Ibonds: 7.1% return

[npaden]

Saw an interesting YouTube video today that shows a loophole that allows you to go over the $10,000 annual limit.

You purchase additional amounts as gifts for your spouse but leave them in your gift account without delivering them to them. They count against the $10,000 limit for the recipient when they are delivered to the gift recipient.

That way you can take advantage of the high inflation rate now and load up on as many as you want.

Somewhat of a tricky deal and needs some planning but I think I’m going to go ahead and buy another $10,000 for my spouse and have her buy another $10,000 for me for now and then see where inflation goes for the rest of the year. If it looks like it is going to drop back down we just won’t buy new bonds next year and deliver these against our limit next year. The tricky part if you buy a lot is that if inflation takes a dive and the rate goes low it will take you a while to move it out because you will have the $10,000 limit per year on transferring the money over and pulling it out.

Do a search on YouTube for “how to buy more I bonds in 2022”. The channel is DiamondNestEgg.

Do this at your own risk, but it looks like a way to take advantage of this high inflationary based interest rate with a little more money. The bonds in your gift account that haven’t been delivered do earn interest at the current rates and even have their holding limits counting down.

Thought I would share. Nathan

 

[npaden]

I did buy a $10,000 gift bond for my wife today and was still able to setup an account for her and she was able to buy $10,000 for her and then buy a $10,000 gift bond for me. Total of $40,000. Debating buying another $10,000 gift bond for her and another for me. Those wouldn't be able to be transferred and redeemed until January 2024, but would be earning interest the entire time.

The reason these are such a good deal right now is because inflation is high, but hopefully it will run it's course and the rates on these will drop back down in the next year or two. I can't imagine we will be talking about buying these even a year from now. That's the reason it is worth considering to me to load up on a couple more now so they will be earning interest at the current rates.

 

[brymoore]

Do I have to wait until May 1 to get the 9% rate?

 

[npaden]

Yes.

 

[npaden]

Although if you bought today you will still get the 9.6% rate for 6 months, it will just be for the period from October 1, 2023 to April 1, 2023.

The gamble is whether you think the rate on November 1, 2022 is going to be more or less than the current 7.12%.

 

[brymoore]

Hmmm. If I buy today - 7% for six months and then 9% for the second six months. It’s hard not to try to lock in 8% for a year.

 

[npaden]

That’s what I have decided. I’m hoping that inflation is going to be less than 7.12% when the rate is repriced on November 1st.

 

[brymoore]

That’s what I have decided. I’m hoping that inflation is going to be less than 7.12% when the rate is repriced on November 1st.

Wouldn’t you get the next rate regardless after the 9%?

 

[npaden]

Yes. But if you wait until May you won’t get any of the 7.12% rate. It goes straight to the 9.6% rate then whatever the rate is on November 1st.

 

[brymoore]

Yes. But if you wait until May you won’t get any of the 7.12% rate. It goes straight to the 9.6% rate then whatever the rate is on November 1st.

Buying now. 8.36 risk free for 12 months is a tremendous return

 

[jabber]

Just bought $10000 for me today, and looking at getting another 10 for the wife tomorrow to beat that May 1 deadline. That 8% positive beats the almost 12% negative that my 401 is at.

 

[RobG]

Glad to see people able to buy. If you wait until May 1 to buy, PM me your address. That way I can show up at your door and bitch slap you for giving up 6 months of 7.12% followed by six months of 9.6% rate. By now if you can.

 

[ashersdad]

Bought $40,000 today. Thanks for the heads up @npaden.

 

[MarvB]

Think I’m going to try the “hold in the gift box” plan tomorrow. Watched the video twice, seems ligit

 

[EastCoast94]

I was interested in buying some but read online about it being a nightmare to withdraw money from the bonds on treasurydirect. Has anyone had experiences to share of withdrawing?

 

[TheTone]

Dang I feel like a poor reading this!

 

[brymoore]

I was interested in buying some but read online about it being a nightmare to withdraw money from the bonds on treasurydirect. Has anyone had experiences to share of withdrawing?

I’ve sold other treasury bonds with no issues.

 

[FI460]

Dang I feel like a poor reading this!

I was thinking the same thing. I might scrape $1000 together to buy in...

 

[jabber]

I was thinking the same thing. I might scrape $1000 together to buy in...

The way I see it the minimum purchase amount is $25. And you can set up basically an automatic buy amount on any interval you want. I was thinking about setting something like that up for all of the grandkids. As long as the rate is in this area it really is a no-brainer.

 

[MarvB]

We’ve turned a few of the “kid holidays” (birthdays, Easter, Valentine’s Day) into savings bonds and books as their presents rather than just more throw away crap. Christmas is different, my wife says Santa doesn’t do Treasury Direct