I-Bonds Discussion Thread (continuation of the FW thread)

I-Bonds Discussion Thread (continuation of the FW thread)
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#61

From Tipswatch.com

The variable rate on U.S. Series I Savings Bonds will fall from 2.48% to 2.22% for I Bonds purchased after May 1, based on the March inflation numbers just released by the U.S. Bureau of Labor Statistics.


#62

So what is the best course this time? What is everyone gonna do?

Is it smarter to buy a few days prior to April thirtieth . . . or thereafter in May?

I am in for certain. However I don’t have a handle on the purchase timing. In my ignorance I’m leaning toward an April purchase (bird in the hand), but I could be persuaded to wait if there is good reason to do so.


#63

I will buy before the end of April to lock in the nominal 0.1% fixed rate for the life of the bond (and the higher rate overall).


#64

I would buy before the end of April. You will know ahead what rate you will get(by buying at end of 6 month period you know you rate farther ahead of time) and have time to decide if you want to move your money in the future. Also, if you wait until May and the next 6 month rate is low, you are stuck with it, but this month you know what you will get for the first year, when you can sell if you want to.


#65

Thanks, guys. I appreciate the input. OK, April it is. :grinning:

Candidly I have really taken a liking to these I bonds. Even if rates fall a little I expect to be in again next year. I love that, given my age, I likely never will have to report the interest my I bonds earn. The bonds will almost surely outlive me.:wink: Thus, for seniors, I bonds provide us a bit of help regarding the dreaded IRMAA.

My failure this year was related to purposeful overpayment of my Federal income tax so I could schnarf up an additional $5k of I bonds with the resultant refund. Need to work on that aspect.

(mostly) off topic:

One thing I have learned in these last several years is the extent to which the IRS does not mind if you overpay your taxes. For some reason, prior, I had the notion they might raise a fuss. I was wrong.

Tax overpayments are great for I bonds and also to make small amounts of money with CC rewards. As Martha would say, tax overpayments are “a good thing”.:grinning:


#66

I would argue that tax over-payments are bad and that it would be preferable to owe at the end of the year. I am not going to retype what is on the internet, but just wanted others to know that the collective wisdom is over-payment is bad.


#67

^^^ unless done to game rewards shortly before filing.


#68

Precisely my point. Guess I was not clear . . . but you surely are! Thanks

I probably should add this caution:

When paying “shortly before filing” it is important to allow sufficient time for the IRS to receive and credit your payment. You do not want to file so soon following a last minute payment to where the amount you state (on your tax return) you have paid does not agree with the amount the IRS is showing in their system.

What I have done is to telephone the IRS and inquire, to be certain my last minute overpayment was received and credited. Knowing that it is then OK to go ahead and file your return.


#69

Last I looked they charge like 3-3.5% for the “convenience” of using a CC. That pretty much sucks up all benefit of most rewards.


#70

Perhaps you should take a new look:

Paying the IRS with a credit card

Even if one has only a 2% reward there is a small profit to be had. For those of us with a 3% reward, somewhat more profit is available, to say nothing of the extra convenience and saving of a postage stamp either way.


#71

Also, Chase Freedom has a 5% category where PayPal is eligible. Pay $1471 for each Freedom you have and earn $46 ($75 - $29) that way. I did it for my estimated tax and extension.


#72

Treasury Raises I Bond Fixed Rate To 0.30%, Highest Since 2009

I Bonds purchased from May 1 to October 31 will carry a composite rate of 2.52% annualized.


#73

For those who are still holding paper i-bonds. Convert!

It took me a few months, but I finally got it done. Converted 7 years worth of paper i-bonds. I did it in batches and used regular mail. Each conversion was completed under two week mark.


#74

What is wrong with holding paper?


#75

The following reasons motivated me to convert:

  1. Less and less banks are willing to redeem the bonds. It is easier redeam online
  2. Dealing with the recovery of paper bonds, should the originals get lost.
  3. Designating a beneficiary should you unexpectedly die.

#76

Any updates?


#77

I might not be up to the moment. But last I heard the USA, despite being tens of trillions in the hole and digging furiously, continues to have sufficient credit to back their I-Bonds.

I-Bonds are only dollar good if the USA remains afloat. Gold, platinum, and silver will remain valuable regardless.

Good and valid question, though, mysteryAgain. Nobody, least of all myself, can blame you for inquiring.:wink:


#78

My questions pertained to the new fixed rate to expect next month.

I appreciate the sarcasm.


#79

Oops. I misunderstood your question! Appreciate your kind response, though. Thanks


#80

From Tipswatch.com: I Bond’s inflation-adjusted variable rate at 2.32%, slightly higher than the current 2.22%