But you only have a small window, until the end of October, to take advantage of the rate. Savers who want to keep that rate for an additional six months have until Friday, October 1. 28 to make your bond purchase I to make sure it will be issued before October 1st. 31 deadline.
Here’s why that cutoff period is important.
There are two components to an I bond yield: a fixed rate and an inflation-adjusted rate. The fixed rate of return and the semi-annual rate of inflation are announced by the Treasury Department in early May and November of each year.
While the fixed rate remains the same over the life of the 30-year bond (and is zero at this time), the inflation rate is adjusted every six months based on changes in the consumer price index for all Urban Consumers. .
Although inflation is still at historically high levels, the latest figures show a slight slowdown, according to newly released data from the Bureau of Labor Statistics.
Some indices fell in September, including those for used cars and trucks and apparel. Consumer price increases were partially offset by a 4.9 percent decline in the gasoline index. Therefore, it is likely that the inflation index part of the I bond could see a rate drop in November.
However, investors who buy bonds I before November 1. 1 will continue to receive the 9.62 percent rate for the first six months you hold the bonds. But you must receive your confirmation email for your I bond purchase by 11:59:59 pm ET on October 1st. 28 to make sure you lock in the rate.
Here are some things you need to know about buying an I bond.
— To purchase an electronic I voucher, you must first open an account with TreasuryDirect.gov.
— Individuals can purchase up to $10,000 in I Bonds in a calendar year. For married couples, each spouse can purchase up to the $10,000 limit.
— Don’t buy an I bond with money you think you’ll need soon. This is not the place to put the funds you need to access in case of an emergency expense, like a major car repair. Those funds must remain in your savings account. You must have an I voucher for 12 months from the date of issue before it can be redeemed.
— If you cash in the bond in less than five years, you lose the last three months of interest. Once your I bond is five years old, there is no interest penalty if you cash it.
— If you have never set up a TreasuryDirect account before, please take the guided tour on the website and be sure to read the instructions carefully to minimize any problems. People who encounter problems will find it difficult to contact a living person to help. Wait times for assistance at 844-284-2676 can be long. (Calls are accepted from 8 am to 5 pm ET, Monday through Friday.)
— Given the problems some people have had setting up a TreasuryDirect account, don’t delay. Do it now. Don’t wait until October. 28. TreasureDirect has been flooded by savers looking for information or help with an I bond problem, resulting in much longer waits than usual.
— If you’re having trouble setting up an online account, you’ll need to get paperwork signed by your bank. If that happens, you’re not likely to make it to October 1. 28 deadline.
I initially tried to buy an I bond in June. TreasureDirect said it was having difficulty verifying the information I provided. They didn’t tell me why there was a problem.
“We did not receive any information regarding problems with account verification,” said an automated email from TreasuryDirect.
Due to problems verifying my information, I had to complete an account authorization form and mail it to a Treasury site in Minneapolis. The first email from TreasuryDirect said that “the average approval takes 10-15 days, but can be longer depending on the volume of forms we receive.”
A few weeks after I mailed the form, I received an email acknowledging that Treasury had received my form and that the approval process could take up to 13 weeks for review and processing. It was good that they managed my expectations. Two weeks later, I received another email from TreasureDirect saying that the hold on my account had been removed and that I could make my I Bond purchase.
If you’re having trouble setting up a TreasuryDirect account on your first try, it’s unlikely you’ll be able to make it through October 1. Deadline of 28 to benefit from the rate of 9.62 percent. There just isn’t enough time to navigate the verification process.
But with inflation still high, I bonds will continue to pay significantly more than a savings account or certificate of deposit even after the rate resets in November. So don’t give up if you hit a roadblock in the process.
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