down to some paltry payout and I dumped it.  I just looked it up.  It doesn't even exist anymore.


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## Leann (Jun 13, 2022)

JustDave said:


> I Bonds sure beat the heck out of savings accounts and CDs.  I just bought a $10,000 dollar I Bond last month.  It's paying 7%.  You can only buy that amount once a year.  Had I waited another month, it would be up around 12% I think.  I have three that I bought back in 2001, and they pay even more.  The best payback is in the stock market long term, but that place drives me nuts.


I did something similar as you...same bond, same amount, bought it in April. Stock market makes me nuts, too.


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## Leann (Jun 13, 2022)

OneEyedDiva said:


> As you know MDB, I can't invest in bonds personally, so I don't know anything about I-Bonds. But I have been thinking about what is the best move for those who can and want to avoid stock market volatility so I'll probably learn something new by reading through this thread.


Hi @OneEyedDiva. Why can't you invest in bonds?


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## OneEyedDiva (Jun 14, 2022)

Aunt Bea said:


> I'm old fashioned and more than a little bit insecure so I keep my short term money in rock-solid readily available money markets, CDs, etc...
> 
> It's tempting to look for higher returns but I try to go with the old adage that any money you will need in the next five years shouldn't be in the market.
> 
> ...


What math method or app did you use to come up with the total portfolio percentage? _"If ten percent of your portfolio is in cash with an annual return of 1.00% and the other ninety percent of your portfolio is invested in the market returning 7.50% your total portfolio is still returning a respectable 6.85%." _


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## OneEyedDiva (Jun 14, 2022)

Leann said:


> Hi @OneEyedDiva. Why can't you invest in bonds?


Muslims are instructed to stay away from Riba (interest). We are not to pay it or charge it. However, more progressive Muslim scholars who recognize it's almost impossible to avoid interest in todays society say that up to 5% of one's assets is acceptable, but we are advised to purge ourselves of interest we may accrue by donating it to non Islamic entities. During the time of Prophet Muhammad (PBUH) interest was seen as something that made the rich richer and helped keep the poor impoverished, thus was seen as haram (harmful). Sounds like what's going on in modern times doesn't it? We can collect dividends and capital gains, however, since they are seen as income from different sources as interest. For me they are significant enough that getting the paltry rate of interest on my bank savings accounts  (which I wind up purging anyway) doesn't bother me. I had to be mindful when opening up one of my credit union accounts because what they were touting as dividends was really interest.  I opted for an Islamic savings which doesn't pay interest.


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## Aunt Bea (Jun 14, 2022)

OneEyedDiva said:


> What math method or app did you use to come up with the total portfolio percentage? _"If ten percent of your portfolio is in cash with an annual return of 1.00% and the other ninety percent of your portfolio is invested in the market returning 7.50% your total portfolio is still returning a respectable 6.85%." _


 I backed into it.

 10%   $  100,000.00 x  1.00% = $   1,000.00
  90%   $  900,000.00 x 7.50% = $ 67,500.00
100%   $1,000,000.00 x    ?     =  $ 68,500.00

$68,500.00 ÷ $1,000,000.00 = 6.85%


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## OneEyedDiva (Jun 14, 2022)

Aunt Bea said:


> I backed into it.
> 
> 10%   $  100,000.00 x  1.00% = $   1,000.00
> 90%   $  900,000.00 x 7.50% = $ 67,500.00
> ...


Thank you! I will apply your method to my portfolio. I'm good at adding, subtracting, multplying...even some of it in my head, but when I start doing math problems, I get confused.


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## JustDave (Jun 14, 2022)

OneEyedDiva said:


> Muslims are instructed to stay away from Riba (interest). We are not to pay it or charge it. However, more progressive Muslim scholars who recognize it's almost impossible to avoid interest in todays society say that up to 5% of one's assets is acceptable, but we are advised to purge ourselves of interest we may accrue by donating it to non Islamic entities.


Christianity was much the same, but I always thought the instruction was to avoid dealing with criminal elements that break knee caps if you don't pay... that sort of thing.  Money, interest, loans, mortgages, and business are all interrelated, and the major economies in the world run on it to the advantage of both the borrowers and lenders.  I don't want to start a religious debate, but I don't think that rule applies in modern times. But there are individuals that don't borrow or lend, and they get by.  I don't pay interest, and I don't borrow from banks.  Although, I did to get where I am today.  I don't borrow, because I'm financially comfortable, not wealthy, but loans are not something I need at this point in my life, but to guys who understand business and run corporations, borrowing and lending is their life's blood.


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## OneEyedDiva (Jun 14, 2022)

JustDave said:


> Christianity was much the same, but I always thought the instruction was to avoid dealing with criminal elements that break knee caps if you don't pay... that sort of thing.  Money, interest, loans, mortgages, and business are all interrelated, and the major economies in the world run on it to the advantage of both the borrowers and lenders.  I don't want to start a religious debate, but I don't think that rule applies in modern times. But there are individuals that don't borrow or lend, and they get by.  I don't pay interest, and I don't borrow from banks.  Although, I did to get where I am today.  I don't borrow, because I'm financially comfortable, not wealthy, but loans are not something I need at this point in my life, but to guys who understand business and run corporations, borrowing and lending is their life's blood.


As I pointed out, the rule about interest was "updated" a bit but certainly still applies, believe me. There is Islamic literature that explains what is an isn't acceptable. I was Christian for over half my life. I don't remember hearing or reading anything about not paying interest. Even before I accepted Islam, I didn't believe in paying interest or fees. The uber rich will still be uber rich whether you and I pay them extra money or not.


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## JustDave (Jun 14, 2022)

There is a part in the Bible about  usury: The practice of lending money and charging the borrower interest, especially at an exorbitant or illegally high rate, which is not what modern day banking does.  Jesus supposedly overturned tables and threw the money lenders out of the temple, but as my pastor explained to me they were engaging in usury:  as in taking advantage of the misery of others.


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## oldman (Jun 14, 2022)

JustDave said:


> I Bonds sure beat the heck out of savings accounts and CDs.  I just bought a $10,000 dollar I Bond last month.  It's paying 7%.  You can only buy that amount once a year.  Had I waited another month, it would be up around 12% I think.  I have three that I bought back in 2001, and they pay even more.  The best payback is in the stock market long term, but that place drives me nuts.


Are you saying you bought I bonds in 2001 that paid over 7%?


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## JustDave (Jun 14, 2022)

oldman said:


> Are you saying you bought I bonds in 2001 that paid over 7%?


I was guessing based on how much dollar amount of interest I collect on them now.  I may have figured that based on what those bonds are worth today, which is double. In truth, I can't remember what the interest rate was back then.  Do you know what a 2001 I Bond paid?  I'd like to know, just to compare them with today's rate.


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## oldman (Jun 14, 2022)

JustDave said:


> I was guessing based on how much dollar amount of interest I collect on them now.  I may have figured that based on what those bonds are worth today, which is double. In truth, I can't remember what the interest rate was back then.  Do you know what a 2001 I Bond paid?  I'd like to know, just to compare them with today's rate.


I was thinking back then maybe around 2%. But, that’s just a guess. I also bought some of those (what we called back then) Jimmy Carter CDs that paid somewhere around 16-18% interest. My dad was in the Army as a career and he spent half if his check every month buying them. I think he even borrowed against our house to buy them.


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## JustDave (Jun 14, 2022)

oldman said:


> I was thinking back then maybe around 2%. But, that’s just a guess. I also bought some of those (what we called back then) Jimmy Carter CDs that paid somewhere around 16-18% interest. My dad was in the Army as a career and he spent half if his check every month buying them. I think he even borrowed against our house to buy them.


I'm sure they were more than 2%.  I would not have bought them at that rate.  I bought 3 at $10,000 each, because I remember them being a very good deal.  I think maybe $30,000 was a yearly limit, but I'm not sure.   The next year, I went to buy more, and the return was way down, probably at 2%, so I didn't buy another until last month.  I wish I had waited, because I was sure the rate would go up.  I even read that it was likely to go up, but then I read another report that said, "Don't wait.  Buy them now."  By that time, I was sick of thinking about money and betting one way or another, so I just bought what I could.  I'm not what is known as a savvy investor.  I just want to park some money, and forget about it.  I guess I have better things to think about.  My brother in law is good at the stock market (so my sister says, anyway), but I'm not interested.


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## JustDave (Jun 14, 2022)

OK, I just checked those Bonds.  I bought them in 2003, not 2001.


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## Oldguy (Jun 14, 2022)

May to Oct 2003, I bonds were 4.66% (1.1% fixed rate)


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## Leann (Jun 14, 2022)

OneEyedDiva said:


> Muslims are instructed to stay away from Riba (interest). We are not to pay it or charge it. However, more progressive Muslim scholars who recognize it's almost impossible to avoid interest in todays society say that up to 5% of one's assets is acceptable, but we are advised to purge ourselves of interest we may accrue by donating it to non Islamic entities. During the time of Prophet Muhammad (PBUH) interest was seen as something that made the rich richer and helped keep the poor impoverished, thus was seen as haram (harmful). Sounds like what's going on in modern times doesn't it? We can collect dividends and capital gains, however, since they are seen as income from different sources as interest. For me they are significant enough that getting the paltry rate of interest on my bank savings accounts  (which I wind up purging anyway) doesn't bother me. I had to be mindful when opening up one of my credit union accounts because what they were touting as dividends was really interest.  I opted for an Islamic savings which doesn't pay interest.


Thank you so much for explaining this, @OneEyedDiva.


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## HarryHawk (Jun 16, 2022)

StarSong said:


> DH & I bought the max last November and again this year.  I-bonds limit purchases to $10,000 per person per year.


You can buy a bond as a gift, to be presented at a later time of you choosing.  The gift bond goes into a "gift box" until it is presented.  While in the gift box, it earns interest just like any other similar bond.

Nothing precludes you and your spouse from buying gift bonds for each other.  If your spouse has already purchased an iBond this year, you can't present your gift bond this year, but you can present it in future years.


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## Liberty (Jun 16, 2022)

Problem with these bonds is you can only buy a small amount of them each year.  Thinking next year CD rates will be a good buy. Hey, its a set up similar to the 80's and CD's were 17-18% for like 20 minutes back then.
Sigh...for right now, just sticking to the good dividend growth funds at 3-1/2% is where its at I guess.


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## StarSong (Jun 16, 2022)

HarryHawk said:


> You can buy a bond as a gift, to be presented at a later time of you choosing.  The gift bond goes into a "gift box" until it is presented.  While in the gift box, it earns interest just like any other similar bond.
> *
> Nothing precludes you and your spouse from buying gift bonds for each other.  If your spouse has already purchased an iBond this year, you can't present your gift bond this year, but you can present it in future years.*


Thanks for the tip.  I found these very helpful websites on that subject:
https://seekingalpha.com/article/45...-to-double-down-on-current-8-53-percent-yield
https://thefinancebuff.com/buy-i-bonds-as-gift.html


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## Chet (Jun 16, 2022)

JustDave said:


> I'm sure they were more than 2%.  I would not have bought them at that rate. * I bought 3 at $10,000 each,* because I remember them being a very good deal.  I think maybe $30,000 was a yearly limit, but I'm not sure.   The next year, I went to buy more, and the return was way down, probably at 2%, so I didn't buy another until last month.  I wish I had waited, because I was sure the rate would go up.  I even read that it was likely to go up, but then I read another report that said, "Don't wait.  Buy them now."  By that time, I was sick of thinking about money and betting one way or another, so I just bought what I could.  I'm not what is known as a savvy investor.  I just want to park some money, and forget about it.  I guess I have better things to think about.  My brother in law is good at the stock market (so my sister says, anyway), but I'm not interested.


If you go to cash one, you will pay tax on the interest of $10,000 all at once, but if you bought bonds in $1,000 increments, you could cash them a little at a time as needed, and pay less tax for that year and possibly stay in a lower bracket.


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## carouselsilver (Jun 16, 2022)

Myquest55 said:


> StarSong - I saw that note about I-bonds.  You buy in at the face value and they earn interest.  They are 30 year bonds and you have to hold them for at least 5 years before you can cash them without a penalty.  Still, I thought I could spare some $$ for one or two.  (The minimum amount is $25)
> 
> I looked into opening a Treasury Direct Account so I could buy one but their set up was INSANE! They wanted so much information as well as passwords, secret photos, captions, etc.....I just closed the window and backed away. Gone are the days you could buy a bond at a bank. Sigh.


I opened an account with them and arranged for monthly payments to be automatically deposited. Well, I have had to give up on the whole shebang. First of all, I noticed that the first payment never went through, and then the nightmare started. They have hellish wait times if you telephone them, and many times will tell you that they are not going to answer the phone at all. Emails are the same. They will only accept an email from you if you are signed into your account, and God help you if you misspell your password and you get locked out; good luck ever getting back in with the extremely awful interface of their website and their hold times.

After a forty five minute hold time, I was finally able to reach a human, and was told that I should have entered all those zeros in front of the routing number. But now I can't get hold of anyone to correct it, I have had to give up on it. For laughs, the recording that plays while you are hold encourages you to please visit their updated and streamlined website. I really wish I could find that website!


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## JustDave (Jun 16, 2022)

Myquest55 said:


> I looked into opening a Treasury Direct Account so I could buy one but their set up was INSANE! They wanted so much information as well as passwords, secret photos, captions, etc.....I just closed the window and backed away. Gone are the days you could buy a bond at a bank. Sigh.


Yes, I believe it's the least user friendly procedure I've ever encountered.  I finally, got to a point where I had an account, but I was unable to access it.  For some reason they needed some notorized (actually it was one step above notorized) statement from my bank, which the bank then had to deal with and  required a lot of phone calls from my bank to their head bank.  Just for them to figure out how to fill out Treasury Direct's form took nothing less than 45 minutes.  I was on the phone all the time while the bank was figuring it out.  And then this had to be mailed in.  After all that, it took two weeks for Treasury Direct to OK it.  Apparently, the last part with the bank was not always necessary as Treasury Direct actually appologized because this last glitch doesn't always happen.  Why me?  I have no idea.

Now I'm good to go, at least until the next snag comes along.  Twenty years ago, you could just go down to any bank and buy an I Bond, which took less than 10 minutes.  I understand you can still cash them it at a bank.  But I don't know how this is done, because you no longer hold a paper bond that you can take to the bank and trade for cash.  I assume the bank accesses your account to verify the bond, but if it takes them 45 minutes of phone calls, and another 30 minutes to do the paperwork, they won't be too happy about it.


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## Brookswood (Jun 29, 2022)

OneEyedDiva said:


> As you know MDB, I can't invest in bonds personally, so I don't know anything about I-Bonds. But I have been thinking about what is the best move for those who can and want to avoid stock market volatility so I'll probably learn something new by reading through this thread.


I don't get it. How can somebody named "One Eyed Diva" not invest in Eye-bonds????


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## Brookswood (Jun 29, 2022)

JustDave said:


> Y
> 
> But I don't know how this is done, because you no longer hold a paper bond that you can take to the bank and trade for cash.


FWIW, I bought a few I-bonds earlier this year when I directed the IRS to refund my tax over withholding in I-bonds. They ended up sending me four (4) traditional paper bonds.    I could keep them locked up. But, instead I sent them to the Treasury where they were converted to electronic form and stored in my TD account. So far so good.

From what I have heard many banks choose not to redeem I-bonds anymore.    Has anybody tried to redeem a US savings bond (E or I) at a bank and been told the bank won't redeem it?

What may kill I-bonds is the lousy service from the Treasury. A friend somehow got locked out of his account. He waited for nearly three hours on  the phone until his call was answered and he could get his account unlocked.   That kind of service would kill an ordinary bank or investment firm.


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## JustDave (Jun 29, 2022)

The people at the two banks I have asked about cashing I Bonds, said they would accept them.  Whether that applied to both paper and electronic, I don't know.  I didn't even know they don't sell the paper ones anymore.


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## Patricia (Jun 29, 2022)

Pecos said:


> I have a fairly large pot of money currently parked in a CD that is paying 3%. I am planning to use that money to move to Washington within a couple of years and I want to be absolutely sure that it will be there went we make our move.
> 
> Unfortunately, my CD is maturing in the next few weeks and the best interest rates I can find are about 1% or less and carry longer terms than I want. U.S. Government I bonds, which will pay slightly more, are starting to look like my best alternative for at least part of these funds. I will be limited to $10K each calendar year, and can park another $10K in an account for my wife. We can move another $20K into I bonds next year.
> 
> ...


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## Patricia (Jun 29, 2022)

StarSong said:


> DH & I bought the max last November and again this year.  I-bonds limit purchases to $10,000 per person per year.


One per year is what I was told too, but I never confirmed, so it seems the info is correct.


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## Brookswood (Jun 29, 2022)

Patricia said:


> A finanacial advisor said you can only buy one government bond per year, but I didn't confirm that information.


I doubt if that is true.   I have bought multiple I-bonds this year. But, I was not able to buy  a total of more than $10,000 dollars.


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## Patricia (Jun 29, 2022)

Brookswood said:


> I doubt if that is true.   I have bought multiple I-bonds this year. But, I was not able to buy  a total of more than $10,000 dollars.


Yes, I think he said $10,000 max. So glad you pointed that out.


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## Patricia (Jun 30, 2022)

Patricia said:


> Yes, I think he said $10,000 max per year. So glad you pointed that out. Is there an advantage of buying multiple bonds up to $10,000 instead of one for $10,000?


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## JustDave (Jun 30, 2022)

You can buy 10k bond a year.  Your wife can also buy 1.  You can buy a gift bond (including one to your wife and she to you).  I think you can buy more through other loopholes, but it's a pain.  The Treasury Direct website was not user friendly, not my fault.  It's glitchy, and they admit that.  I had to jump through hoops and do foot work off site.  They said I was a special case, but there is nothing special about me.  Believe me.  I'm just a regular person.  Having said that, I like I Bonds when they are paying well, which they currently are.  I own 3.  I cashed one in once at my bank, and it was easy as pie.  But I've heard it's not as easy anymore.  I wouldn't worry about losing money on an I Bond though.  No one has ever lost any money in I Bonds.


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## StarSong (Jun 30, 2022)

Turns out you can buy an additional $10K bond per annum if you happen to have a trust.  (I tried it and was successful.) 

There's also a way to buy a $5K paper I bond if you overpay your income taxes, but I'm fuzzy on how that works for people who are married and file jointly.  Will figure it out before the end of the year.

There's info on the internet about buying gift bonds.


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## JustDave (Jun 30, 2022)

I suppose if you just need to get your hands on $5000, you could cash one in and still have $5000 drawing interest.  @Patricia I never thought about this until you asked the question.  I don't think there is an advantage of owning one $10k rather than two $5k, except you have less stuff to think about it, maybe.


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## JustDave (Jun 30, 2022)

StarSong said:


> Turns out you can buy an additional $10K bond per annum if you happen to have a trust.  (I tried it and was successful.)


How hard is it to set up a trust?  Does it require a lawyer?


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## StarSong (Jun 30, 2022)

JustDave said:


> How hard is it to set up a trust?  Does it require a lawyer?


Ours required a lawyer.  We set it up when our children were quite young and updated it several years ago.  The main advantage to a trust is that it prevents an estate from having to be probated and saves on various taxes.


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## JustDave (Jun 30, 2022)

My aunt put her house in a trust for me.  She died years ago, but it seemed like a good way to set up an inheritance.  My sister got bonds and other things, and she had to wait for probate and pay taxes.  But my aunts house became mine the day she died.  A lawyer handled her estate as a pro bono service, but she consulted me on most issues.  My aunt was a lawyer, and she did a lot of pro bono work, so her lawyer just handled everything at no charge.  Not sure why.  Maybe lawyers do that for each other.


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## Patricia (Jun 30, 2022)

JustDave said:


> I suppose if you just need to get your hands on $5000, you could cash one in and still have $5000 drawing interest.  @Patricia I never thought about this until you asked the question.  I don't think there is an advantage of owning one $10k rather than two $5k, except you have less stuff to think about it, maybe.


Yes, that makes sense.


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## Brookswood (Jul 2, 2022)

You can cash in just part of a bond held electronically. I copied below from the TD website.
https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iredeem.htm


*Electronic bonds in TreasuryDirect*You can cash a minimum of $25 or any amount above that in 1-cent increments.  If you cash only a portion of the bond's value, you must leave at least $25 in the TreasuryDirect account.  Redemptions are comprised of principal and interest. (In a partial redemption, we pay interest only on the partial amount you cash.)


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## Alligatorob (Aug 28, 2022)

My wife and I just purchased our first I bonds.  One thing I noticed was nothing asking for a beneficiary.  What happens to these when someone dies?


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## JustDave (Aug 28, 2022)

My sister inherited some proceeds from bonds from an aunt.  They were not I Bonds, but I don't think that makes a difference  There were several bonds split between two nieces.  Neither were mentioned as beneficiaries in the bond records.  After probate, the bonds were cashed and money was distributed to the two nieces according to the aunt's will.  I think this is how it works.  If you have a stash of money and you want someone to inherit it, that would be taken care of in the will.


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## Pecos (Aug 28, 2022)

Alligatorob said:


> My wife and I just purchased our first I bonds.  One thing I noticed was nothing asking for a beneficiary.  What happens to these when someone dies?


There is a way, but they do not make it easy to find. I seems to me that I could not name the beneficiary until the second day when I went back.


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## Alligatorob (Aug 28, 2022)

Pecos said:


> There is a way, but they do not make it easy to find. I seems to me that I could not name the beneficiary until the second day when I went back.


Thanks, I will look for that.  Any thing you can remember about how you found it?


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## Pecos (Aug 28, 2022)

Alligatorob said:


> Thanks, I will look for that.  Any thing you can remember about how you found it?


As it turns out, I printed out a copy of the instructions. @Alligatorob


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## Pecos (Aug 28, 2022)

Pecos said:


> As it turns out, I printed out a copy of the instructions. @Alligatorob


Crap, my scan is simply not dark enough. I am going to type it in:

You can edit securities being held in Current Holdings

To add a secondary owner or beneficiary to your securities registered in single ownership form:

- Log into your primary TreasuryDirect account
- Click the ManageDirect tab at the top of the page.
- Under the heading Manage My Securities click "Edit" a registration.
- On the Edit Security Registration page, choose the security type you want to edit and click "select."
- On the summary page, choose the security or securities you wish to edit and click "select."
- On the Detail page, select the registration containing the secondary owner or beneficiary. (If you have never created the registration, you can do so by clicking "Add New Registration". Once you have created the registration, the system will bring you back to the Detail page where you will find the new registration listed in the drop-down box.) Note: Entity accounts may only have one registration. All securities in an entity account carry a registration identical to the entity account name.
- Once you have selected the desired registration, click "submit" to complete the change in registration for the security.

Trust me, once you have done this and worked you way through the government verbiage, it will be much easier, please don't give up. The "govie" who wrote this needs to go back to freshman English.


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## Alligatorob (Aug 28, 2022)

Pecos said:


> You can edit securities being held in Current Holdings
> 
> To add a secondary owner or beneficiary to your securities registered in single ownership form:


Thanks Pecos, I'll do it!


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## Teacher Terry (Aug 28, 2022)

I bought one last year and one this year.


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## StarSong (Aug 29, 2022)

Am thinking about buying I bond future gifts for DH and having him buy some for me.


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## OneEyedDiva (Aug 29, 2022)

Leann said:


> Thank you so much for explaining this, @OneEyedDiva.


You're welcome, of course.


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## HarryHawk (Aug 30, 2022)

T-Bills are current paying mid 3% for 6 month maturity dates.  They are actually safer than money in a bank.  If the government were to default on things like t-bills. that would be the least of your worries.


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## Leann (Aug 30, 2022)

Pecos said:


> Crap, my scan is simply not dark enough. I am going to type it in:
> 
> You can edit securities being held in Current Holdings
> 
> ...


Thank you SO much for posting this. I would have *never* found it.


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## Alligatorob (Aug 30, 2022)

Pecos said:


> To add a secondary owner or beneficiary to your securities registered in single ownership form:
> 
> - Log into your primary TreasuryDirect account
> - Click the ManageDirect tab at the top of the page.
> ...


Thanks @Pecos I just did it, exactly as you said.  *It worked!*  Would have taken me many frustrating hours without your help.


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## ManjaroKDE (Sep 5, 2022)

Signed up yesterday, today made my first I-Bond  purchase and is scheduled for the 6th.  Yes, the instructions were a little confusing but fumbling along it appears to be a successful journey.  Lots of hoops as mentioned but it was easier than I thought.  Not sure if I want to try explaining the process to my non-tech wife.  This is probably where my engineer grandson will help.  Next will tackle setting up my beneficiary.  Have to wait until the deposit posts whenever, link is inactive until then.

Added:  I will see tomorrow whether TreasuryDirect.com plays nice with Linux after the fiasco encountered with the 'Goldman Sachs' /Marcus event.


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## mathjak107 (Sep 10, 2022)

OneEyedDiva said:


> Muslims are instructed to stay away from Riba (interest). We are not to pay it or charge it. However, more progressive Muslim scholars who recognize it's almost impossible to avoid interest in todays society say that up to 5% of one's assets is acceptable, but we are advised to purge ourselves of interest we may accrue by donating it to non Islamic entities. During the time of Prophet Muhammad (PBUH) interest was seen as something that made the rich richer and helped keep the poor impoverished, thus was seen as haram (harmful). Sounds like what's going on in modern times doesn't it? We can collect dividends and capital gains, however, since they are seen as income from different sources as interest. For me they are significant enough that getting the paltry rate of interest on my bank savings accounts  (which I wind up purging anyway) doesn't bother me. I had to be mindful when opening up one of my credit union accounts because what they were touting as dividends was really interest.  I opted for an Islamic savings which doesn't pay interest.


if the payout is met with an equal drop in investment value , that would be a dividend .

they   come from the company cash register regardless of profits or not . just an amount of your own money refunded to you by the board so not a problem .

if the payout is on top of your existing balance with no subtraction then that would be interest ..

interest comes from loans . 

bond etfs  can be tricky since they add each days interest on its holdings in to the share price and when paid out most bond funds see a decrease by the same amount but that is still interest.

many bond mutual funds hold your interest on the side , they don’t reflect it in the days nav and so when paid there is no subtraction from share price .

it can be a bit confusing at times


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## OneEyedDiva (Sep 10, 2022)

Alligatorob said:


> Thanks, I will look for that.  Any thing you can remember about how you found it?


If a way to name a beneficiary had not been not provided, couldn't that designation be covered in your will? @Pecos


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## mathjak107 (Sep 11, 2022)

OneEyedDiva said:


> If a way to name a beneficiary had not been not provided, couldn't that designation be covered in your will? @Pecos


It would have to go through probate normally before released ..


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## Liberty (Sep 11, 2022)

mathjak107 said:


> It would have to go through probate normally before released ..


*Savings bonds can be transferred to new owners without probate if they were jointly owned or if the owner named a payable-on-death (POD) beneficiary to inherit them*. These bonds can be jointly owned, or they can be registered in POD form, but not both; only sole owners can designate a POD beneficiary.

How To Transfer U.S. Savings Bonds After Death - AllLaw​


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## mathjak107 (Sep 11, 2022)

Liberty said:


> *Savings bonds can be transferred to new owners without probate if they were jointly owned or if the owner named a payable-on-death (POD) beneficiary to inherit them*. These bonds can be jointly owned, or they can be registered in POD form, but not both; only sole owners can designate a POD beneficiary.
> How To Transfer U.S. Savings Bonds After Death - AllLaw​


Then they wouldn’t be passed via will which was what one eyed diva asked about .

we pulled all money out of vanguard when they stopped allowing beneficiaries  on joint accounts .

they told all of us we would be better off with a trust .

nonsense we don’t need a trust , all our accounts are on beneficiary except vanguard after they pulled their little stunt .

no problem at fidelity with beneficiaries on joint accounts


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## OneEyedDiva (Sep 11, 2022)

mathjak107 said:


> if the payout is met with an equal drop in investment value , that would be a dividend .
> 
> they   come from the company cash register regardless of profits or not . just an amount of your own money refunded to you by the board so not a problem .
> 
> ...


_"it can be a bit confusing at times"._ Yes it can. I'm not concerned about bond mutual funds since I will never invest in them, but thank you for the exclamation.


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## Pecos (Sep 11, 2022)

OneEyedDiva said:


> If a way to name a beneficiary had not been not provided, couldn't that designation be covered in your will? @Pecos


It might be possible, but like an IRA, it is just so much easier for an heir if they are named as a beneficiary ahead of time.


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## OneEyedDiva (Sep 11, 2022)

Pecos said:


> It might be possible, but like an IRA, it is just so much easier for an heir if they are named as a beneficiary ahead of time.


Yes, I figured as much. Investments at my brokerages are not included 
 in my will,  but are listed with the brokerages for each account.  Although each of my bank accounts have designated PODs (orTODs) beneficiaries for those are listed in my will.


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