I Bonds!

[ppnewbie]

I think that I bonds will never get much recognition.

The very fact that they carry a 0.00% expense ratio means that banks and brokerage firms will never have any incentive to advertise them. In fact, they have every reason to instruct their legions of financial advisors NOT to advertise them.

I also wonder if the treasurydirect.gov website is kept looking like it was constructed in 1990 on purpose to keep individual investors away. Years ago I stumbled on the site and thought there was no way that the treasury site of the most powerful country in the world could be such an amateur operation (at least in appearance). So I stayed away until a few years later I found out it was legitimate.

[jhogue]

I don't see anything particularly sinister about the clunky nature of the TreasuryDirect website. I think it has, roughly speaking, the efficiency of your average state department of motor vehicles. Nobody is enthusiastic about it, but nobody wants to put up the money it would take to make substantial improvements in how the system operates.

The Treasury Department faces cross-cutting pressures to both reduce spending and serve the general public. Once upon a time you could buy a 30 year Treasury bond with detachable paper coupons. Not any more. They continued to be serviced, but no more of them were sold at some point. Now they have been completely phased out. That is the common history of these programs.

A number of years ago Treasury wanted to end paper savings bonds in favor of e-bonds only. Some members of Congress objected that this would disadvantage their lower-income constituents who did not have ready access to computers or did not have bank accounts. They ordered a GAO study that recommended the continuation of the legacy program of paper I bond sales through IRS refunds as a compromise solution. That is how we got the current hybrid system of paper bonds and e-bonds. Be sure to send a thank you note to all the sausage makers up on Capitol Hill.

[barrett]

For those of you who have bought I-Bonds from the Treasury Direct website, do you pay with a credit card, do a transfer from a bank account or use some other method?

Up till now I have been a bit overweight savings bonds (a good problem to have) but will be redeeming a bunch of EEs over the next three years and want to stay ahead of the curve.

Thanks in advance for any help!

[vnatale]

For those of you who have bought I-Bonds from the Treasury Direct website, do you pay with a credit card, do a transfer from a bank account or use some other method?

Up till now I have been a bit overweight savings bonds (a good problem to have) but will be redeeming a bunch of EEs over the next three years and want to stay ahead of the curve.

Thanks in advance for any help!

I just bought a few weeks ago. I cannot remember if there was a credit card option. But I'm sure that if there was there would have been a fee associated with it.

I gave them my bank's routing number / my bank account number and had the purchase withdrawn from that account.

[jhogue]

barrett,

1. There used to be a credit card purchase option for savings bonds
at TreasuryDirect, but that program expired a number of years ago.

2. Savings bonds can be redeemed in two ways now. The first is by electronic transfer from your Treasury Direct account to your bank account. My local bank still redeems paper bonds for me. Some banks still do that; some don't.

3. Depending on the year you bought them, EE bonds double in value at a date specified at the time of purchase. EE bonds stop paying interest at 30 years, so there is no point in holding them any longer than that.

[barrett]

Thanks Vinny & jhogue. Much appreciated with the Treasury Direct info!

3. Depending on the year you bought them, EE bonds double in value at a date specified at the time of purchase. EE bonds stop paying interest at 30 years, so there is no point in holding them any longer than that.

Just one thought that applies to my situation. It may be advantageous to hold some EE bonds past the 30-year mark if it allows one to push some interest back a few months into another calendar year. I bought a bunch from 1991 to 1993. A few from 1991 I cashed in a bit early. Some that I bought in 1993, I may hold off on redeeming until January of 2024.

Incidentally, I have never had an issue redeeming paper bonds at a bank. My experience is that the funds are available in my checking account immediately.

[jhogue]

Thanks Vinny & jhogue. Much appreciated with the Treasury Direct info!

3. Depending on the year you bought them, EE bonds double in value at a date specified at the time of purchase. EE bonds stop paying interest at 30 years, so there is no point in holding them any longer than that.

Just one thought that applies to my situation. It may be advantageous to hold some EE bonds past the 30-year mark if it allows one to push some interest back a few months into another calendar year. I bought a bunch from 1991 to 1993. A few from 1991 I cashed in a bit early. Some that I bought in 1993, I may hold off on redeeming until January of 2024.

Incidentally, I have never had an issue redeeming paper bonds at a bank. My experience is that the funds are available in my checking account immediately.

barrett,

1. An EE bond reaches final maturity at 30 years. When it matures, it results in a taxable transaction that generates an IRS form 1099-INT for that year of maturity. TreasuryDirect will report your interest earned to the IRS. You can spread out your bond redemptions before 30 years, but not after.
See:
https://www.treasurydirect.gov/indiv/he ... rnMore.htm


2. My local bank has always redeemed my paper savings bonds too. I like dealing face-to-face with my local banker, rather than some interchangeable drone at MegaBank.