Anyone else get into ibonds? I was able to max out for me, wife and trust before YE 2021 and then again this past month for our 2022 allotment. So we've got $60k cash earning 7.12% in U.S. government protected securities. This rate will last a minimum of 6 months before it resets based on inflation, though it is looking like we'll see another frothy rate when it's announced in April. These are also federal tax deferred until they are sold and California tax exempt.
I-Bonds...a great place for idle cash
- Thread starter ChiKid24
- Start date
NEW -> Contingent Buyer Assistance Program
Not likely to increase the base rate given the demand and the fact that TIPs have a negative real yield. Sure iBonds are only an inflation hedge, but at least they cover that component with an attractive rate. The online "high" yield savings account are still paying less than 1% pretty much across the board so the real return on people holding cash there is very negative.
momopi
Well-known member
https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_ibuy.htm
How much in I bonds can I buy for myself?
In a calendar year, you can acquire:
up to $10,000 in electronic I bonds in TreasuryDirect
up to $5,000 in paper I bonds using your federal income tax refund
Two points:
The limits apply separately, meaning you could acquire up to $15,000 in I bonds in a calendar year
Bonds you buy for yourself and bonds you receive as gifts or via transfers count toward the limit. Two exceptions:
If a bond is transferred to you due to the death of the original owner, the amount doesn't count toward your limit
If you own a paper bond issued before 2008, you can convert it to an electronic bond in your account in TreasuryDirect regardless of the amount of the bond. (The annual limit before 2008 was greater than today's limit of $10,000.)
What's the interest rate on an I bond you sell today?
For the first six months you own it, the Series I bond we sell from November 2021 through April 2022 earns interest at an annual rate of 7.12 percent. A new rate will be set every six months based on this bond's fixed rate (0.00 percent) and on inflation.
Can I buy I bonds as gifts for others?
Yes.
Electronic bonds: You can buy them as gifts for any TreasuryDirect account holder, including children.
Paper bonds: You can request bonds in the names of others and then, once the bonds are mailed to you, give the bonds as gifts.
How much in I bonds can I buy as gifts?
The purchase amount of a gift bond counts toward the annual limit of the recipient, not the giver. So, in a calendar year, you can buy up to $10,000 in electronic bonds and up to $5,000 in paper bonds for each person you buy for.
https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iredeem.htm
When can I cash my I bonds?
After they are 12 months old.
If you cash an I bond before it is five years old, you will lose the last three months of interest.
I bonds earn interest for 30 years if you don't cash the bonds before they mature.
If you've been affected by a disaster, special provisions may apply.
How much in I bonds can I buy for myself?
In a calendar year, you can acquire:
up to $10,000 in electronic I bonds in TreasuryDirect
up to $5,000 in paper I bonds using your federal income tax refund
Two points:
The limits apply separately, meaning you could acquire up to $15,000 in I bonds in a calendar year
Bonds you buy for yourself and bonds you receive as gifts or via transfers count toward the limit. Two exceptions:
If a bond is transferred to you due to the death of the original owner, the amount doesn't count toward your limit
If you own a paper bond issued before 2008, you can convert it to an electronic bond in your account in TreasuryDirect regardless of the amount of the bond. (The annual limit before 2008 was greater than today's limit of $10,000.)
What's the interest rate on an I bond you sell today?
For the first six months you own it, the Series I bond we sell from November 2021 through April 2022 earns interest at an annual rate of 7.12 percent. A new rate will be set every six months based on this bond's fixed rate (0.00 percent) and on inflation.
Can I buy I bonds as gifts for others?
Yes.
Electronic bonds: You can buy them as gifts for any TreasuryDirect account holder, including children.
Paper bonds: You can request bonds in the names of others and then, once the bonds are mailed to you, give the bonds as gifts.
How much in I bonds can I buy as gifts?
The purchase amount of a gift bond counts toward the annual limit of the recipient, not the giver. So, in a calendar year, you can buy up to $10,000 in electronic bonds and up to $5,000 in paper bonds for each person you buy for.
https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iredeem.htm
When can I cash my I bonds?
After they are 12 months old.
If you cash an I bond before it is five years old, you will lose the last three months of interest.
I bonds earn interest for 30 years if you don't cash the bonds before they mature.
If you've been affected by a disaster, special provisions may apply.
freedomcm said:
Not likely to increase the base rate given the demand and the fact that TIPs have a negative real yield. Sure iBonds are only an inflation hedge, but at least they cover that component with an attractive rate. The online "high" yield savings account are still paying less than 1% pretty much across the board so the real return on people holding cash there is very negative.
irvinehomeowner
Well-known member
All you 1%ers with idle cash.
#jelly
#jelly
irvinebullhousing
Well-known member
Not loosing money is the name of the game in the next few years.
After yesterday's CPI report released it is now possible to calculate the next 6-month inflation component for ibonds. The rate will be 9.62%!! This is a pretty sweet return on a low risk government backed bond that is exempt from CA income tax. If you have not yet pulled the trigger on this in 2022, I recommend making a purchase before the end of April. You would lock in 6 months at the current 7.12%, then 9.62% for the 6 months after. So an average 1 year return of 8.37%. If you wait to purchase next month, you'll get 9.62% for the first 6 months and then whatever it resets at in November for the 6 months after.