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Record seeking federal Series I savings bonds, an inflation-protected and nearly risk-free asset, offer an eye-popping 9.62% Annual Return through October.
However, buying I bonds is not easy Treasury DirectA 20-year-old platform run by the US Treasury Department, say financial advisors.
“It’s like going to the DMV online,” said Matt Stephens, a certified financial planner with AdvicePoint in Wilmington, North Carolina, explaining that the process of buying I bonds is especially difficult for his older clients.
I bond interest has two parts, a fixed rate and a variable rate, which adjusts every six months on a consumer price IndexA major measure of inflation.
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since the annual rate jumped up to 7.12% According to a Treasury official, 1.85 million new savings bond accounts have been opened last November till June 24.
“We are committed to ensuring that TreasuryDirect users have a positive customer experience,” a Treasury spokesperson said, highlighting recent changes, such as relocated resources, hiring temporary staff and website, and phone support. Improvement.
“We are also in the process of developing an updated, modern replacement for the existing Treasury Direct system,” he added.
There are two ways to buy I bonds. You can purchase them electronically through TreasuryDirect with a personal limit of $10,000 per person per calendar year. You can also buy these with you in paper form federal tax refundEnabling purchases of another $5,000 per person.
Before buying an electronic I bond, you must open a TreasuryDirect Account By providing your tax ID number, email address and banking details.
Password login page at TreasuryDirect.gov.
However, you will need to keep your account number and password safe, as multiple unsuccessful attempts can lock your account. This requires a call to customer service, which is currently experiencing “higher than normal call volume”. according to website,
Another potential hitch: You can’t rely on password managers to auto-fill your credentials because part of the login requires you to type the password on the virtual keyboard with your cursor.
Tommy Blackburn, a Richmond, Virginia-based CFP and senior financial planner at Mason & Associates that often helps clients purchase I bonds, said one of the main pain points is the additional identity verification.
In some cases, investors must fill out a account authorization form To prevent fraud, according to a Treasury official. The form needs to be signed at a bank or credit union notated with a “signature guarantee” before mailing it back.
“In our experience, it can be very difficult to obtain signature guarantees from major financial institutions and local people,” Blackburn said. However, a Treasury official said they are working to expand the certification to any notary public.
There is a similar process for updating banking details for TreasuryDirect, which requires a . is needed bank change request formexplained Ken Tumin, founder and editor of DepositAccounts.com, who recently went through the process.
When opening a TreasuryDirect account, “you definitely want to choose a bank account that you plan to own and maintain for a long period of time,” suggests Tumin.
Experts say that though the current I bond rate may be attractive, it is important to consider whether these properties are in line with your goals before buying.
have relatively low purchase limits, with few exceptionsAnd there’s no access to the funds for one year, which makes it suitable as a “supplement to your emergency fund,” Stephens said.