Are I Bonds the Best Place To Park Short Funds?

You can buy 10k bond a year. Your wife can also buy 1. You can buy a gift bond (including one to your wife and she to you). I think you can buy more through other loopholes, but it's a pain. The Treasury Direct website was not user friendly, not my fault. It's glitchy, and they admit that. I had to jump through hoops and do foot work off site. They said I was a special case, but there is nothing special about me. Believe me. I'm just a regular person. Having said that, I like I Bonds when they are paying well, which they currently are. I own 3. I cashed one in once at my bank, and it was easy as pie. But I've heard it's not as easy anymore. I wouldn't worry about losing money on an I Bond though. No one has ever lost any money in I Bonds.
 
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Turns out you can buy an additional $10K bond per annum if you happen to have a trust. (I tried it and was successful.)

There's also a way to buy a $5K paper I bond if you overpay your income taxes, but I'm fuzzy on how that works for people who are married and file jointly. Will figure it out before the end of the year.

There's info on the internet about buying gift bonds.
 

I suppose if you just need to get your hands on $5000, you could cash one in and still have $5000 drawing interest. @Patricia I never thought about this until you asked the question. I don't think there is an advantage of owning one $10k rather than two $5k, except you have less stuff to think about it, maybe.
 
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My aunt put her house in a trust for me. She died years ago, but it seemed like a good way to set up an inheritance. My sister got bonds and other things, and she had to wait for probate and pay taxes. But my aunts house became mine the day she died. A lawyer handled her estate as a pro bono service, but she consulted me on most issues. My aunt was a lawyer, and she did a lot of pro bono work, so her lawyer just handled everything at no charge. Not sure why. Maybe lawyers do that for each other.
 
JustDave said:
I suppose if you just need to get your hands on $5000, you could cash one in and still have $5000 drawing interest. @Patricia I never thought about this until you asked the question. I don't think there is an advantage of owning one $10k rather than two $5k, except you have less stuff to think about it, maybe.
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Yes, that makes sense.
 
You can cash in just part of a bond held electronically. I copied below from the TD website.
https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iredeem.htm

Electronic bonds in TreasuryDirectYou can cash a minimum of $25 or any amount above that in 1-cent increments. If you cash only a portion of the bond's value, you must leave at least $25 in the TreasuryDirect account. Redemptions are comprised of principal and interest. (In a partial redemption, we pay interest only on the partial amount you cash.)
 
My sister inherited some proceeds from bonds from an aunt. They were not I Bonds, but I don't think that makes a difference There were several bonds split between two nieces. Neither were mentioned as beneficiaries in the bond records. After probate, the bonds were cashed and money was distributed to the two nieces according to the aunt's will. I think this is how it works. If you have a stash of money and you want someone to inherit it, that would be taken care of in the will.
 
Pecos said:
As it turns out, I printed out a copy of the instructions. @Alligatorob
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Crap, my scan is simply not dark enough. I am going to type it in:

You can edit securities being held in Current Holdings

To add a secondary owner or beneficiary to your securities registered in single ownership form:

- Log into your primary TreasuryDirect account
- Click the ManageDirect tab at the top of the page.
- Under the heading Manage My Securities click "Edit" a registration.
- On the Edit Security Registration page, choose the security type you want to edit and click "select."
- On the summary page, choose the security or securities you wish to edit and click "select."
- On the Detail page, select the registration containing the secondary owner or beneficiary. (If you have never created the registration, you can do so by clicking "Add New Registration". Once you have created the registration, the system will bring you back to the Detail page where you will find the new registration listed in the drop-down box.) Note: Entity accounts may only have one registration. All securities in an entity account carry a registration identical to the entity account name.
- Once you have selected the desired registration, click "submit" to complete the change in registration for the security.

Trust me, once you have done this and worked you way through the government verbiage, it will be much easier, please don't give up. The "govie" who wrote this needs to go back to freshman English.
 
T-Bills are current paying mid 3% for 6 month maturity dates. They are actually safer than money in a bank. If the government were to default on things like t-bills. that would be the least of your worries.
 
Pecos said:
Crap, my scan is simply not dark enough. I am going to type it in:

You can edit securities being held in Current Holdings

To add a secondary owner or beneficiary to your securities registered in single ownership form:

- Log into your primary TreasuryDirect account
- Click the ManageDirect tab at the top of the page.
- Under the heading Manage My Securities click "Edit" a registration.
- On the Edit Security Registration page, choose the security type you want to edit and click "select."
- On the summary page, choose the security or securities you wish to edit and click "select."
- On the Detail page, select the registration containing the secondary owner or beneficiary. (If you have never created the registration, you can do so by clicking "Add New Registration". Once you have created the registration, the system will bring you back to the Detail page where you will find the new registration listed in the drop-down box.) Note: Entity accounts may only have one registration. All securities in an entity account carry a registration identical to the entity account name.
- Once you have selected the desired registration, click "submit" to complete the change in registration for the security.

Trust me, once you have done this and worked you way through the government verbiage, it will be much easier, please don't give up. The "govie" who wrote this needs to go back to freshman English.
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Thank you SO much for posting this. I would have never found it. (y)
 
Pecos said:
To add a secondary owner or beneficiary to your securities registered in single ownership form:

- Log into your primary TreasuryDirect account
- Click the ManageDirect tab at the top of the page.
- Under the heading Manage My Securities click "Edit" a registration.
- On the Edit Security Registration page, choose the security type you want to edit and click "select."
- On the summary page, choose the security or securities you wish to edit and click "select."
- On the Detail page, select the registration containing the secondary owner or beneficiary. (If you have never created the registration, you can do so by clicking "Add New Registration". Once you have created the registration, the system will bring you back to the Detail page where you will find the new registration listed in the drop-down box.) Note: Entity accounts may only have one registration. All securities in an entity account carry a registration identical to the entity account name.
- Once you have selected the desired registration, click "submit" to complete the change in registration for the security.
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Thanks @Pecos I just did it, exactly as you said. It worked! Would have taken me many frustrating hours without your help.
 
Signed up yesterday, today made my first I-Bond purchase and is scheduled for the 6th. Yes, the instructions were a little confusing but fumbling along it appears to be a successful journey. Lots of hoops as mentioned but it was easier than I thought. Not sure if I want to try explaining the process to my non-tech wife. This is probably where my engineer grandson will help. Next will tackle setting up my beneficiary. Have to wait until the deposit posts whenever, link is inactive until then.

Added: I will see tomorrow whether TreasuryDirect.com plays nice with Linux after the fiasco encountered with the 'Goldman Sachs' /Marcus event.
 
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OneEyedDiva said:
Muslims are instructed to stay away from Riba (interest). We are not to pay it or charge it. However, more progressive Muslim scholars who recognize it's almost impossible to avoid interest in todays society say that up to 5% of one's assets is acceptable, but we are advised to purge ourselves of interest we may accrue by donating it to non Islamic entities. During the time of Prophet Muhammad (PBUH) interest was seen as something that made the rich richer and helped keep the poor impoverished, thus was seen as haram (harmful). Sounds like what's going on in modern times doesn't it? We can collect dividends and capital gains, however, since they are seen as income from different sources as interest. For me they are significant enough that getting the paltry rate of interest on my bank savings accounts (which I wind up purging anyway) doesn't bother me. I had to be mindful when opening up one of my credit union accounts because what they were touting as dividends was really interest. I opted for an Islamic savings which doesn't pay interest.
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if the payout is met with an equal drop in investment value , that would be a dividend .

they come from the company cash register regardless of profits or not . just an amount of your own money refunded to you by the board so not a problem .

if the payout is on top of your existing balance with no subtraction then that would be interest ..

interest comes from loans .

bond etfs can be tricky since they add each days interest on its holdings in to the share price and when paid out most bond funds see a decrease by the same amount but that is still interest.

many bond mutual funds hold your interest on the side , they don’t reflect it in the days nav and so when paid there is no subtraction from share price .

it can be a bit confusing at times
 
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