By David Enna, Tipswatch.com
Over the last decade, I’ve been a defender of TreasuryDirect despite its dated website, awful tax forms and cryptic communications. In almost all cases, it has worked for me. Acceptable and most importantly, secure.
But now, weighed down this week by massive demand for U.S. Series I Savings Bonds, the site has repeatedly gone dead, failed to load, loaded a page or two and then stopped. Thousands of potential Treasury customers are furious, and some of them weren’t even looking to buy I Bonds. I’ve heard from people trying to place an order for a 4-week Treasury auction yesterday, but were locked out.
The Wall Street Journal reported yesterday that just in the final week of October, the Treasury issued $1.95 billion in I Bonds, more than the total for fiscal year 2021. In one year, 3.7 million new accounts were created on the site, more than the 2.4 million for the prior 10 years combined.
Why is demand so high? Because the I Bond’s variable rate will reset from 9.62% to 6.48% on Nov. 1. (The fixed rate could also change, but that is uncertain.) People who lock in an I Bond order before Nov. 1 will get 9.62% annualized for six months, and then 6.48% for six months. That adds up to a compounded return of about 8.2% over 12 months. Even if the investor sells after 12 months and takes a 3-month interest penalty, the return would be over 6.5%. That’s very attractive.
TreasuryDirect has responded to this overwhelming demand by posting this message on its homepage (viewable when you are lucky enough get to the homepage):
“We are currently experiencing unprecedented requests for new accounts and purchases of I Bonds. Due to these volumes, we cannot guarantee customers will be able to complete a purchase by the October 28th deadline for the current rate. Our agents are working to help customers who need assistance as quickly as possible.”
This message is typically cryptic, because it’s impossible to tell if it means all electronic orders are at risk of not being filled, or is it addressing issues with its customer service staff trying to answer phone calls dealing with purchases and account set ups?
Elsewhere on the site, TreasuryDirect says:
“You must complete your purchase and receive a confirmation email by October 28, 2022, at 11:59:59 PM ET. I Bonds purchased by this deadline will have an October 1st issue date. You will receive the published rate for six months (i.e., October – March).
“Due to high volumes, we cannot guarantee that your bond purchase will be completed before this deadline if your account or purchase requires additional customer support for issues such as identity verification.”
That statement seems to imply that it is people needing human customer support that are most at risk of not completing the purchase. But I’ve heard from many people with active TreasuryDirect accounts who have been able to get into the site, get all the way to the I Bond purchase confirmation page, and then have the site crash. Repeatedly. Those people haven’t completed the purchase and can’t complete the purchase. But they need to keep trying.
TreasuryDirect says you must receive a confirmation email to confirm your order has been placed.
Today — Friday, Oct. 28 — is the day TreasuryDirect originally said would be the last day to place an order to be assured of getting an October-dated I Bond and that 9.62% for six months. I had been recommending making the purchase by Wednesday, Oct. 26, but unfortunately that is the day TreasuryDirect started crashing.
What happens after Oct. 28? This is what TreasuryDirect says:
“Due to processing and payment settlement timeframes, bonds purchased in TreasuryDirect October 29 through October 31 will be issued in November. As a result, these bonds will receive the rate announced by Treasury on November 1. This rate will still be applied for the next six-months (i.e., November – April).“
What TreasuryDirect needs to do
No. 1. Commit that all I Bond orders placed by midnight today will be recognized as October-issued I Bonds. This is an electronic system, so you know when the order was placed. You need to honor your statement that Oct. 28 orders would be completed before Nov. 1.
No. 2. Have Treasury staff work this weekend to continue helping customers set up accounts and complete orders. Make sure communications are going out to customers who have completed orders. Extend that Oct. 28 deadline for all people who have made good-faith attempts to complete the purchase by Oct. 28.
No. 3. Repair your website so that this sort of problem never happens again. TreasuryDirect is the only place an investor can buy an I Bond. It needs to work, no matter the demand.
• Confused by I Bonds? Read my Q&A on I Bonds
Friday evening update
TreasuryDirect is closing down for maintenance this weekend, but that still doesn’t mean that I Bond orders completed by 11:59 p.m. won’t be accepted as an October issue. This is from a Barron’s article:
The Treasury’s website will undergo maintenance this weekend after record demand for series I inflation-linked savings bonds strained the system. Work on the TreasuryDirect website will start at 12 a.m. Saturday and continue until 11:59 p.m. Sunday Eastern Time.
During that period, individuals won’t be able to use the account management system that allows purchases of I Bonds. The rest of the site will be up and running.
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Feel free to post comments or questions below. If it is your first-ever comment, it will have to wait for moderation. After that, your comments will automatically appear.
David Enna is a financial journalist, not a financial adviser. He is not selling or profiting from any investment discussed. The investments he discusses can be purchased through the Treasury or other providers without fees, commissions or carrying charges. Please do your own research before investing.
Treasury Inflation-Protected Securities 
TreasuryDirect.com website is a terrible website with regard to getting your account information. No financial institution is so bad and try to imagine any institution not doing the following:
1) No monthly statement so you can see how they arrived at your updated value or the history of your account.
2) No way to see the actual value of your account without the 3 month penalty.
3) No way to see what your current principle is.
What other institution makes it so you have to accept their calculations with no way to see if everything is correct, as if there is no way they could make a mistake. You have no way to hold them accountable
Most of the time you can see the actual amount of your account without the penalty. Just fast forward 3 month the date of redemption when using the savings bond calculator. For instance suppose you bought in April 2022 and it is May 2023 The calculator will give you the amount of principal and interest as 1000 +68.40. Now if you want w/o penalty put the redemption date as August 2023 (May +3). and the result is what you are looking for 1000 + 91.20. It is not so simple when looking at 1 or 2 months before November of the current year but nevertheless it can be done.
Pingback: 2022 in review: Scary year for inflation, better year for inflation protection | Treasury Inflation-Protected Securities
As an earlier poster said, this situation seems just like usmint.gov, whereby limited edition coins cause incredible retail interest and incredible loads on its servers. The site becomes totally unusable and tens of thousands 0f collectors miss out on that special coin.
I understand David’s and many other people’s frustration here, but I’m in two minds a bit. Yes, I do think that TD was unprepared for the surge in demand for I Bonds this October and I do agree with the premise 0f David’s commentary here. But by all accounts demand was unprecedented, and I’m not sure what else TD could have done without a complete overhaul of its systems (maybe that’s what is going on right now?). Maybe TD needs another 80,000 employees like the IRS?
On the flip side, everyone has known about the 9.62% for six months now. Why leave it to the last minute to buy? Sometimes people are their own worst enemies. In my opinion, the interest earned by keeping your money in the bank until say the 25th of the month (at which point you send it to TD to buy your I Bonds) is so negligible, even on $10,000, it’s not worth the risk of missing out.
As for why people leave it until “the last minute”, it isn’t just the amount of savings by holding it in your bank until the 25th. Many people want to know that the “next 6 months” variable rate will be before deciding, which means waiting until at least mid-October for the final CPI numbers needed to calculate that rate come out.
And let’s face it people have a tendency to be lazy. They don’t all jump the minute those CPI numbers come out. They procrastinate and put it off and before long it’s literally the last minute for them to make their purchase. It’s completely understandable human nature (or as you say “they’re their own worst enemies”).
The OTP from Treasury direct tooks almost one hour to arrive this morning. Something is wrong, it used to arrive right after I typed in my account number.
I logged in today, just to check if the site was working, and it went smoothly, but I didn’t have to do the two-factor authentication. Hope this won’t be a new problem.
Yes, I am afraid it is a new problem. At least it is for me. I hope it will be fixed soon. I did let Treasury Direct know.
I logged in today from two accounts mine and my wife’s.
Everything went swimmingly.
I see only two main changes.
a) You need to get an OTP every time, regardless if you have registered the computer or not.
b) The password now is CaSe SensiTivE
Overall I’m happy with the changes.
The Treasury Direct website is a 1980 website trying to operate in the modern world, some 40 years later. The recent makeover was just cosmetic. A very simple solution would be to allow the purchase and redemptions of I-bonds using brokerages (like Schwab, Vanguard, Fidelity, etc.). This would operate just like brokerages buying and selling Treasuries (most brokerages charge no commission to buy or sell Treasuries). Then I, for one, would never have to use Treasury Direct.
Note, I-bonds used to be sold and redeemed at banks, but those days are long gone. They are way too much trouble for banks. I remember a teller looking at a large piece of paper to see how much an I-bond was worth when I was redeeming. But it is all computerized today.
A bigger problem is the $10,000 annual limit per social security number. Don has shown how opening a bunch of LLC’s allows a virtually unlimited amount of I-bonds to be purchased by an individual in any given year using only that individual’s social security number. Treasury should remove the $10,000 annual limit completely as it unnecessarily burdens purchasers who don’t want to pay the sometimes huge fees to start an LLC (the fees are set by the state you live in and range from $40 to $500, plus renewal fees, plus other crazy things like publishing the event in a newspaper for some states).
Finally, a set formula which calculates the fixed rate should be created and revealed to the public. The formula could change over time if necessary, giving the public a six month’s notice. After all, it is government of the people, by the people, and for the people.
I spent hours just trying to create an account. I typed in all information at least 12 times but every time crashed before i got through all the steps. So frustrating!
I placed my order on Oct 28. But my purchase was automatically scheduled for Oct 31 (the next business day). I got an email titled New Purchse – stating a purchase has been scheduled on Oct 28. Does that mean I qualify for the 9.62%?
You should be good
Check your bank account on Monday. If your I-Bond purchase shows up then the purchase occurred on 10/28 and settled on 10/31 for you to receive the 9.62% rate.
❤️
On the positive side, I do think the volume of new accounts and people accessing the Treasury site for the first time is a good sign too.
It is opening up new options for investors who may not be aware of the Treasurydirect and options to purchase different products(outside of I-bonds) from the main source.
The Treasurydirect site performance issues of course are not a real positive, but the site may just help to educate people. they have additional options
TreasuryDirect has been attempting for years to raise investor knowledge of its site and especially the Savings Bond offerings designed for small-scale investors. It got its wish x 100.
Conflicting thoughts here. On the one hand, I agree the site was mostly a dinosaur. And not being there when people most need it is in fact a massive failure.
But then again, I don’t exactly excuse Americans for late decision making and yield chasing. Investing should be slow and steady, and smart decisions made in advance. Any American with a pulse and brain would have known about inflation and savings bonds for months now.
The government is reflective of Americans, and Americans are reflective of the government. The screw up is on both ends.
After years of suffering through 0.05% interest rates on savings, it’s understandable and logical that small-scale investors would flock to a very safe investment offering a substantial yield. The good thing is that 2022 has proven the value of I Bonds: Beyond the immediate 6- or 12-month return, they protect you from future unexpected inflation.
To be fair, most Americans are/were unaware of I-bonds. For example, while I certainly knew about EE bonds for decades (having been given some by my parents when I graduated High School) I didn’t even know I-bonds existed until about 3 or 4 years ago when I happened to stumble across an article about them on the net.
Even as soon as 1 year ago, if you had asked a random stranger on the street about them, they likely wouldn’t know what you were talking about (heck you’d probably still find more people that don’t know than do if you tried the random person test today). It’s only in the past few months that articles about I-bonds seem to have become ubiquitous on mainstream news outlets that the great unwashed are likely to see. And while getting the article within sight of someone’s eyeballs is a good first step, it doesn’t actually guarantee that the person will read it, let alone immediately act up what they read.
About a year ago, someone mentioned I Bonds on CNBC, and Becky Quick said, “What is an I Bond? I’ve never heard of that.” (Of course, I have been writing about I Bonds for 11 years. The message is finally out.)
Yes, certainly more people are aware of them now then ever before thanks to the increase in mainstream news coverage of late (though I have to point out that CNBC is a bit of a niche cable channel with a small viewership, just below Sundance TV and just above National Geographic Wild in viewership numbers) Hence the surge in purchases that have so overwhelmed TD lately. The message is definatly getting out there, I’m not as sure that the majority of the masses have as yet heard/listened but it’s not from a lack of coverage.
It’s interesting what people will go through for what is really a very little amount of money. I recently bought a 3-yr brokered CD at 4.7% instead of the I-Bond. How much money did I lose? Assuming I would have redeemed the I-bond in 12 months, I lost the difference between 6.5% and 4.7%. For $10,000 that would be $180 or $360 for two I-bonds or $20,000.
However, in the long run, the CD might be a better investment than the I-bond because I know I am getting 4.7% in years 2 & 3. The people buying I-bonds have no idea what they will get after year one.
CDs combine well with I Bonds and TIPS, but they are not the same investment. A CD offers a guaranteed nominal return, and TIPS and I Bonds offer a guaranteed real return. If inflation remains at 6% for years, your CD will under-perform. If inflation slips to 1.5%, the I Bond will under-perform. I think nabbing CD rates at 4.7% is a wise move, while you can.
Every penny counts.
Don’t forget the tax benefit of IBonds as well. Interest earned on I bonds is exempt from state and local taxation, and owners can also defer federal income tax on the accrued interest for up to 30 years.
I’m going to cut TreasuryDirect a little slack for not being able to handle the unprecedented traffic. As many media outlets have been reporting (including the WSJ story referenced here), statistics on new accounts and demand for IBonds is just flat out crazy. I don’t think I can fault them for not anticipating the volume they are seeing. It’s eye-popping.
Based on normal use over the years, they didn’t ramp up capacity the site can handle because it was more than adequate. Now they are going to direct resources so they can handle current demand and will be overkill when rates go back to more normal levels. 0% fixed, 1.75% variable and people will bail and say IBonds are dead money and for fuddy-duddies.
I agree that maybe they should accommodate customers that get in their orders by 11:59pm on Monday. And I understand the frustration on the parts of some, but looking at it from their end, I don’t think they were asleep at the wheel.
My $0.02.
My main problem is if you prominently posted on the site (a week ago) that orders placed by midnight Oct. 28 would be honored as October issues, then you need to honor that deadline. No excuses.
So it’s due to the transaction processing through your bank account a day later that disqualifies Monday from being a valid purchase day?
This can all be avoided of course by buying earlier in the month, but it’s really not that difficult for the government to honor the day of purchase.
Look at the time stamp. Uncle Sam will get his money.
Treasury Direct just needs more servers to handle the traffic. I have been using Treasury Direct since “the beginning”. It works fine and most importantly it seems pretty secure – until the last few days. Like most, I cannot get in. Someone at Treasury needs to approve purchase and setup of additional servers.
TD needs to expand its capacity to handle the occasional large volumes of activity, and make good on their failures as they impact customers. TD needs to hire a professional web site design team to fix their very poorly designed website. But it is a government agency, so don’t expect much. Unfortunately they are the only game in town when buying or selling savings bonds (they have no competition so the recent mess is what we end up with). Otherwise I would take my business elsewhere (we used to be able to buy and redeem savings bonds at almost any bank). I use a broker to buy and sell Treasuries, not TD.
The Treasury’s website will undergo maintenance this weekend after record demand for series I inflation-linked savings bonds strained the system.
Work on the TreasuryDirect website will start at 12 a.m. Saturday and continue until 11:59 p.m. Sunday Eastern Time.
Thank you very much for your excellent (and very accurate) report. I greatly appreciate it.
For the record, I Was able to buy some I Bonds yesterday (27 October) but only after having the website crash on me numerous times, forcing me to log on again (over and over).
Please keep up the great reports!
Get over it. We had months to decide that 9.62% was a good rate. No site can handle millions of inquiries in the final hours of an offer.
I got a new account registered late night Tuesday for a Trust.
I have to agree. There was no need to procrastinate.
Remember: “The early bird gets the worm”.
In defense of people who waited: The traditional purchase advice for I Bonds is to wait until near the end of the month, because you still earn a full month of interest. And in October 2022, your cash is actually earning 1% or 2% as it sits, waiting to be invested. The Treasury posted that purchases had to be made by Oct. 28. I suggested Oct. 26, to be safe, but even then the site wasn’t working properly.
Thanks. But also agree with the other posters, too, whose points are well taken. The site was crashing a lot Weeks ago.
If everyone had anticipated this, and got on the site back when YOU did, then… the site would have been bogged down inoperable when YOU tried to use it.
The site needs to handle the traffic, and if it can’t, then the deadline needs to be extended.
(Note: this didn’t affect me at all. Still, I have plenty of other issues with TD.)
Thankfully I was just able to purchase an I-Bond on Treasury Direct; I mention it only in case someone was thinking of giving up. (The purchase was a gift, which I’d never done before on TD; hopefully I did it correctly…I think that I’ll be able to find out on Monday.)
Bureaucracy and big government. Did we expect anything different? Reminds me of my experiences on dmv. ca.gov, irs.gov, etc. After I while I just gave up.
Everyone needs to dial down the disappointment and manage their expectations. I got to hear Rachel Wilson (was NSA now with MS) speak at the NASPP conference last week. After the talk I realized just how hard the task we are asking TD to perform. We want a frictionless experience buying treasuries but so do thieves. In addition nation states target the portal.
No they don’t.
What TD is doing is actually a pretty simple task.
Log transactions received and post them in a timely manner.
I worked in IT for over 30 years and that’s not asking much.
As far as security issues goes, TD has that covered.
They simply deny any responsibility if your account gets hacked.
Only the government could get away with that!
My challenge with the cumbersome website is that I recently switched banks. All of the other online financial institution where I have accounts makes updating bank information easy and quick. Not so with TD.
To add a bank account or change a primary bank account TD requires you to print a form, fill out the new bank info, go get a signature guarantee including a signature guarantee stamp at a bank, mail the form through USPS, and then wait for Treasury Direct to get back to you.
While having gotten into the website yesterday, I can’t edit the primary bank in my account to then facilitate an I bond purchase. We recently changed banks after moving. The current bank account on my TD account is closed. I’ve done a lot of bank updates on other financial websites – all were quick and easy.
TD is certainly a dinosaur in this realm.
Unfortunately, more secure means harder to use. I am glad Treasury is so cautious.
The take-home lesson for me is this… only keep “forever banks” attached to TD. For me that’s Ally, Schwab, Fidelity. Not my local credit union. Dinosaur does not begin to describe it.
I have had the same surprise.
But, this week I noticed, Treasury Direct now posts a phone number and states some bank changes can be made by phone.
In contrast, I opened a new TD account, linked a new bank, and had a bank debit next day. Don’t know why some changes require a paper form or phone call, while the original account is simply debited.
One lesson to learn from your experience is to make sure you don’t close a bank account until you’ve taken care to redirect any needed links to it (and it’s not just TD, but your direct deposit, bill pays from other institutions such as credit cards, etc.). because if you forget one, you could find yourself with some unwanted difficulties (where did my pay go? How come my credit card auto pay didn’t pay? etc.)?
I mentioned a few weeks ago that I only use Treasury Direct for buying and selling savings bonds (no other choice). I always use a broker for buying and selling Treasury bills and notes, and this current computer mess is just another good reason to avoid TD. I had the usual problems everyone else had this week, so I decided to wait until 10 pm PST (1 am EST) and was able to make the I-bond purchase and get email confirmation in maybe three minutes, despite TD’s antiquated and inadequate computer system.
I had some other issues where I needed some TD forms, so after a two hour wait early last week, an agent answered. She could not get the forms I needed from the TD computer because the TD computer was down. Fortunately she had some paper copies which she rustled through to help me with the issues. I had downloaded the forms a few weeks earlier so I could see them on my computer, but a TD agent could not see the forms on her computer.
Finally, the public should be able to buy I-bonds with a start date of October 2022 on MONDAY OCTOBER 31 2022. Monday is not a federal holiday. The transaction does not take long (if the TD computer is working). I bought my I bond last Wednesday night and it only took a few minutes to buy the I bond and get email confirmation. So why is TD telling us that Friday October 28 is the cut-off date to purchase October 2022 savings bonds? I think that is illegal.
Avoid TD if you can until TD joins the 21st century. Brokers do not charge a commission to buy or sell Treasury bills, notes, or bonds (FYI, you can buy them using TD if their computer works, but you can never sell them using TD. You have to transfer them to your broker if you want to sell them).
Patrick, the next business day of your I-Bond purchase is when the money is deducted from your account. In another words, your I-Bond purchase is settled or complete. That is why today, 10-28-22, is the last day to purchase I-Bonds for Oct 2022 because it will settle on Monday, 10-31-2022. If a person buys the I-Bond on Oct 31st, it would settle on Nov 1st and the interest rate changes would be in effect for your November purchase.
Thanks Ming. I have not read about settlement dates for savings bond purchases on the TD website. I understood once you received the confirmation email that the transaction was complete. Note that I received my confirmation email a few minutes after I bought the bond. Note also that the money to pay for it comes out of one of my linked bank accounts. I have zero money in a TD non-interest bearing account. I just now tried to search “settlement” on the TD website, but of course the TD computer is down. I will explore further next week, assuming the TD website is working then.
If you are correct, then the old adage “wait to buy savings bonds until the end of the month” has to be changed to “wait to buy savings bonds until the end of the month minus one business day”.
Check the history on Treasury Direct for any of your securities.
The actual purchase date is always the next business day after the purchase is entered.
And that is when Treasury normally collects its money.
What is described is exactly what happened to me and the treasurydirect site crashed at least ten times for me. But, I did not give in. I kept at it and eventually was able to complete the purchase.
I have had an account for decades. After sign off it asks your opinion of the website. I always put “poor” and the percentage of “poor” never went above 3%…… maybe if people stopped applying a dismally low standard to the web site they would have noticed earlier how bad it is…..
I’ve been buying iBonds for 10 years. So earlier this year, 4 years after I opened some some proprietorship accounts, t direct finally comes back to me to query some of the registrations. There’s no way to speak with them. Emails are ignored and written correspondence takes months. In the meantime my accounts are frozen and I do not have access to my money. If this were a private business, fraud charges would be laid!
How about organizing a campaign to write to our congressional representatives to fix this? The IRS takes month to process returns, and the treasury can’t handle a simple savings program for citizens. It’s a national disgrace.
Yes, I filed my tax return February 16 and was getting a 5k Ibond, but the IRS was swamped and didn’t process my return until August and that is the date on my Ibond. Government theft IMHO.
I took your advice and got in before Wednesday. I did a giftbox for wifey 10/25 and used her account to giftbox me 10/26 with no issues.
Squawk Box had a segment about the issues on their show this morning. Stated Treasury sold 1.95 billion dollars worth of I bonds in the last week of October more than the entire fiscal year of 2021.
Also, Treasury would not be extending deadline as doing so would threaten the operational integrity of the system…..more like they don’t want to pay the increased interest.
Greetings from Colorado David:
I completely AGREE with you. I too have been and continue to be a STRONG supporter and defender of TD despite its JURASSIC platform and recent mediocre website upgrades.
The platform provides me with what I need to complete a transaction in a predictable and SECURE environment. However, the events of last couple of days are UNACCEPTABLE (big reason why current rating went from 62% to 60%. It takes a lot of unhappy customers to move this needle).
In addition to your enumerated suggestions, it would also be very helpful for TD to massively expand the capacity of its servers. The site should NEVER crash regardless of demand.
P.S. When the site works, it does it efficiently and like clock work.
This is such a classic case, and you are so right to excoriate it. I gave up on TDirect years ago, because while I could figure it out eventually, I was paranoid (reasonably so) that my heirs would get confused, and get no help from TD in figuring out what was they were owed, and I’d end up leaving a lot of money to the Government. Even if the new website is more user friendly than the current one, the same uncaring personnel may likely be behind it. That announcement you so aptly criticize is exactly the type of non-accountable customer service that I expect from now until the end of time from such an entity. Many government websites are much improved nowadays, but TD is government at its bureaucratic worst.
It is the federal government-outdated; using antiquated systems. Fortunately, I thought this crash would happen so I made my final purchase on Oct 21st with no issues. With more and more people realizing the value of purchasing I-Bonds, best to purchase earlier in the month than later in the month like I had been doing.
Excellent move making the earlier purchase.
We finally agree on something. TD site is worthless. Lets pile on! Its an Estate planning nightmare unless you got a trust. Why do they give me paper bonds for my tax return? Why are my converted bonds hidden in a back page? I’m done with any new purchases, until they raise the fixed rate.
I am considering overpaying my 2022 estimated taxes by $5000 in order to buy paper ibonds in 2023. With intention to convert electronically. Is this difficult or somehow not worth the web site hassle?
This should work fine. Keep in mind you will be receiving the new fixed rate and variable rate, to be set Nov. 1. I think this process bypasses TreasuryDirect completely, so no website hassle. Info: https://www.irs.gov/refunds/using-your-income-tax-refund-to-save-by-buying-us-savings-bonds
Thank you!
i did this on my 2021 return. you have to file a Form 8888 which directs the IRS on how to allocate your “refund”. One section of the form relates to buying I Bonds. Here’s more info. I don’t know if my bonds have yet been purchased. https://www.irs.gov/pub/irs-pdf/p5381.pdf
Thank you Bill for the link, for different reasons. I had forgotten they are for 30 years, now I may be not make that that since I am 87, but I started buying in 2000. At that time the fixed rate was over 3% and you could buy 30k, so I put my savings in it. I have followed Tipswatch for a long time, the best info you can find. Hanna
This is obvious, but if you intend the hold the bonds for a long time, there is no rush to convert electronically.
I have done the conversion process though as some bonds approached maturity and it wasn’t much of a hassle. Just carefully follow the instructions provided on TD. Mail the bonds to the address either Certified or Priority Mail or both. Then, after some time, the bonds will appear in TD in a separate account from securities purchased directly. You will have to generate a separate 1099 at tax time from this account for the year the bonds are sold or mature.
I started with a few low denomination bonds the first time to get the feel for it.
Smart!
I have been purchasing the extra $5,000 of I bonds through my tax return for years. I do so by increasing the federal tax withdrawals through my employer’s payroll, usually increasing my federal tax withholding around October, and then reverting it back to normal in January. As Bill already mentioned, you will need to complete IRS Form 8888 with your tax return, which designates how much of your tax return will be issued as Series I Bonds.
The process of purchasing I bonds through a tax return bypasses Treasury Direct completely. In my experience, the paper bonds show up in my mail box approximately 8 to 10 days after my e-file tax return has been accepted by the IRS. Typically, I have received a total of $5,000 as 12 separate paper bonds in the following denominations ($1,000 ; $1,000 ; $1,000 ; $1,000 ; $500 ; $200 ; $50 ; $50 ; $50 ; $50 ; $50 ; $50). However in 2022, I received a single $5,000 paper bond.
I have never converted any of the paper bonds to electronic form. But if I should need the money, I can just take a paper bond to my local bank to be cashed.
My mail delivery isn’t always reliable. I wonder what might happen if TreasuryDirect mailed me paper bonds but the mail carrier failed to deliver? Do they send certified mail or ? Thanks!
No, they do not send certified mail. But a particular white government envelope is used which might get more attention. I share your unease about the occasional unreliability of mail delivery. It is one of those things if you want the paper bonds you just hope doesn’t happen with this. If the bonds never do arrive, I guess you would go through the procedures for lost bonds.
Thanks for your comment. I’ll look into procedure for lost bonds before I purchase. Mail delivery is abysmal in my city.
Have you tried cashing one recently? I went to my local bank a few years ago and they said they no longer cashed them and to try Bank of America. I was surprised because I assumed that all banks being federally regulated had to cash US savings bonds at least if you have an account. That is when I started electronically converting some of my paper bonds.
From the TrDir website: “At a bank: Banks vary in how much they will cash at one time – or if they cash savings bonds at all.”
This is the same exact thing that happens when the US Mint issues certain coins that are in high demand. Sometimes sold out in a matter of 10 minutes. You get all the way to the end the coins are in your cart you think all the info went in and Bam you get the error bad gateway. Happens still to this day. Collectors get use to it since they have no other choice.
“The government”! Good to know! Thanks for posting!
Agree that is unacceptable, though I had no trouble at all with an online purchase on 10/25.