[retiredguy123]

To clarify, the I bond interest rate changes every 6 months, and you must keep the bond for 5 years or forfeit 3 months of the interest. So, for example, assume that you buy a $10,000 I bond in January that pays 7 percent, and the interest rate stays the same for one year, and then you cash in the bond. Note that the interest is compounded semi-annually. You will receive about $10,534 for the bond, of which $534 is taxable income at your ordinary income tax rate. So, the actual interest rate you receive is about 5.34 percent before taxes because you forfeit 3 months of the interest. In order to receive the entire 7 percent first year interest rate, you would need to keep the bond for at least 5 years. The interest rate for years 2 through 5 is unknown because it changes every 6 months. Just doing the math.

[rustyp]

Originally Posted by Babubhat

Qyld and Xyld generate ten percent. Bond limits too low to be material to me

Originally Posted by retiredguy123

To clarify, the I bond interest rate changes every 6 months, and you must keep the bond for 5 years or forfeit 3 months of the interest. So, for example, assume that you buy a $10,000 I bond in January that pays 7 percent, and the interest rate stays the same for one year, and then you cash in the bond. Note that the interest is compounded semi-annually. You will receive about $10,534 for the bond, of which $534 is taxable income at your ordinary income tax rate. So, the actual interest rate you receive is about 5.34 percent before taxes because you forfeit 3 months of the interest. In order to receive the entire 7 percent first year interest rate, you would need to keep the bond for at least 5 years. The interest rate for years 2 through 5 is unknown because it changes every 6 months. Just doing the math.

And that I consider a good deal. As others have pointed out it is a very small amount that is allowed to be invested. So I do it as part of a very multifaceted portfolio.

I consider this portion of my portfolio the dime hidden in the back of my wallet in case I ever needed to make an emergency phone call.

[irishwonone]

Originally Posted by dewilson58

Think what would happen without an annual limitation......$11B would be a drop in a bucket.

Less debt to China.

Exactly. There’s been some recent discussion about expanding those limits. Not holding my breath though.

[bragones]

Considering many households are couples and the $10k annual limit is per person, the investment amount for couples is $20k annually...a little better.

[rustyp]

Originally Posted by bragones

Considering many households are couples and the $10k annual limit is per person, the investment amount for couples is $20k annually...a little better.

You can also gift each other a bond of 10K apiece - now up to $40K.
Then you can also buy $5K using your tax refund - now up to $45K is possible.

CAUTION - get an education on the limitations of the above two items some call the back door. However it is legal.

[Chi-Town]

Bought 3 max in 2001 and put them in a drawer. Never thought about buying more until this thread. Will buy the limit again. Thanks.

[Michael G.]

I'm also invested in a I-bond a year ago, but remember, CD's will be on the upswing again in 2022

[dewilson58]

Originally Posted by Michael G.

I'm also invested in a I-bond a year ago, but remember, CD's will be on the upswing again in 2022

Not much of a swing, more like a bunt.

[Michael G.]

Originally Posted by dewilson58

Not much of a swing, more like a bunt.

2022 isn't over with yet

[TNGary]

Anyone verified the back door concept? appreciate the post

Originally Posted by rustyp

You can also gift each other a bond of 10K apiece - now up to $40K.
Then you can also buy $5K using your tax refund - now up to $45K is possible.

CAUTION - get an education on the limitations of the above two items some call the back door. However it is legal.

[rustyp]

Originally Posted by TNGary

Anyone verified the back door concept? appreciate the post

https://www.youtube.com/watch?v=bSoZJJypSAQ

[Altavia]

Hmm, this guy thinks that if you have a trust, you can buy another $10,000 per year under the name of the trust.

Buy More I Bonds in a Revocable Living Trust

[Altavia]

Originally Posted by rustyp

https://www.youtube.com/watch?v=bSoZJJypSAQ

Very interesting. What happens to bonds not transferred if the purchaser dies before transferring the bonds?