How To Redeem I-Bonds (Step-By-Step) To Buy New Ones At The Current 1.3% Fixed Rate
ฝัง
- เผยแพร่เมื่อ 17 ก.ค. 2024
- It's the last month to buy I-Bonds at the highest fixed rate in 16 years. Learn more about how to redeem your I-Bonds at lower (or no) fixed rate to buy new I-Bonds at the 1.3% current fixed rate (for all I-Bonds issued on or before 4/30/2024)!
📢 We've launched! Get 15% off our brand-new bond courses thru 11:59PM ET on 4/30/2024 for Financial Literacy Month - enter coupon code bondfans2024 at checkout - see links below for more details!
⭐ Bond Beginners (our foundational-level bond course): www.diamondnestegg.com/bond-beginners
⭐ Bond Masters (our intermediate-level bond course): www.diamondnestegg.com/bond-masters
⭐ Or get both & save $100: www.diamondnestegg.com/home#_...
⭐ Join our super-supersaver membership for regular market updates & monthly live member Q&As 👉 / @diamondnestegg
#jenniferlammer #bondbeginners #bondmasters
-------
WATCH NEXT:
I-Bond Tax Withholding: • Four I-Bond To-Dos Bef...
How To Buy I-Bonds: • How To Buy An I Bond: ...
_________
SOURCES
www.treasurydirect.gov/saving...
_________
DISCLAIMER
EVERYONE'S FINANCIAL JOURNEY IS DIFFERENT. YOUR PERSONAL FINANCIAL SITUATION IS UNIQUE. NEITHER DIAMOND NESTEGG, LLC, OUR WEBSITE, OUR TH-cam CHANNEL, OUR OTHER SOCIAL MEDIA CHANNELS, NOR THIS CONTENT & INFORMATION (THE “SERVICE”) ARE INTENDED TO PROVIDE FINANCIAL, LEGAL, TAX OR OTHER ADVICE. NO FINANCIAL DECISIONS SHOULD BE MADE SOLELY BASED ON THE SERVICE. THE SERVICE IS PROVIDED FOR INFORMATIONAL & ENTERTAINMENT PURPOSES ONLY & IS NOT INTENDED TO BE A SUBSTITUTE FOR ADVICE FROM A PROFESSIONAL FINANCIAL ADVISER OR QUALIFIED EXPERT.
ALL OPINIONS & FORWARD-LOOKING STATEMENTS OF THE SERVICE EXPRESSED HEREIN ARE AS OF THE DATE OF PUBLICATION & SUBJECT TO CHANGE. IT IS YOUR RESPONSIBILITY TO VERIFY ALL INFORMATION YOURSELF.
ANY INFORMATION PRESENTED BY THE SERVICE IS NOT AN OFFER TO BUY OR SELL, NOR A SOLICITATION TO BUY OR SELL ANY SECURITIES OR PRODUCTS MENTIONED. DIFFERENT INVESTMENTS HAVE VARYING DEGREES OF RISK & THERE IS NO ASSURANCE THAT THEY WILL BE SUITABLE FOR YOUR PORTFOLIO. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. ALWAYS CONSULT A QUALIFIED FINANCIAL, LEGAL, OR TAX PROFESSIONAL REGARDING YOUR SPECIFIC SITUATION.
DIAMOND NESTEGG, LLC IS A REGISTERED INVESTMENT ADVISER IN THE STATE OF NEW YORK AND OTHER STATES WHERE IT IS EXCLUDED OR EXEMPTED FROM REGISTRATION REQUIREMENTS. REGISTRATION AS AN INVESTMENT ADVISER DOES NOT CONSTITUTE AN ENDORSEMENT FROM SECURITIES REGULATORS.
DIAMOND NESTEGG, LLC RECEIVES COMPENSATION FROM TH-cam FOR THE PRESENCE OF ADVERTISING BEFORE, AFTER, AND DURING THIS VIDEO CONTENT AS WELL AS VIA TH-cam’S SUPER THANKS & MEMBERSHIP FEATURE. DIAMOND NESTEGG, LLC DOES NOT CONTROL THE CONTENT OR PRESENCE OF ANY ADVERTISEMENTS. THE PRESENCE OF ANY ADVERTISEMENT DOES NOT CONSTITUTE AN ENDORSEMENT OF THE AD, COMPANY, ENTITY, OR PRODUCT BY DIAMOND NESTEGG, LLC.
----------
CONTENT DISCLAIMER
THE VIEWS & OPINIONS EXPRESSED THROUGH THE SERVICE ARE SOLELY THOSE OF DIAMOND NESTEGG, UNLESS OTHERWISE SPECIFICALLY CITED. MATERIAL PRESENTED IS BELIEVED TO BE FROM RELIABLE SOURCES & NO REPRESENTATIONS ARE MADE BY DIAMOND NESTEGG AS TO OTHER PARTIES' INFORMATIONAL ACCURACY OR COMPLETENESS. ALL INFORMATION OR IDEAS PROVIDED SHOULD BE DISCUSSED IN DETAIL WITH A QUALIFIED ADVISER, TAX OR LEGAL PROFESSIONAL PRIOR TO IMPLEMENTATION.
OUR TH-cam CHANNEL MAY PROVIDE LINKS TO THIRD-PARTY WEBSITES FOR YOUR CONVENIENCE. WE HAVE NO CONTROL OVER THE ACCURACY OR CONTENT OF THESE LINKS.
THE COMMENTS ON THIS CHANNEL, AND OUR OTHER SOCIAL MEDIA CHANNELS, ARE THOSE OF THE CREATORS & DO NOT NECESSARILY REFLECT THE VIEWS & OPINIONS HELD BY DIAMOND NESTEGG, LLC.
COMMENTS, CHATS & CONVERSATIONS ARE A SPACE FOR CIVIL & RESPECTFUL DISCOURSE & CONSTRUCTIVE EXCHANGES OF INFORMATION, VIEWPOINTS & OPINIONS. WE WELCOME FREE EXPRESSION, REGARDLESS OF VIEWPOINT, BUT RESERVE THE RIGHT TO REMOVE ANY RESPONSE AND SUSPEND OR BAN INDIVIDUALS FOR ANY REASON. PLEASE NOTE THAT COMMENTS, CHATS & CONVERSATIONS MAY BE SUBJECT TO PREAPPROVAL.
DUE TO THE SOCIAL NATURE OF THE SERVICE, THESE VIDEOS MAY CONTAIN CONTENT COPYRIGHTED BY ANOTHER PERSON OR ENTITY. DIAMOND NESTEGG, LLC CLAIMS NO COPYRIGHT TO SAID CONTENT & CANNOT BE HELD ACCOUNTABLE FOR THE COPYRIGHTED CONTENT. DIAMOND NESTEGG SHARES & STRIVES TO VERIFY INFORMATION BUT CANNOT WARRANT THE ACCURACY OF COPYRIGHTS OR COMPLETENESS OF THE INFORMATION ON OUR SERVICE. ANY COPYRIGHTED MATERIAL SHARED ON THIS SERVICE IS INTENDED TO BE SHARED BY FAIR USE. IF YOU HAVE A COMPLAINT ABOUT THE USE OF COPYRIGHTED MATERIAL, PLEASE CONTACT DIAMOND NESTEGG PRIOR TO MAKING A COPYRIGHT CLAIM. ANY INFRINGEMENT IS UNINTENTIONAL & WILL BE RECTIFIED TO ALL PARTIES' SATISFACTION.
PLEASE REFER TO OUR TERMS OF SERVICE & PRIVACY POLICY LINKS FROM OUR WEBSITE FOR MORE INFORMATION.
📢 Get 15% off our brand-new bond courses thru 11:59PM ET on 4/30/2024 for Financial Literacy Month - enter coupon code bondfans2024 at checkout - see links below for more details!
Bond Beginners (our foundational-level bond course): www.diamondnestegg.com/bond-beginners
Bond Masters (our intermediate-level bond course): www.diamondnestegg.com/bond-masters
Or get both & save $100: www.diamondnestegg.com/home#_paa2isucf
👉Join our super-supersaver membership for regular market updates & monthly live member Q&As th-cam.com/channels/nexoc6tvesvcCEzZhmI-Ag.htmljoin
>>>>>>>>>>
WATCH NEXT
Our Bond Courses vs TH-cam Membership | Which Is Right For You: th-cam.com/video/H5h4Eyh0hjo/w-d-xo.html
Bond Beginners Course Sneak Peak | I-Bonds vs TIPS: th-cam.com/video/uXPzbje1g2E/w-d-xo.html
Bond Masters Course Sneak Peak | How To Build A Bond Ladder: th-cam.com/video/p90IDmXn19s/w-d-xo.html
>>>>>>>>>>
Here is the overview for Bond Beginners:
1. Bond Basics
What A Bond Is & How A Bond Works
Why Invest In Bonds
New Issue vs Secondary Market Bonds
Interest Rates & Bond Prices
Current Yield & Yield To Maturity
Always Remember This!
Buying At Par, Above Par & Below Par
Different Types Of Bonds
Wrap-Up
2. The Risks Of Bond Investing
Seven Key Bond Risks
Credit Risk
Interest Rate Risk
Reinvestment Risk/Call Risk
Inflation Risk
Liquidity Risk
Currency Risk & Country Risk
Bond Risk Mitigation Strategies
Wrap-Up
3. US Treasuries Overview
What Are US Treasuries
Why Invest In Treasuries
Where Can You Buy Treasuries
How Are Treasuries Taxed
Wrap-Up
4. Treasury Bills
What Are Treasury Bills (T-Bills)
When Do T-Bill Auctions Happen
Where Should You Buy At Auction
Auto-Roll When Buying At Auction
Where To Find Recent Auction Results
High Rate vs Investment Rate
Reopening Auctions
Cash Management Bills (CMBs)
Buying & Selling On Secondary Market
Wrap-Up
5. Treasury Notes & Bonds
What Are Treasury Notes & Bonds
When Do Auctions Happen
Buying Treasury Notes & Bonds
Auction High Yield vs Interest Rate
Floating Rate Notes (FRNs)
Treasury Zeros (STRIPS)
Wrap-Up
6. TIPS (Inflation-Protected)
What Are TIPS
When Do TIPS Auctions Happen
Nominal vs Real Yields
Negative Yields
How Do You Adjust TIPS For Inflation
Taxes On Phantom Income
Secondary Market Liquidity
Wrap-Up
7. I-Bonds (Inflation-Protected)
What Are I-Bonds
How Does I-Bond Interest Work
I-Bonds vs TIPS
The Annual I-Bond Limit
Wrap-Up
8. Agency Bonds
The Universe Of Bonds
What Are Agency Bonds
How Are Agency Bonds Taxed
Treasuries vs Agencies
Who Might Want To Consider Agencies
Yield-To-Call & Yield-To-Worst
Where Can You Buy Agency Bonds
Wrap-Up
9. Municipal Bonds
Our Bond Universe Gets More Complex
What Are Municipal Bonds
How Safe Are Munis
How Are Munis Taxed
The De Minimis Rule
Social Security & Medicare Premiums
Treasuries, Agencies & Munis
Who Might Want To Consider Munis
Wrap-Up
10. Corporate Bonds
Our Bond Universe Is Complete
What Are Corporate Bonds
How Safe Are Corporates
Corporate Bond Hierarchies
Five Key Features Of Corporate Bonds
How Are Corporates Taxed
Treasuries vs Corporates, Etc.
Who Might Want To Buy Corporates
Wrap-Up
>>>>>>>>>>
Here is the overview for Bond Masters:
1. Stocks vs Bonds
Historical Performance
Are Bonds Really Less Volatile
Why Invest In Bonds
Accumulation vs Decumulation
Allocation of Stocks vs Bonds
Wrap-Up
2. Which Bonds Might Be Right For You
Treasuries & Other Types of Bonds
Nominal vs Real Yields
Inflation vs Non-Inflation-Protected
Taxable vs Tax-Advantaged Accounts
Wrap-Up
3. Bond Ladders & Other Bond Strategies
Normal vs Inverted Yield Curve
What Is A Bond Ladder
5 Important Bond Laddering Questions
Laddering When Rates Are Rising
Laddering When Rates Are Falling
Laddering When Rates Are Uncertain
What Is A Bullet
What Is A Barbell
Wrap-Up
4. Holding to Maturity vs Selling Early
Why Hold to Maturity
When To Sell Early Before Maturity
Tax Implications Of Selling Early
Wrap-Up
5. Individual Bonds, Bond Funds, Etc.
Why Buy Individual Bonds
Why Buy Bond Funds
Bond Fund Considerations
Key Bond Fund Concepts
CDs vs Treasuries
Other High-Yield Investments
Wrap-Up
6. Our B.E.S.T. Model Portfolios By Age
Our B.E.S.T Model Portfolios By Age
Model Portfolios In The Industry
B.E.S.T Model Portfolio Difference
How Much Do You Need To Retire?
How I Use The Rules of 100, 110, & 120
B.E.S.T Model Portfolios (20s)
B.E.S.T Model Portfolios (30s & 40s)
B.E.S.T Model Portfolios (50s & 60s)
B.E.S.T Model Portfolios (70s+)
Wrap-Up
7. The Decumulation Phase
What Is The Decumulation Phase?
Bear Markets & Recessions
What Can You Do In Bad/Bear Markets
Decumulation Tax Considerations
The 4% Rule
The Bucket Strategy
The Flooring Approach
Jen’s Bucket Strategy With A Twist
Wrap-Up
>>>>>>>>>>
Thanks for visiting our personal finance channel! We hope this content will help fast-track your financial journey! Everyone's financial journey is different. Please note that: 1) there are questions/ comments which I will not be able to answer without fully understanding your financial, personal & other circumstances & 2) we will not ask you to call us or send us money in the comments on this channel or any of our other social media accounts, so if you see comment(s) along those lines, it is most likely spam - PLEASE DO NOT ENGAGE WITH SPAMMERS OR GIVE OUT YOUR PERSONAL INFORMATION FOR YOUR OWN SAFETY.
Welcome back !
I appreciate your program. I took your advice two years ago and bought $10,000 in I bond, I'm planning on redeeming and then rebuying. I made $1,100 profit which will pay for part of my vacation to Europe. I am 70, do believe that I bonds are great for older people. Because of the ease of the process of removing your Bond money to my checking account within 2 working days . Good for emergency
Great info! Thanks for sharing!
Well come back, thank you for all you are do ,without you people like me will never know information like that❤❤ .
Missed you so much. Thanks for the timely video. I remember your prior video where you explained how the higher interest offset the early withdrawal penalty. Going for it!
As always, your video is so concise and organized. It goes a LONG way to making me comfortable with these processes. Thank you!!
11:02 Love the way Jennifer answers my anticipated question after she shows you an I Bond procedure.
Jennifer, thank you.
Great info. I didn’t realize that interest was paid from the beginning of the purchase month and didn’t know that you lost interest for the month of redemption. Thank you!
Thanks for your valuable insights and guidance. This is the type of stuff that's not taught in grade schools but should be!
Looking forward to next video!
Excellent, informative video! Thank you.
You may have referred to this issue in the podcast, so please forgive me if you did: If you already bought $10,000 worth of iBonds in 2024, you can not sell an older iBond and use the proceeds to buy a new one. I called TD and verified this with them. You can only do your suggested switcharoo if you have not bought any iBonds and n 2024, or if you have bought for less than $10,000, you can do it for the difference.
Just redeemed mine today and I had the exact same earn interest as you. Looking to move the money to T-Bill instead. Thanks again for the i-Bond education, it is really helpful.
Thanks!
I just redeemed by I bonds and it was easy peasy thanks to your awesome video!! I will re-invest them in a few weeks again to get the 1.3% fixed rate Thank-you!
Nicely Done! Very informative & educational Thank you 🎊
You should have a million subscribers ...
Another excellent video as always Jennifer. I would consider the I*Bonds if the limit wasn't $10k.
I redeemed some earlier this year, but because I bought $7000 already this year, I’m waiting tot see where the fixed rate goes in May.
I thought my TH-cam suggestions was broken and thought about your channel over the past couple of months.
TIPS returns are affected by future inflation, while the return on I Bonds is initially part on past inflation. That is why the fixed rate is set (in part) to simple generate more or less interest in I Bonds.
Hi Jennifer, thanks! I already did this in March. However I have more IBonds getting the 3.94% and might redeem them for better yielding Money Market or T-Bill rates. Thoughts? Or maybe I can do a gift purchase with my spouse. I might need these funds in the next 2-3 years though, so probably would not get more Ibonds.
Funny, i just did this earlier today. I sent the money to the C&I account instead of my bank. Will be buying the new iBonds later this week.
Why will you be buying I-Bonds now (for 2024) instead of either already have done the limit back in Jan. or wait for the new rate in May?
@@lotoex For me it was easy, I forgot about them until Jennifer came back online and did a video 🤣 cashed out April 1. Ff course I will wait till Jennifer give an update to her best guess on May 2024 numbers, looking forward to her next informative video.
@@lotoex I’ll be buying a new set of iBonds. I won’t be waiting until May since the new rate could be lower.
Best to redeem to c2i and not bank account for repurchase - you don’t need to wait 2 days
Jen, I have to admit I’m asleep at the wheel .I checked my Ibonds . 20k at 3.94 and 20k at 4.35.Cashing them in May 1st.
I just answered your rate comparison question in the member-zone
I did this myself in February. We’ll see what the new fixed rate looks like in May.
Same here...
Me too. Cashed out of two I-Bonds from separate accounts in Feb. They had the 0% fixed, but did very well from the 9%+ days.
T-Bills are simply more attractive and work better for me, even if the rates go down to 4% next year. That 3 month penalty for I-Bonds kind of rubs me the wrong way too, and with inflation still projected to come down another 1%, all the more reason not to buy right now.
Hi Jeniffer, thank you for this video. Have you done any video for how to handle the extra I-Bond purchased as Gifts? If not, can you do one? Or, please share the link, thank you!!!
th-cam.com/video/hKrH_wWdSuM/w-d-xo.htmlsi=Ce2ovRRwH-FgyRck I think this is it.
what do you think about EEIAX emerging market local fund.
Hello,when cashing out ,what you think it’s best to pay taxe at cashing out or after?
Great video, Jennifer, as always! Where can you find in Treasury Direct the fixed rate given at the time when individual I Bonds were purchased, years back? I'll start combing that website, but I'm hoping you can give some advice on where to find this to see if the 1.3% fixed rate is better than whatever I am getting now on bonds purchased over 16 years ago. Thank you!
did you ever get a reply on this? I have some bonds that i purchased many years ago and dont know how to tell
I’ll be keeping an eye out for that next video. I’ve got $10k in I-bonds I bought over a year ago that have 0% fixed rate that I’d like to unload… the question is do I buy their replacement this month or next.
I'm going to wait until hearing your predictions for the the future rate before doing anything, but based on that video it seems like you are expecting the fixed rate to go down. Am I right?
That’s the impression I got here and on other channels but… I don’t see the economy getting better so I have some doubts tgat the rate will go down.
Thanks for another great video! If you haven't already, would you be willing to do one on I-Bonds vs. HYSAs?
I bought my first 10K I-Bond in April 22' (after watching your related video at the time), and I now plan to redeem it and move it to my HYSA. My reasons:
* no 10K annual limit
* contributions anytime
* compounds daily
* liquid as needed
What's your thoughts on this?
Another great, and even better, option is just a solid index fund or ETF. Would you agree?
Another great video. So you redeem the Ibonds from 2022 and you pay the federal tax...but if you redeem more than 10k your kind of stuck waiting because of the annual Ibond limit restarts?
I am new to bonds. Can you keep adding $10,000 year after year to the 30 year bond?
Can I still buy new I bond for gift if I just delivered one this year?
I bought I bond $10,000 in 2022 and 2023, respectively. I did not do anything since I bought. I can see the current value is $21,516 only, but I do not know the rates. Do I have to renew them every year? Ortherwise I do not get any interest? I originally thought I bought th eI series for 5 yrs, now I am getting a bit confused. Thank you very much.
Will I loose 3 months intrest on partial redemption ?
Nice Video! How long does the 5.27% rate last?
Six months from when you purchased it, then the new variable rate will be added to the 1.3% fixed that that won't change for the life of the bond.
I intended to just set it and forget it and let $10k ride pretty much forever. This is how I understand this information: No interest in April, and ‘whatever’ interest determined in May and going forward each interest rate adjustment. Is that correct?
So I still have time to redeem my 9.72 ibond purchased in 2022 for the fixed rate of May 2024? And if so my fixed rate will, from now on, be combined with every new variable rate to give me a unique combined rate?
So if I ordered I Bonds in December 2023 and they were issued January 2024 they will apply towards my 2024 limit, correct?
I'm going to the bank this week with 21 paper I bonds that I bought in 2010-2013 to redeem them.
I don't think any bank will cash them for you. You need to fill out a form, get it notarized, and mail them in. That takes about 3 to 4 weeks to get your money
Treasury Direct says you can check with your bank or credit union to see if they will cash them, and to what dollar value. I had done some previously at the credit union years ago, so I'll start there.@@John-mk5bj
I did HH bonds in Oct and it took 7 weeks, again in Jan and it took 6 weeks. You must mail in notarized form. Some bank do cash I bonds but none cash HH bonds
Please: For I bonds in gift account for minor grandchildren, can I redeem and then repurchase at the new rate or do they have to be distributed and their parent repurchase? So glad you're back!
Pretty sure that once you specify an I-Bond as being a gift, the only control that you have over it is when to transfer the gift to the individual's Treasury Direct account.
Thanks for your reply!
@@magicjones1706 I agree with Max Grey.
Is that 1.3 percent monthly or yearly?
Jennifer
Do you plan to soon provide an estimate of the VARIABLE rate beginning in May?
Jennifer mentioned that she will have a video on that soon.
When you gift an Ibond does the 12 month hold time start when you purchase it or when the giftee accepts/receives the Ibond into their account?
When you purchase it
Thanks Jen! What do you think about cashing in a 2022 0% fixed versus a 2021 0% fixed rate since the 2021’s are only 2 years away from the 5 year mark to do away with the interest penalty?
I did exactly that, but I still plan or redeeming my 2021 bond before 5 years. The variable rate is 3.94% until July this year. The 3 month loss will be about $115.
Thanks for the responses!
@@monarene44 Is it $115 for the 3 months loss interest on the 10,000 I bond ?
It would be helpful to tell us how to determine whether we had the old rate or new fixed rate on bonds we own.
Yes!
The Fixed Rate 1.3% started Nov 2023 and has not been this high since 2007. On the treasurydirect site. There is a link to the chart half down the I bond page. youtube will not let me post the link.
@@larrykruck8047thank you!!
The fixed rate is not a guaranteed minimum rate. Composite rate could be less in a deflationary situation. In all cases, however, the composite rate will always be greater than or equal to 0.00%.
Is the I Bond variable rate based on the March inflation rate? If so, can the variable rate be calculated based upon the March inflation rate data?
Correct, based on CPI-U March data which will be released on April 10. At that time the variable portion of the rate can be determined since it is based on a fixed formula.
is IBond interest compounded, or is interest calculated only on the initial contribution (say $10,000) each time interest is calculated?
It is compounded, although every 6 months not every month.
I just purchased a new ibond yesterday, I see the current rate of 5.27, but where do I see the fixed rate of 1.3%?
On the treasurydirect site. On the I bond page. youtube will not let me post the link.
Given that $10k is the most anyone can buy in a calendar year (generally speaking), I think this is a universal type of question. Have you calculated how much interest is being given up for the 3 month penalty on the bonds with no fixed rate that are sold now? Then, how long will it take with the new fixed rate bonds purchased to break even before then starting to see an ongoing higher rate of return? Thank you Jennifer!
I've calculated it. I bought $10,000 in I-Bonds in October 2022 to get the 9.62% interest rate. When the Treasury set the fixed rate to 1.30%, I waited until January 2024 and then I sold the October 2022 I-Bonds and used that money to buy I-Bonds that gave me the fixed interest rate of 1.30%. I gave up about $92 in interest by selling before 5 years. This was based on the interest rate of 3.38% that I had at the time. The fixed rate alone will get back that $92 in just 9 months. Unless there is a dire emergency, I am not selling that I-Bond sooner than 5 years from now.
Generally 8 months to break even point with 1.3% and you can't cash out the 12 months. So in the long term it better to transfer to new bond rates and you can reinvest the gain interest in an CD or high savings account.
Don't forget income tax on the interest when you redeem. I figured it out for my wife & I. On two I-Bonds ($20,000) our realized gain right now would be $2,608 which would be added to our 2024 income. At 22% federal tax we'd owe $573.76. If I don't invest the gains the break even for me is 27 months. If I invest the gains at around 5% I figured it would take roughly 18-21 months to break even, after waiting as long as possible to pay taxes. Of course the break even point will rise or fall with interest rates.
@@FunTimePlaying You have to pay taxes no matter what. That's a sunk cost. I use I bonds for inflation protection during emergency or economic downturns not as investment strategy but a type of insurance policy. My retirement savings are investments.
@@b.coxemba6799 ""You have to pay taxes no matter what" while generally correct not 100% correct. It depends on a person's federal taxable income, which could be 0%. Federal tax can also be avoided if the i-bond is used for higher education (if the criteria is met). In my case the tax expense would put my break even point close to holding the bond for 5 years, so I'll just hold on to them and consider buying additional bonds. As the theme of this channel goes, everyone's financial journey is different.
I purchased 10k in Oct 2022 which is at 3.94% and another 10k in Jan 2023 which is at 4.35%. Should I sell the Oct 2022 and reinvest the 10k at the 5.27% or should I buy 10k new money? I thought old I-Bonds switched to whatever the newer rate becomes every 6 months? I must have been mistaken
Gov should automatically update to the best current rate instead of wasting peoples time
If you buy I-Bonds before the end of April 2024, you will have a fixed rate of 1.30% and a variable rate of 3.97%. Add those numbers together and you get 5.27% in total. If the variable rate went to 0.00%, you would always make a minimum of 1.30% for as long as you hold the I-Bond. In my opinion, selling I-Bonds with a 0.00% fixed rate and buying I-Bonds that have a fixed rate is the right thing to do. You will make more interest. This assumes you want to continue with I-Bonds instead of attempting to find a better investment elsewhere. If you think there is a chance the fixed rate will be even higher in May, perhaps buy $5,000 now to lock in 1.30% and then buy another $5,000 in May.
KayKay14m provides a good explanation. To shed light on your misunderstanding, the variable rate of all I-Bonds is the same ( at least for the 6 month cycle that they are currently in), but the fixed rate is set at purchase and only applies to the I-Bonds purchased during the 6-month period in which that particular fixed rate was set. For many recent years the fixed rate has been 0.00% so it was easy to conclude that all I-Bonds had the same overall rate.
And the other part of your question is harder to answer: would you rather increase your i-bond holdings by 10k this year on a net basis, or replace lower yielding ones by higher yielding ones?
How long does it take for Treasury to issue a paper i-bond after a tax return is submitted?
I got mine last year in 5 days. Wouldn't count on that this year... IRS is running slower this year.
Why do you use Tbill ladders when Fidelity and Vanguard provide equal or higher interest rate on standing cash?
Assuming your "standing cash" is in a non qualified account and you live in a state with a state income tax, you have to factor in your return after taxes (state and federal). Jennifer has a video on that when she compares agency bonds (and I think CDs) to treasuries (that only subject you to federal taxes).
@@carlanderson8309 Good Point! Fortunately, I’m a Nevada resident.
So you can lock in interest for more than one day.
If i just redeem by invested amount in I bond leaving behind the interest earned will i be subjected to tax?
The withdrawl breaks down to a principle and interest amount which it shows you on the confirmation page of the redemption.
@@neilfraser7689 Thanks for your reply.
Beginner question: How do I find the Fixed Rate on my current I Bond?
On the treasurydirect site. There is a link to the chart half down the I bond page. youtube will not let me post the link. The Fixed Rate has not been this high since 2007.
How do I find the fixed rate on previous issued I Bonds in TD? If I buy I Bonds in Nov 2023 for $10000 can I buy another $10000 in April 2024 since it’s a new calendar year?
yes you can buy another 10k for '24. Its on the TD site somewhere, but here's my little chart I made I BONDS Variable % Fixed % Total Interest
November 2021 7.12% 0 7.12%
May 2022 9.62% 0 9.62%
November 2022 6.49% 0.40% 6.89%
May 2023 3.4 0.90% 4.30%
November 2023 3.97 1.30% 5.27%
@@gpags0205 Thank you for your help. This will help me make my decision!
There is a link to the chart half down the I bond page.
@@larrykruck8047 Thanks
My spouse and I have delivered 10000 gift to each other at the begining of the year. So we cannot purchase any more for this year, correct?
Right, but you could buy another gift to hold
I have paper I bond and It will take longer than a month to cash them, I will not have the money until June! What was to rate 20 years ago?
1% per treasurydirect.gov/files/savings-bonds/i-bond-rate-chart.pdf
1%
If you bought IBonds between 2008 and 2022 you are receiving 0 or extremely low fixed rates. And as said in video the current fixed rate is 1.3%. One should also check out treasury short term and long term bonds. One can set up an account with the government and buy and sell . Current 10 year bonds are over 4%. I believe 6 month treasuries have higher rates.
Do you happen to know how to figure out what the fixed rate was at the time when individual I Bonds were purchased, years back? I'm going to check Treasury Direct, but am assuming it will not be so obvious there. Thanks!
@@bridgetg1916 On the treasurydirect site. There is a link to the chart half down the I bond page. youtube will not let me post the link.
I purchased I-bond on 7/2022 when interest was 9.62%. I see on my acct that the interest is 0? does that sound right? Since it is less than 5 years, If I redeem it, I am not losing much b/c the interest was at 0 percent?
Ur losing the interest earned at 9.62. Shes talking about the fixed rate which was at 0% at the time u purchased. There are two interest rates.
you are looking on Treasury Direct webpage at your purchased ibond right? I noticed similar and also wished that the detail would have the fixed and current rate.
@whirlwinds2321 where can I find my fixed interest rate on my bond
The fixed rate for that I-Bond when you purchased it was 0%. You will only make interest on the variable rate for this I-Bond. This rate changes every 6 months. Based on your purchase date, I'm assuming your current interest rate is at 3.94%. For every $1,000 that you purchased in July 2022, you should have earned about $100 in interest as of April 2024. This factors in the loss of 90 days worth of interest.
👍🙏💞
Can you sell an I - bond that has bought for your spouse but they have not taken delivery of it yet?
No
Forgive my ignorance but Why would someone want to buy an Ibond and get 1.3%. When you can get over 5% in a high yield account. Thank you
Its 1.3% fixed + 3.97% adjustable per inflation rate = current 5.27% rate.
maybe some dont want state income tax.
I think 1.3% is low I believe I bought few years ago was 7ish per cent. I have not redeemed it yet.
Nope you're wrong, that was the variable rate, the fixed rate was 0 and that bond only earned the 7 ish% for 6 mos.
But the fixed rate was zero percent, and still is for those bonds. Which have done very well for you because of the variable amounts that first year.