📢 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.
March inflation rate came out at 0.65%, a bit higher than expected. The variable rate for I-bonds for May 2024 to Oct 2024 will be 2.96%. This makes the purchase of I bonds in April preferable than investing in May.
I did what Jen did in January. I sold my 0.0% fixed rate in early January and bought the 1.3% in late January. I will do the same next January. I agree with Jen that it could be around 1.2% That's for the Great Videos 👍
Thank you so much for all of your helpful videos. You do a great job of explaining concepts that are have real impact on viewer's financial lives. Also the videos inspire me to save more and that is a great thing! cheers!
The March number came out to 312.332 higher than Jen's projected 312.132!!! So the 6-month I-bond Variable rate will be higher than her projected 2.83%
Thank you for making the fixed and variable rate analyses comprehensible, Jen. Looking like April for sure. Will catch the update after the 10th to lock in. Mil gracias!
It's great to see that you are back online. I also cashed out my old I-bonds (in Dec), and replaced them with the new 1.3% fixed rate version. I've also been experimenting with TIPS, having bought some 5y last June (1.25% rate) and some 10yr this month (1.75% rate). They are certainly very complex. I am looking forward to you coming up with a simple way of analyzing them in a future video. LOL
Thank you for another informative video, Jen! I redeemed $10k of 0% Ibonds in December 2023 and another $10k of 0% in January 2024. Based on your prediction, I will likely buy $10k in April to capture the 1.3% fixed rate. Those will be a 2nd tier EF for me, but I hope to hold them for at least 10 years if I don’t need the money.
I'd like to take a look at regular T's and other government's performance of various maturities over comparable periods to TIPS and I-Bonds. How has the overall inflation protection worked out historically?
Excellent video!! My strategy will be max out the 1.30% before May to take advantage of this record rate for the long term. In the short term, I am investing in CDs that are paying around 5.30%.
My wife and I purchased $10,000 I Bonds in October of 2022 at 9.62 interest rate, the fixed rate was 0. That being said they are approaching 18 months and I am watching your TH-cam channel to see what May brings. I am thinking of selling and loosing the 3 months interest.
We are waiting a few more days before deciding whether to buy in April or May.. We still have some zero fixed rate iBonds which we are not selling yet - preferring to minimize income this year and next to do Roth conversions during the TCJA and prior to my wife and I claiming Social Security. Your mileage may vary. Thanks for your great videos!
With 1.3% being the highest in 16 years, what does you crystal ball say about the coming 2-5 years? Thinking about a gift strategy to lock in 1.3% but dont want to do that if higher rates seem likely in coming years.
I switched from those 2022 iBonds to the 1.3% fixed in Jan 2024 thanks to your recommendation. I'm maxed out so I'll just wait until 2025 to see what's best to do.
Great video! I redeemed my 0% bonds in January, plan to buy the 1.3% this month, and perhaps some to gift my spouse, since I don’t expect the rates to go higher in May, and they may go lower. Debating whether to redeem the 0.4% ones, but holding them for now.
The March CPI is out and comes in higher than expected. That means the inflation rate of iBonds issued in May will be higher than the projections in this video.
It looks like your team has cracked the fixed rate formula! I have been gradually redeeming 9/22 I bonds and repurchasing at the current rate. I exchanged $5000 in December to max out 2023, and have been doing monthly exchanges of $833 in 2024. I’m waiting for the new inflation rate to decide whether to exchange in April or May and how much. I may max out this month from the looks of things.
20:27 note on recent 30yr TIPs purchase, would love to see your follow up on that buy and especially your view on how TIPs complexity varies from I-Bonds. Going over how "more different than similar" would be great content and especially due to the record setting 30yr TIPs auction
I wish I had seen this earlier today, before I spent over an hour doing my own estimate of the new variable rate. I do not think the average going back to September is representative of the March rate. I looked at March estimates starting with the January-February average and then up to double the January-February average. I did not sell my 0% fixed January 2022 purchases in 2023 so as to spread the tax on the sale into 2024 and to spread out the 12 month can't sell period with other ibonds I have. Monday I will sell those January 2022 bonds and then decide if I want to buy more with 1.3% fixed this month or put the proceeds into t-bills or money markets at 5% or more. Ibonds were fun while they lasted.
Recently sold all my 0% for the 1.3% incurring the penalty. 1.3% is the highest it had been in 16 years. I will take the penalty for a good long-term hedge. Planning to add a bit more before the rate reset this month. I don't see the fixed rate going up. It may go down, it may remain the same. Buying now, however, locks the higher inflation rate for 6 months. I may be wrong and it goes up (nobody knows yet).
Yes, because the current variable rates are low, the fixed rate is high and you have over 2 years to go until the 5 year mark. I've calculated that your July 2021 I-Bond is now valued at $11,596 and is at an interest rate of 3.94%. If this is correct, you will lose $115 in interest from those 3 months. It will take 10 to 11 months to get that $115 back. However, it will take a little longer to outperform the July 2021 I-Bond due to the interest it was making on the higher principal amount ($10,000 versus $11,596). I estimate it will take 15 months to catch up on the total interest that the July 2021 I-Bond would have made during those 15 months. That would give you a breakeven point of July 2025.
@@KayKay14m Thank You but the site was down earlier and I guessed at the purchase date. It was May of 2022. So not knowing how to calculate it myself, I am guessing it will be a longer breakeven date and the 1.3% fixed rate is still a better long term investment?
@@dillardhayes3612 Your I-Bond should have a value of about $11,268. Selling that I-Bond will lose $95 in interest for those 90 days. The breakeven is August 2025. Since you would hold for a minimum of 15 months anyway, it would all work out. Another way you could do this to make the break-even point quicker is to buy the April 2024 I-Bond with new money, then wait 6 months (October 2024) to sell the May 2022 I-Bond. You would lose $112 in interest on the I-Bond that you sell, but by then, the new I-Bond will have made $131 in interest. Or maybe wait until January 2025 to sell and buy the January 2025 I-Bond with it depending on the fixed rate in November 2024.
How can u redeem all your 0% I-bonds (even the gifted ones) at once? Also what is the % that I have made if I bought all my first i-bonds between May 1, 2022 & Oct 30, 2022 when the i-bond rate was 9.62% and I decide to sell them now (as u plan to sell all your 0% I-bonds? Is there a tax break for state & local taxes (like T-bills)?
Jennifer; you said that you would comment on the discrepancy of the rate for 5/01/2015 when instead of 0.10% it sets to 0.00% (when it should have been 0.10%). at minute 9:16 of the tape. Did you get back to the explanation/comment about this anomaly? I would love to know.
Hi! This is one of the videos from our Bond Masters course which you may have already seen. If you don’t want to wait, try this one instead - it’s even more comprehensive (start from minute 1): Bond Laddering In Times Of Uncertainty | Bond Masters Sneak Peak: How To Build A Bond Portfolio th-cam.com/video/ym2DI5ztUwA/w-d-xo.html
i currently have $10k of ibonds at the .9% fixed. i plan on buying another $10k ibonds in april to lock in the 1.3% fixed rate. Given what your guess is, the odds are probably not good for the fixed rate to go above 1.3%. i am curious: i recall you had another way of predicting the fixed rate similar to how you predict the variable rate (average of each of the last 6 months?). How does that formula compare with the 65% formula and what did it predict for the May 24 rates?
Thank you for another very informative and helpful video! At age 70, I have 30K in I-Bonds, 20K of which are at 0% fixed rate. This is my only inflation protection account, so is it a good idea to keep the 30K in I-bonds and purchase more in April, rather than redeeming 10K to purchase the 20K in April? Is keeping the 0% I-Bonds a bad decision if one is trying to build up inflation protection? The rest of my portfolio is in Treasuries and CDs, all fixed income. Thank you!
Good morning! It's Eva - I sent this to Jennifer & she said: "First, you can't buy $20K in April (with just one SSN) so you need to do this with your SSN & your spouse's SSN ($10K each). Second, it's not a bad decision, the questions are - could there be a better decision & have you considered TIPS?" Basically, it's complicated & she really can't dive deep into this in the comments section. I'm attached two forms below to submit your question for the next Bond Masters or Member LIVE (replays available as always) Here is the one for Bond Masters (LIVE is on 4/9 @5pm): forms.gle/agi7U8GqymY6mqfN7 Here is the one for Members (LIVE is on 4/16 @ 6pm): forms.gle/caABzucn2mS2XCzu7
@@DiamondNestEgg Thank you, Eva! I will submit my question for the next member live.I made a typo in my question and should have typed 10K instead of 20K. I've considered TIPS, but they are way too complicated and upsy-downsy for me! Looking forward to Jennifer's next video! I've learned so much from her and am very grateful.
My Vanguard Cash Plus account is giving 4.70% this month so I’m not expecting the combined fixed and variable I bond rate to be much above that. Some bank CD rates are in the neighborhood of 5.25% and I bond rates tend to stay neck and neck with those or slightly higher.
I've been in the Vanguard Cash Plus account too for a year and a half. Great account and insured up to 1.25 million. Although just recently I pulled some money from that and put it into the Vanguard Treasury Money Market Fund (VUSXX) giving 5.27%. That and straight T-Bills is where I have a big portion of my cash. I recently pulled all money from the I-Bonds, and don't think I'm going back into them. The 1.3% fixed rate is nice, but inflation is excepted to come down further, and the T-Bills just work better for me not locking my money up for too long.
There could be an election year "surprise" fixed rate, but that would probably occur in November - 5 days before the election. I'm holding on to my old I bonds from the early 2000's with high fixed rates, but liquidating the others with low or zero fixed rates. Some are predicting a recession with deflation which is not a good scenario for I bonds. For new purchases, I'd rather have a 20 or 30 yr bond returning 4.5 % than a mystery I bond rate. It all depends on what you think will happen with inflation.
It all depends on the number of months until an April 2024 I-Bond outperforms a November 2022 I-Bond (assuming that's when you bought it). If so, then your I-Bond should be valued at $10,881. I believe your breakeven point would be about January 2025. At that point, the April 2024 I-Bond should make up all the interest lost due to selling the November 2022 I-Bond. Not just the 90-days that you lose, but also all the interest in those 9 months. After that, the April 2024 I-Bond will outperform the November 2022 I-Bond.
Yes. My understanding is that you can buy as many gifts as you'd like so long as you only deliver $10k each year (and no other I bonds are bought by that person in those years.
📢 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.
March inflation rate came out at 0.65%, a bit higher than expected. The variable rate for I-bonds for May 2024 to Oct 2024 will be 2.96%. This makes the purchase of I bonds in April preferable than investing in May.
Jen is my superhero when it comes to explaining whats happening in the bond world. Thankyou for clearing up much confusion.
I did what Jen did in January. I sold my 0.0% fixed rate in early January and bought the 1.3% in late January. I will do the same next January. I agree with Jen that it could be around 1.2% That's for the Great Videos 👍
You're welcome!
Thank you so much for all of your helpful videos. You do a great job of explaining concepts that are have real impact on viewer's financial lives. Also the videos inspire me to save more and that is a great thing! cheers!
The March number came out to 312.332 higher than Jen's projected 312.132!!! So the 6-month I-bond Variable rate will be higher than her projected 2.83%
Thank you for making the fixed and variable rate analyses comprehensible, Jen. Looking like April for sure. Will catch the update after the 10th to lock in. Mil gracias!
Even though i think i-bonds will underperform over the longrun it gives me a level of security for my rainy day fund that is very nice
Thank you Jen, you're the best. I cashed out my .00% fixed rate IBond but hubby doesn't want to cash his due to paying taxes on interest.
Great video. Even if they round up to 1.3%, the variable rate is coming down, so I am going to buy gift bonds in April.
Thanks for sharing!
It's great to see that you are back online. I also cashed out my old I-bonds (in Dec), and replaced them with the new 1.3% fixed rate version. I've also been experimenting with TIPS, having bought some 5y last June (1.25% rate) and some 10yr this month (1.75% rate). They are certainly very complex. I am looking forward to you coming up with a simple way of analyzing them in a future video. LOL
oh I love the way you lead me through your spread sheet about the 65% EXCELLENT!
Great video, Jen. You put a lot of work into this. We appreciate it! Glad I bought my 2023 ibonds in January at a high fixed rate.
Thank you for another informative video, Jen! I redeemed $10k of 0% Ibonds in December 2023 and another $10k of 0% in January 2024. Based on your prediction, I will likely buy $10k in April to capture the 1.3% fixed rate. Those will be a 2nd tier EF for me, but I hope to hold them for at least 10 years if I don’t need the money.
Sold six older I-bonds with a 1% fixed rate (2005 issues). Bought seven new I bonds.
The passion is infectious,...you go girl!
Infectious
I'd like to take a look at regular T's and other government's performance of various maturities over comparable periods to TIPS and I-Bonds. How has the overall inflation protection worked out historically?
Excellent video!!
My strategy will be max out the 1.30% before May to take advantage of this record rate for the long term. In the short term, I am investing in CDs that are paying around 5.30%.
Could you please kindly let me know which bank offers CD with 5.3% ?
you"re the best Jen!
My wife and I purchased $10,000 I Bonds in October of 2022 at 9.62 interest rate, the fixed rate was 0.
That being said they are approaching 18 months and I am watching your TH-cam channel to see what May brings. I am thinking of selling and loosing the 3 months interest.
We are waiting a few more days before deciding whether to buy in April or May.. We still have some zero fixed rate iBonds which we are not selling yet - preferring to minimize income this year and next to do Roth conversions during the TCJA and prior to my wife and I claiming Social Security. Your mileage may vary. Thanks for your great videos!
@DougASAP LOL, did you know that "your mileage may vary," is an acronym (YMMV)? I just learned it this week! 😂
With 1.3% being the highest in 16 years, what does you crystal ball say about the coming 2-5 years? Thinking about a gift strategy to lock in 1.3% but dont want to do that if higher rates seem likely in coming years.
Get I-Bond before May, would be a better choice, perfect analyst ... Thanks @Jen
These videos are great! Please continue your vigilence to inform investors.
Sooo happy that you restarted youtube. Could you please recommend some high yield CDs?
Thanks for the information. How can I look up the performance of a 5-year TIPS bond for future reference?
I switched from those 2022 iBonds to the 1.3% fixed in Jan 2024 thanks to your recommendation. I'm maxed out so I'll just wait until 2025 to see what's best to do.
Great video! I redeemed my 0% bonds in January, plan to buy the 1.3% this month, and perhaps some to gift my spouse, since I don’t expect the rates to go higher in May, and they may go lower. Debating whether to redeem the 0.4% ones, but holding them for now.
It looks better to purchase I-Bonds with in the next 2 weeks.
Jennifer, you are the best. Thanks for all your videos and info.
The March CPI is out and comes in higher than expected. That means the inflation rate of iBonds issued in May will be higher than the projections in this video.
It looks like your team has cracked the fixed rate formula! I have been gradually redeeming 9/22 I bonds and repurchasing at the current rate. I exchanged $5000 in December to max out 2023, and have been doing monthly exchanges of $833 in 2024. I’m waiting for the new inflation rate to decide whether to exchange in April or May and how much. I may max out this month from the looks of things.
Good luck!
20:27 note on recent 30yr TIPs purchase, would love to see your follow up on that buy and especially your view on how TIPs complexity varies from I-Bonds. Going over how "more different than similar" would be great content and especially due to the record setting 30yr TIPs auction
Stay tuned!
Is schwab still in trouble today April 2024 ? Thank you .
I wish I had seen this earlier today, before I spent over an hour doing my own estimate of the new variable rate. I do not think the average going back to September is representative of the March rate. I looked at March estimates starting with the January-February average and then up to double the January-February average. I did not sell my 0% fixed January 2022 purchases in 2023 so as to spread the tax on the sale into 2024 and to spread out the 12 month can't sell period with other ibonds I have. Monday I will sell those January 2022 bonds and then decide if I want to buy more with 1.3% fixed this month or put the proceeds into t-bills or money markets at 5% or more. Ibonds were fun while they lasted.
Thank you for keep postimg
Sold 2 zero interest ibonds in March, will buy 2 new before end of April (me & hubby) just like you. Thank you.
You're welcome!
So… buy in may or jump on more now? Or wait for end of year? I have $5k from January already.
CPI of March was 3.5. So maybe fixed will be 1.3% again?
Recently sold all my 0% for the 1.3% incurring the penalty. 1.3% is the highest it had been in 16 years. I will take the penalty for a good long-term hedge. Planning to add a bit more before the rate reset this month. I don't see the fixed rate going up. It may go down, it may remain the same. Buying now, however, locks the higher inflation rate for 6 months. I may be wrong and it goes up (nobody knows yet).
I have a question: What is the advantage of buying ibond to buying 1 to 3 month T-bills which has interest rate close to 5.5%? Thank you.
I have been thinking about the same question
@@joyzz9498 that is what I’m doing mix of 4 week and 8 week
You do not have to pay tax until you sell it AND the fix rate will stay with you for 30 years if you hold it to maturity.
T-bills are short term so it depends on what your goal is
Long term inflation protection.
Before buying an I bond what other comparable investments should you check, such as CDs and HYS?
So is it wise to redeem I-bonds at 0% that are less than 5 years in maturity? Due to losing 3 months interest? I have 10,000 from May of 2022.
Yes, because the current variable rates are low, the fixed rate is high and you have over 2 years to go until the 5 year mark. I've calculated that your July 2021 I-Bond is now valued at $11,596 and is at an interest rate of 3.94%. If this is correct, you will lose $115 in interest from those 3 months. It will take 10 to 11 months to get that $115 back. However, it will take a little longer to outperform the July 2021 I-Bond due to the interest it was making on the higher principal amount ($10,000 versus $11,596). I estimate it will take 15 months to catch up on the total interest that the July 2021 I-Bond would have made during those 15 months. That would give you a breakeven point of July 2025.
@@KayKay14m Thank You but the site was down earlier and I guessed at the purchase date. It was May of 2022.
So not knowing how to calculate it myself, I am guessing it will be a longer breakeven date and the 1.3% fixed rate is still a better long term investment?
@@dillardhayes3612 Your I-Bond should have a value of about $11,268. Selling that I-Bond will lose $95 in interest for those 90 days. The breakeven is August 2025. Since you would hold for a minimum of 15 months anyway, it would all work out. Another way you could do this to make the break-even point quicker is to buy the April 2024 I-Bond with new money, then wait 6 months (October 2024) to sell the May 2022 I-Bond. You would lose $112 in interest on the I-Bond that you sell, but by then, the new I-Bond will have made $131 in interest. Or maybe wait until January 2025 to sell and buy the January 2025 I-Bond with it depending on the fixed rate in November 2024.
Have the new rates been announced? If not when are they? anybody know? Nothing but questions.
Amazing prediction! Thanks Jennifer.
So the current combination rate is 5.27%. If an I Bond is purchased in April how long does the Bond earn that rate?
6 months.
How can u redeem all your 0% I-bonds (even the gifted ones) at once? Also what is the % that I have made if I bought all my first i-bonds between May 1, 2022 & Oct 30, 2022 when the i-bond rate was 9.62% and I decide to sell them now (as u plan to sell all your 0% I-bonds? Is there a tax break for state & local taxes (like T-bills)?
Jennifer; you said that you would comment on the discrepancy of the rate for 5/01/2015 when instead of 0.10% it sets to 0.00% (when it should have been 0.10%). at minute 9:16 of the tape. Did you get back to the explanation/comment about this anomaly? I would love to know.
That 65% number is pretty darn good for a quick rough estimate
I already bought I bond maximum this month
Cant wait till the laddering video
Hi! This is one of the videos from our Bond Masters course which you may have already seen. If you don’t want to wait, try this one instead - it’s even more comprehensive (start from minute 1): Bond Laddering In Times Of Uncertainty | Bond Masters Sneak Peak: How To Build A Bond Portfolio
th-cam.com/video/ym2DI5ztUwA/w-d-xo.html
i currently have $10k of ibonds at the .9% fixed. i plan on buying another $10k ibonds in april to lock in the 1.3% fixed rate. Given what your guess is, the odds are probably not good for the fixed rate to go above 1.3%.
i am curious: i recall you had another way of predicting the fixed rate similar to how you predict the variable rate (average of each of the last 6 months?). How does that formula compare with the 65% formula and what did it predict for the May 24 rates?
Very helpful video!
outstanding video
Thank you for another very informative and helpful video! At age 70, I have 30K in I-Bonds, 20K of which are at 0% fixed rate. This is my only inflation protection account, so is it a good idea to keep the 30K in I-bonds and purchase more in April, rather than redeeming 10K to purchase the 20K in April? Is keeping the 0% I-Bonds a bad decision if one is trying to build up inflation protection? The rest of my portfolio is in Treasuries and CDs, all fixed income. Thank you!
Good morning! It's Eva - I sent this to Jennifer & she said:
"First, you can't buy $20K in April (with just one SSN) so you need to do this with your SSN & your spouse's SSN ($10K each).
Second, it's not a bad decision, the questions are - could there be a better decision & have you considered TIPS?"
Basically, it's complicated & she really can't dive deep into this in the comments section. I'm attached two forms below to submit your question for the next Bond Masters or Member LIVE (replays available as always)
Here is the one for Bond Masters (LIVE is on 4/9 @5pm): forms.gle/agi7U8GqymY6mqfN7
Here is the one for Members (LIVE is on 4/16 @ 6pm): forms.gle/caABzucn2mS2XCzu7
@@DiamondNestEgg Thank you, Eva! I will submit my question for the next member live.I made a typo in my question and should have typed 10K instead of 20K. I've considered TIPS, but they are way too complicated and upsy-downsy for me! Looking forward to Jennifer's next video! I've learned so much from her and am very grateful.
My Vanguard Cash Plus account is giving 4.70% this month so I’m not expecting the combined fixed and variable I bond rate to be much above that. Some bank CD rates are in the neighborhood of 5.25% and I bond rates tend to stay neck and neck with those or slightly higher.
I've been in the Vanguard Cash Plus account too for a year and a half. Great account and insured up to 1.25 million. Although just recently I pulled some money from that and put it into the Vanguard Treasury Money Market Fund (VUSXX) giving 5.27%. That and straight T-Bills is where I have a big portion of my cash. I recently pulled all money from the I-Bonds, and don't think I'm going back into them. The 1.3% fixed rate is nice, but inflation is excepted to come down further, and the T-Bills just work better for me not locking my money up for too long.
I was wondering if anyone happens to know when the EE bonds video in Bond Beginners will be ready.
After tax day
There could be an election year "surprise" fixed rate, but that would probably occur in November - 5 days before the election. I'm holding on to my old I bonds from the early 2000's with high fixed rates, but liquidating the others with low or zero fixed rates. Some are predicting a recession with deflation which is not a good scenario for I bonds. For new purchases, I'd rather have a 20 or 30 yr bond returning 4.5 % than a mystery I bond rate. It all depends on what you think will happen with inflation.
based on your calculated projections, and my confidence in you I'll buy in late April.
Thanks Jen
Would you buy and gift in April @1.30%
Any opinion on selling 0.4% fixed rate I-bonds?
It all depends on the number of months until an April 2024 I-Bond outperforms a November 2022 I-Bond (assuming that's when you bought it). If so, then your I-Bond should be valued at $10,881. I believe your breakeven point would be about January 2025. At that point, the April 2024 I-Bond should make up all the interest lost due to selling the November 2022 I-Bond. Not just the 90-days that you lose, but also all the interest in those 9 months. After that, the April 2024 I-Bond will outperform the November 2022 I-Bond.
👁️ Bonds, baby. 👍
Is the interest earned on I bonds tax free of Federal and State Income taxes ?
State.
@@pdouglas3866 Any state ?
Why is anybody buying I bonds at 4% when you can get t-bills for 5% plus?
Long term inflation protection. Especially if you buy them with a relatively high internal fixed rate, as has been the case for the last 5 months.
@@pdouglas3866 t-bills will be high until inflation goes down. The FED won't cut rates until inflation has been down for quite a while
Can I buy both. 10k ibonds for myself AND gift 10k ( without delivery) ibonds to my wife in April?
Yes. My understanding is that you can buy as many gifts as you'd like so long as you only deliver $10k each year (and no other I bonds are bought by that person in those years.
Can you buy 10k in i- bonds and 10k in EE- bonds the same year?
No
Yes!
@@sueh6287 one no and one yes
Yes, you can (scroll down to the second question): www.treasurydirect.gov/savings-bonds/how-much-can-i-spend-own/
@@DiamondNestEgg Thank you! You are the best!
James Bond 007
My head hurts ......
😂
Fixed rate may go down a little?
Feel like the inflation rate is far below real inflation in our daily life