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| Date Posted: Oct/05/2001 6:04 PM Posted By: SammyB Rank: Member Not sure if this qualifies as a hot deal, but with the uncertainty in the financial markets, some of you may be interested in earning a safe 7% interest (6.96%). You have to have available cash to make this work. Using your rewards credit card (for the best cashback cards check out http://www.flur.com) or your Southwest airlines credit card, purchase Series I savings bonds at http://www.savingsbonds.gov The current, inflation idexed rate on these is 5.92%. Sell these bonds for cash at 6 months, and lose 3 months of interest (you earn 1.48% on your money for these 6 months). Add this percentage rate to that you earn from your casback card (close to 2% for some tiered cards, or close to 2% if you sell your SWA ticket on ebay that you earn from the purchases). This gives you 3.48% for these 6 months. Repeat for an additional 3.48% for the next 6 months, if you desire, giving you an annualized and secure 6.96%. Not amazing, but higher than any CD/Money Market/ST Bond fund out there and completely secure. |
| Date Posted: Oct/05/2001 6:19 PM Posted By: Cyberbishop Rank: Charter Member Hmmm…also exempt from state income tax. That’s pretty good Never realized they’d take credit cards with no processing fees. Thanks |
| Date Posted: Oct/05/2001 6:45 PM Posted By: JJd Rank: Senior Member Nice post Sammy especially at this time. |
| Date Posted: Oct/05/2001 7:53 PM Posted By: SUCKISSTAPLES Rank: FW Historian only catch is you can only buy $1000 in bonds total online per month, if they see too many transactions theyll cancel it…lots of people do this to rack up frequent flier miles… and buying them online is the only way to use a credit card….if you buy at a bank you have to use a check… |
| Date Posted: Oct/05/2001 9:04 PM Posted By: glee719 Rank: Shopaholic Member (Deleted because I need to read first before I type something stupid!) Message edited by: glee719 on 10/05/2001 21:08:02 |
| Date Posted: Oct/06/2001 3:12 AM Posted By: Biker Rank: Member only catch is you can only buy $1000 in bonds total online per month, if they see too many transactions theyll cancel it…lots of people do this to rack up frequent flier Can you tell me if you are sure about this? I didn’t see this but I did see that the highest denominator was $1000.00. |
| Date Posted: Oct/06/2001 3:57 AM Posted By: camila Rank: New Member I bought this bonds several months back. You can buy $1000. max per transaction, but there is no limit to how many transaction you can buy, as long as you don’t go over $30,000. per year. Yes, it is a great deal, and to make it even better, you don’t have to SELL the bond, and earn inflation plus interest for the next 30 years! |
| Date Posted: Oct/06/2001 4:49 AM Posted By: madcow223 Rank: Happy Member Buying I-bonds with a rewards card seems like a great idea if you have money you want to park for the short term. It should be noted that its highly unlikely we’ll see 5.92% again when the rates change in november. But even if the rates go to 5%, using a 1% rewards card would still get you 4.73%. This is still a heck of a lot better than current 1 yr CD rates. Plus your money is more liquid since you get to cash out every 6 months. |
| Date Posted: Oct/06/2001 5:57 AM Posted By: MisterEd Rank: Senior Member 3KHas anyone has these bonds charged to your credit card as a cash advance (thereby adding a fee and getting no reward points) ?? |
| Date Posted: Oct/06/2001 10:00 AM Posted By: booksleuth Rank: Senior Member Did my three K before the last rate drop, (they’re adjusted quarterly). Used ClickCiti, charged as regular CC purchase, NOT cash advance. |
| Date Posted: Oct/06/2001 1:21 PM Posted By: Biker Rank: Member Can they lower the rate after you buy the bonds, or are you locked into a figure for the life of the bond? |
| Date Posted: Oct/06/2001 1:28 PM Posted By: Cyberbishop Rank: Charter Member FAQ The earnings rate of an I Bond is a combination of two separate rates: a fixed rate of return (3%) and a variable semiannual inflation rate (1.44% this quarter). The fixed rate remains the same throughout the life of the I Bond, while the semiannual inflation rate can vary every six months. Calculation of Compostie Rates |
| Date Posted: Oct/06/2001 2:24 PM Posted By: guppy Rank: Senior Member Looking at redemption tables, it appears that: bonds earn interest by the month, ie., a bond purchased last day of the month will earn the same interest as a bond purchases the first day of the month; a bond redeemed the first day of the month will earn the same as a bond redeemed the last day of the month. Rule of thumb: buy on last day of month; redeem on first day of month. |
| Date Posted: Oct/06/2001 3:40 PM Posted By: BenFranklin Rank: Senior Member For you legal/investment experts out there. There is a state company (Georgia) that offers something called Subordinate Debenture (dictionary says it’s a unsecured bond that’s subordinate to all other bonds) that is currently (and has always) yielding almost twice the bank CD. It’s currently offering 8% (this is a bond like thingamajick, so it’s taxable) for 4 years. They also offer checking account like thingy called Demand Notes, tha’ts currently yielding 5.43% This company advertise in my hometown newspaper just about every day of the week. Though this is only backed by the full faith and credit of the company (the company has NEVER failed to pay principal and interest in its years in business). And it has a PHYSICAL location in my home town where I can deposit money. So, Please DON’T respond regarding the legitmacy of this business in my town. They are a legit corporation. And they DO NOT advertise in teh classified sections of the newspaper (always in the regular sections with a 1.5″ x 1″ ad) Now, for you investment experts and lawyers (SUCKISSTAPLES), what can you add to this? MORE DETAILS at their website (they have MANY locations) http://www.themoneytreeinc.com/ Though this is based in Georgia, I think the investment instrument is available througout the country (I believe I saw it advertised in NY Times too). It’s 8% GUARANTEED by the Corporation. Please keep in mind they have NEVER failed to pay principal and interest in their existence. DIRECT PDF PERSPECTUS Please, for you legal investment eagles out there, help me decipher. I know it’s a bond and it involves more risk. How much more, and how stable are they?! |
| Date Posted: Oct/06/2001 5:00 PM Posted By: TheDude Rank: Senior Member 1KThis is going to be a great deal. Need to rack up some high dollar charges and what a better way than to lock in for some decent rates (better than my money market) and earn some rewards. Just received a new card from Carnival. Takes a load of dollars to get a decent reward (free cruise) — but purchasing $30,000 per year is certainly going to be a big plus. |
| Date Posted: Oct/06/2001 5:27 PM Posted By: Pyrro Rank: Happy Member has anybody done this, and if so any success stories ? |
| Date Posted: Oct/06/2001 6:01 PM Posted By: SUCKISSTAPLES Rank: FW Historian I HAVE DONE THIS. Facts: The return and rates stated about the bonds is accurate – get the I bonds. Yes bonds are charged to your credit card as a PURCHASE, and NOT AS A CASH ADVANCE. This means you WILL earn “reward” points on most credit cards. The best time to buy is near the end of the month b/c then you can redeem up to 30 days earlier..but make sure not to wait too late, as many times bonds purchased, say from the 27th on will not be issued until the NEXT month. Id say buy around the 23rd or 24th. I only charged one $1000 I bond per month b/c I have read on other forums that people who tried to order several $1000 bonds in a month had their transactions cancelled and I did not want to deal with the problem, so you MAY be able to buy more than $1000 per month, but I have read that other have had problems doing that…but I do not know that from personal experience… |
| Date Posted: Oct/06/2001 6:48 PM Posted By: BenFranklin Rank: Senior Member SUCKISSTAPLES could you respond to my Subordinate Debenture questions above please. I know you are a FW lawyer. |
| Date Posted: Oct/06/2001 7:21 PM Posted By: SUCKISSTAPLES Rank: FW Historian I can confirm the facts of the savings bond deal, as i have done it, but I am not able to give legal or investment advice b/c I’m not an investment expert and more importantly, I have not researched the investment and laws about the investments you are referring to. I can say from opinion and experience that the MAJORITY of “investment” ads for notes, unsecured bonds, etc turn out to be pyramid schemes, or simply fraud mills where the execs mismanage, pilfer and then file for bankrupcty… REGARDLESS of whether the ad is in the “classifieds” or in a paid print ad in the business section – there is NO additional legitimacy simply b/c they paid for a $1,000 ad…. Even though a recession and possibly depression may be impending, a safer bet than these companies and their investment notes would be investing in established stock index funds, which have statistically averaged double digit annual returns when held for long periods of time..but thats just my opinion Message edited by: SUCKISSTAPLES on 10/06/2001 19:24:39 |
| Date Posted: Oct/06/2001 8:49 PM Posted By: dealwiz Rank: Ancient Member Did anyone mention that you have to pay credit card interest on the money you use to buy the bonds? Of course, you could get a 0% credit card… However, if you do pay interest it’s tax deductible |
| Date Posted: Oct/06/2001 8:58 PM Posted By: BenFranklin Rank: Senior Member Thanks Suckisstaples for your input. |
| Date Posted: Oct/07/2001 12:46 AM Posted By: DayTrader Rank: Shopaholic Member Most investments in the newspaper for higher rates are scams. Unless your are buying a CD from a bank that is back by the FDIC insurance, there is no guarantee that you will get paid in the event of bankruptcy. A subordinated note means you stand no chance to get paid. In the event of bankruptcy, the first to get paid is the government (IRS), suppliers come next, then the lien holders (those with claim to real property), if there is anything left, the bondholders get paid. By this time, there is nothing left for the subordinated bond holders. The promises of getting 8%-9% interest is playing on your greed factor. If something sounds too good to be true, then it is. Most of these investments are just “Loans” you are making to companies who can’t raise cash the traditional way (e.g. borrow from bank, borrow from the equity or bond markets) BUT WAIT, they have a history of making ALL their payments. Everyone’s credit is rated AAA until they default. |
| Date Posted: Oct/07/2001 12:49 AM Posted By: jqchen Rank: Member Do the financial institutes usually charge a fee for cashing out the bonds? |
| Date Posted: Oct/07/2001 5:18 AM Posted By: 1hotmama Rank: Senior Member I am wondering if anyone has purchased these bonds using a Discover card, and, if so, were you charged as a regular purchase, or a cash advance? Thanks, OP |
| Date Posted: Oct/07/2001 9:22 AM Posted By: TheDude Rank: Senior Member 1K I won’t pay a dime in credit card interest. This is not a deal for someone who carries the balance, but has cash to invest. You use the credit card only as a means to rack up some rewards. I’m looking to move my current money market balance into IBonds using my credit card. When my credit card bill comes in I’ll pay it off. If I time it right, I’ll have over 30 days before I have to pay the bill — that let’s me continue to make my huge return on my money market account for 30 extra days Now if I would have liquidated my stocks several months ago…. well then I wouldn’t have lost 20% on them…. My plan, max out the $30K limit over the next year…. |
| Date Posted: Oct/07/2001 9:28 AM Posted By: BenFranklin Rank: Senior Member Thanks DayTrader for your insight. Yep, you are absolutely correct. *puts greed in storage” But DayTrader, one more thingy. If there is really low chance of getting your money back? How can they afford to open physical offices, and claim to pay 100% of the time? Also, why not promise absurd 25% guarantee or something? Just curious that’s all. Thanks for youru insight |
| Date Posted: Oct/07/2001 3:02 PM Posted By: Biker Rank: Member Thanks for the thread and Thanks to all the people who have taken the time to contibute your valuable information. Just one more thing, where do you go to liquidate the I bonds? |
| Date Posted: Oct/07/2001 4:04 PM Posted By: JJd Rank: Senior Member Good opportunities are present if you work with GM or have family that does. “www.demand notes.com”. No link provided because there is a referal available, however, that’s not why I’m posting. |
| Date Posted: Oct/07/2001 5:27 PM Posted By: krackato Rank: Senior Member Man, you remember a few years ago when people were unhappy with 7% a MONTH! My, how things change. Let me get this straight. As an individual, I can buy a SINGLE $1000 bond per month using a single credit card. What is the $30K limit, and who cancels your $1000 transactions if there are too many of them? Your Credit Card company or the savingsbond.gov people? Also, everyone go to Bankrate.com. They have cool calculators to see how much you need to save and invest per month to reach a savings goal. I need to set aside $65 a day for 8 years at 6% annual return to end up with $250,000 in savings. Also, I hear a good way begin saving is to automate the process by having your bank automatically transfer a set amount every month into a Investment account, so that you never see the money (and therefore, never spend the money.) As little as $200 a month at 6% will net you $32,000 in 10 years. Not enough to retire on, but if you do this through High School and College with the money you earn at work, you’ll be in a great financial position when you really start making money. I think most people can save $50 a week. With a more realistic scenario, you could make an initial deposit of say $5,000, save $400 month, and hope for 11% return over 20 years and end up with $363,730. And if you’re really serious, consistent: and have a good job or a two income house, you could start out with $10,000, save $800 a month, hope for 11% with smart, safe investing and end up with $727,459. Obviously this is all speculative and nothing is certain and it doesn’t even take into account inflation and all the complex tax laws. I think a lot of people think, “Man I’m 30 years old. Even with all of that, I’ll be 50 and not even be a Millionaire” But people are living longer and healthier. My parents just turned 50 and they look and feel fantastic. If you take care of yourself, I think 30 to 60 can be the best times of your life. Good health, enough money to do what you want FOR THE MOST PART, and hopefully good family and friends around you. And besides, you don’t have to wait 20 years to enjoy the subconsciouss security of knowing that you’ve some savings incase you need them. I think that mental freedom is well worth a small sacrifice each month. Sorry I’m rambling. Maybe we should start a new forum for “Fat Growth” A way to actually help the community get “Fat Wallets.” There are a lot of smart people here. I’m sure we could come up with some great investment strategies. Imagine if we became as enthusiastic about that as we are about deals. EDIT: MSN Money Central also has some easy to use calculators at the link above incase the bankrate calculators give you the same errors I’m getting. Message edited by: krackato on 10/07/2001 17:41:47 |
| Date Posted: Oct/07/2001 6:08 PM Posted By: skierdude10 Rank: Senior Member I second Fat Growth or something like that, we could all come up with SAFE investment ideas to make sure we can retire knowing that we have enough money to spend |
| Date Posted: Oct/07/2001 6:21 PM Posted By: Stryker Rank: Greedy Member |
| Date Posted: Oct/07/2001 7:00 PM Posted By: Raiz Rank: Ancient Member I am in my senior year of college and hope to be making a good salary about the same time next year. I would REALLY like to see something like the “Fatgrowth” idea go into effect. I think it would give me a nice start on my investing future. |
| Date Posted: Oct/07/2001 7:07 PM Posted By: Cyberbishop Rank: Charter Member But wouldn’t that be just another Yahoo Message Board? |
| Date Posted: Oct/07/2001 7:21 PM Posted By: krackato Rank: Senior Member I guess it’s possible that it could become just like another Yahoo! message board, but I really like the Fatwallet community. And I think it’ll be different than a Yahoo! group because those are probably just stocks and real estate, etc. I’m sure we’d have our share of those, but I think it might be interesting to see some more “creative” investing methods. But it mostly boils down to the fact that I like the cool people in this group and I think Tim does a great job of keeping the site well-oiled and always interesting. Just an idea. Hopefully Tim will read this and reply in a few days. |
| Date Posted: Oct/07/2001 9:43 PM Posted By: PhillyChower Rank: Senior Member <— another college senior who thinks fatgrowth would be a great idea. |
| Date Posted: Oct/07/2001 10:54 PM Posted By: kxl19 Rank: Senior Member Hey guys, The Motley Fool is kinda like a FW, but about investments. For those of you in college or just starting after graduating (like me), I’ve been thinking about monthly investing. Their advice is really good, it explains that on any 30 year rolling window since 1920, the S&P 500 index has returned at least 12% a year, which happens to beat 80% of all mutual funds out there. So if you want a nice safe investment, investing in the SP500 over the long term beats a lot of things. And for those who have a mortgage, instead of overpaying your monthly payment, it’s actually better off to invest that money, and you’ll have more in the end. Good place to start out is at Fool’s School Then, If you want more information about whether to overpay your mortgage or invest that money, check out this article Or, if you just want the main site, check out www.fool.com |
| Date Posted: Oct/07/2001 11:26 PM Posted By: FatWallet.Com Rank: Chief Mucky Muck Interesting – This might actually be a legitimate new category on FW if there is enough users interested in it. |
| Date Posted: Oct/07/2001 11:27 PM Posted By: Cyberbishop Rank: Charter Member Yeah, a new category would be nice It’s time to kick out that cyberrebate stuff |
| Date Posted: Oct/08/2001 12:23 AM Posted By: SammyB Rank: Member Hi again, I guess the last thing I would add on this deal is if you can take advantage of one of the credit card deals which says no fees, no interest on balance transfers until….XXX time you could transfer the charges from the savings bonds purchases to the new card, and invest that money in a money market until the promo period is over, paying it off just in time to avoid interest charges. Just a thought. |
| Date Posted: Oct/08/2001 12:31 AM Posted By: Pyrro Rank: Happy Member The new category would fit nicely into fatwallet community |
| Date Posted: Oct/08/2001 12:43 AM Posted By: ficuso Rank: Broke Member In my opinion I think a category for college students would fit in very well. For instance I am taking a biology class that has 600 students in it. The review guide for the first test was 300 questions. Most students don’t have the patience, or the attention to do this kind of study guide. Well, three friends and I did it a week before the test. What if the study guide could be posted on fatwallet and other people could retrieve it? If I announced in my Biology class that a study guide for the test was on fatwallet, I guarantee that at least 300-500 people would have been on fatwallet in seconds. What if study guides, papers, etc.., were posted in a forum on fatwallet. That could bring alot of young people with a large amount of time on their hands to look for deals. OHHHH,, Thanks for the tips on I-BONDS everyone!! |
| Date Posted: Oct/08/2001 2:51 AM Posted By: SUCKISSTAPLES Rank: FW Historian I motion for a Fatwallet Investment/Money Matters, Fatgrowth, or simlar Forum as well…. I have regularly posted deals and am a big supporter of deals that will INCREASE the amount of money in your pocket, b/c we all know that these “hot deals” still cause us to spend money…. It would be great to have a easy to check forum for: 1) the best banking deals (checking savings, mortgages, credit cards, etc) 2) hot investment tips with the Fatwallet Twist (such as this I bond deal) 3) job opportunties, as many of us are a VERY QUALIFIED bunch of people, and often the companies some of us work for are looking for new talent! |
| Date Posted: Oct/08/2001 7:49 AM Posted By: emaij Rank: Senior Member 1K Just one thing to add to DayTrader’s note: Lawyers get paid ahead of EVERYONE in a bankruptcy (otherwise what incentive would they have to do the work?). |
| Date Posted: Oct/08/2001 9:10 AM Posted By: Dougmeister Rank: Senior Member 3K SammyB: Could you (or anyone, for that matter) address the comment made by ‘dealwiz’ on the bottom of p. 1 of this thread: Date Posted: Oct/06/2001 8:49 PM Did anyone mention that you have to pay credit card interest on the money you use to buy the bonds? Of course, you could get a 0% credit card… However, if you do pay interest it’s tax deductible Shouldn’t the cc interest be taken into account, or do you have a way around that as well? Or am I missing something here? |
| Date Posted: Oct/08/2001 10:08 AM Posted By: artemis67 Rank: Member dougmeister, as long as your CC company doesn’t treat the purchase as a cash advance, and you are able to pay off the balance during the grace period, then you should be fine. Anyone who can’t pay off the CC during the grace period should not be making this purchase. |
| Date Posted: Oct/08/2001 10:43 AM Posted By: Fritoz Rank: Ancient Member I vote for the investment category too. Let’s make sure there’s a rule forbidding the “pump and dumpers” coming in trying to pimp some lame company’s stock to make a few bux off the good folks here… |
| Date Posted: Oct/08/2001 11:00 AM Posted By: OhRock Rank: Member I like the fatgrownth twist. I vote for that forum too. |
| Date Posted: Oct/08/2001 6:32 PM Posted By: jairocon Rank: Senior Member 1K FatGrowth sounds great… Now here’s a question: Interest charged by credit cards is tax deductible??? How? Somebody please point me to a source. Also is then interest you get charged on say car loan deductible??? Thx! |
| Date Posted: Oct/08/2001 6:58 PM Posted By: Cyberbishop Rank: Charter Member I’m not 100% sure, but I thought all interest payments have been made non-tax-deductible since the Reagan-era, except for mortgage payments Besides, your interest for credit card balances would be significantly higher than the interest + rewards from buying bonds anyway, even if you factor in the 30%-extra “savings” from cc-interest tax-deduction, if it does exist. |
| Date Posted: Oct/08/2001 7:09 PM Posted By: guppy Rank: Senior Member Interest on CC can be deductible if it is investment interest. |
| Date Posted: Oct/08/2001 7:34 PM Posted By: SUCKISSTAPLES Rank: FW Historian DONT DO THIS DEAL UNLESS YOU PAY OFF YOUR CREDIT CARD IN FULL EVERY MONTH AND HAVE THE CASH TO PAY FOR THE BOND! You must pay your cc bill for the bond in full, otherwise theres no financial gain to this deal!! This is not just a scheme to earn CC points – you must actually have MONEY TO INVEST in a savings bond, otherwise the credit card interest would wipe out the benefit of this deal. |
| Date Posted: Oct/09/2001 8:03 AM Posted By: BlueTDimly Rank: Frivolous Member Fatgrowth is a great idea, provided it’s adequately moderated (as I’m sure it would be!). BlueT/ |
| Date Posted: Oct/09/2001 4:03 PM Posted By: JeffL Rank: Senior Member Just notice that EE bonds can be issued at 50% of face value. Is it better than I bonds? You’ll need only pay half money. And what about HH bonds? In my opinion, HH is not good b/c you can only receive interest on your bonds twice annual. I’ve no experience in any bonds. So, can anyone give some comments on the difference between the benefits of I bonds and EE bonds? |
| Date Posted: Oct/09/2001 4:09 PM Posted By: Cyberbishop Rank: Charter Member You get the amount you’ve paid for (i.e. 50% face value) + any accrued interest – any early redemption penalties on EE bond. The face value is just a guarantee that, in the event interest rates are really low, you’ll at least get the face value (i.e. twice the amount you’ve paid for originally) in 20 years (I think it’s 20 years). That’s more like a worst-case scenario… |
| Date Posted: Oct/09/2001 4:45 PM Posted By: skierdude10 Rank: Senior Member Finance board is up, check it out! |
| Date Posted: Oct/09/2001 5:34 PM Posted By: defender Rank: Charter Member Just ordered 2 $500 I bonds just for fun. Nice deal if you ask me. My stocks are sucking was so I might as well float some loot around. The best way to make money in the stock market is to short anything I buy! |
| Date Posted: Oct/09/2001 7:42 PM Posted By: Biker Rank: Member FROM: BuyBonds@bpd.treas.gov You can cash your I Bond any time after six months and get your original investment plus earnings. However, I bonds are meant to be longer term investments, so if you cash a bond within the first five years, you’ll forfeit three months worth of earnings. Nicki Savings Bonds Direct Customer Service THE DEAL AS ORIGINALLY CONCEIVED DOES NOT WORK ACCORDING TO THE U.S. GOVERNMENT. EDIT: SORRY, YOU WERE RIGHT, MY BAD. Message edited by: Biker on 10/10/2001 02:10:53 |
| Date Posted: Oct/09/2001 8:07 PM Posted By: SUCKISSTAPLES Rank: FW Historian yes the deal works EXACTLY as planned. Buy and Hold a bond that pays 6%APR for six months. You will earn only 3 months of interest (you forfeit 3 months) so you get 1.5% interest. (6% APR for three months interest =1.5%) But you also get up to 2% in credit card rewards, so that bumps your earnings up to 3.5% for 6 months, which translates to a yearly APR of 7%. Simple math. Message edited by: SUCKISSTAPLES on 10/09/2001 20:08:38 |
| Date Posted: Oct/09/2001 8:43 PM Posted By: Cyberbishop Rank: Charter Member Yeah, I don’t see why the deal won’t work. You just lose 3 months’ worth of interest…the proportion of the loss gets lower as you hold the bonds longer, with the loss reaching 0% afte 5 years. |
| Date Posted: Oct/09/2001 9:25 PM Posted By: dorkyden Rank: Senior Member 2K someone asked about the 30k a year limit… Series I Bond I Bonds are an accrual-type security (interest is paid when the bond is cashed). The current earnings rate for I Bonds is 5.92%. Earnings on I Bonds are inflation-indexed. The earnings rate is calculated as a combination of a fixed rate of return and a semiannual inflation rate based on CPI-U. Interest is generally added monthly and compounded semiannually. I Bonds are sold at face value. (For example, a $100 I Bond costs $100.) I Bonds earn interest for up to 30 years. You can buy up to $30,000 (face amount) in bonds in your name during any calendar year. If you buy bonds in co-ownership form, you can apply the purchase toward either co-owner or divide it between the two. The limitation doesn’t apply to bonds on which you name yourself as a beneficiary, as opposed to those on which you name yourself as an owner or co-owner. hmmmm so I can buy more than 30k if I name myself as beneficiary? Interesting. (not that I have that much spare cash laying around ) Linky for details Message edited by: dorkyden on 10/09/2001 21:29:20 |
| Date Posted: Oct/09/2001 9:31 PM Posted By: Cyberbishop Rank: Charter Member If you really trust the person to whom the other $30,000 of bonds are registered, then of course you can get more than $30,000 of I bonds. That’s a lot of cash tied up, though Message edited by: Cyberbishop on 10/09/2001 21:31:52 |
| Date Posted: Oct/09/2001 11:07 PM Posted By: trafael Rank: Tired Member will be trying to get the 30000 in before the end of the month with my CC. only problem is credit limit is 7500.. will try to chase my purchases with payments to my CC account… is it possible to do it before one credit cycle passes? also heard earlier that may have problems with cancellations? who cancells the buy? CC or the gov? will be very complex though with 1000$ only per purchase online… OhRock::::: Sinclair hihi my reponse to that would be Commodore Vic 20 3.5 KB RAM… my first computer and I think it was marketed as the first color / sound computer. worked great on my black and white TV screen Message edited by: trafael on 10/09/2001 23:12:25 |
| Date Posted: Oct/10/2001 2:18 AM Posted By: Biker Rank: Member trafael – you might want to start by having your CC limit raised right away. at least double it. |
| Date Posted: Oct/11/2001 12:12 AM Posted By: trafael Rank: Tired Member just started my sisyphian work…. 4000 last night… hope nobody cancels anything. sweet 80$ amazon GC’s from my CC… they better give them to me! although I’m sure they gonna puke at the end of the month when I sum up all the points is the 30000$ limit per calendar year or any 12 months period? anyone had problems with multiple orders so far? |
| Date Posted: Oct/11/2001 12:16 AM Posted By: Cyberbishop Rank: Charter Member You can purchase up to $30,000 worth of I Bonds in your name and Social Security Number each calendar year I’m waiting til around the 20th to put in my order. I won’t be too late, right? |
| Date Posted: Oct/11/2001 3:54 PM Posted By: gfunk4698844 Rank: Member I second the motion for another forum devoted to investments/money-increasing. Your insightful and well thought out posts are always appreciated SUCKSISSTAPLES. -GfUnK |
| Date Posted: Oct/11/2001 4:51 PM Posted By: BIGTCQB Rank: Senior Member Let’s not all hit the site on the 20th all at once. LOL What is the last possible day in the month do you think you could buy the bonds & have them delivered to you with that month’s date stamped on them? the 23th, 24th, 25th?? or can you wait until the 28th or 29th of the month to buy them? I am just trying to delay the purchase as long as possible in order to pay the least amount of interest on the CC (introductory rate of course) LOL. Thanks you your information. |
| Date Posted: Oct/11/2001 6:40 PM Posted By: jqchen Rank: Member I finally got an email response from the savings bonds customer service, regarding my question about the limit of online transactions. Here it goes: Although the transaction limit is $1,000 per transaction, we do not limit the number of orders that can be placed within the same day. To purchase larger denominations, you can purchase them through a local bank who will send the order to a Federal Reserve Bank or you can purchase them by mail through the FRB. The purchase application for the I bonds is PD F 5374. You can order the purchase application through our web site at the following address: http://www.savingsbonds.gov/sav/savforms.htm If you purchase the bonds by mail, send the application and a check payable to the FRB. To locate the servicing FRB, go to the following address: http://www.savingsbonds.gov/sav/savfrb.htm Stephanie Savings Bonds Direct Customer Service |
| Date Posted: Oct/11/2001 7:23 PM Posted By: trafael Rank: Tired Member first I think that if you take into account after tax dollars, the 2% gift cards are worth for me more like 3.3% pretax. has to be diluted by the amazon pricey factor and the fact that I dont really need so much amazon crap which probably lowers it again to 2% if I add the other interest that the bonds give out smthg like 1.5% first 6 months it’s still pretty good money. hell I might even keep the bonds for even longer instead of in a money market account which is taxed every year. |
| Date Posted: Oct/11/2001 7:29 PM Posted By: Cyberbishop Rank: Charter Member Well, there are always cash back cards that pay .5% to 5% |
| Date Posted: Oct/12/2001 12:31 PM Posted By: Dougmeister Rank: Senior Member 3K Can anyone tell me if Amazon Nextcard will treat these as a cash advance or not? I guess I could just call, but I thought someone might know off the top of their head. |
| Date Posted: Oct/12/2001 1:43 PM Posted By: singho Rank: Senior Member Dumb question – but what is the way to redeem the baond after 6 months – where do I send it to and how long does it take to get the money back ? |
| Date Posted: Oct/12/2001 1:45 PM Posted By: Cyberbishop Rank: Charter Member You can find answers to most of your questions at SavingsBond.gov … Cashing I Bonds |
| Date Posted: Oct/12/2001 10:36 PM Posted By: SUCKISSTAPLES Rank: FW Historian Yes its wise to review the savingsbond site as it answers all these questions people have been asking/// such is it is treated as a PURCHASE< not as a cash advance and you can redeem bonds at any bank |
| Date Posted: Oct/13/2001 1:50 AM Posted By: SammyB Rank: Member Hi, Anybody have any thoughts on whether the “variable” inflation index potion of the % return will increase or decrease after the rate change at the end of this month? It seems to be that the “fixed” portion of the bonds will certainly decrease at the end of this month. It also seems possible that the inflation indexed portion will increase at the end of this month. So, it may be that if you purchase these bonds during this month, you may actually be getting a slightly higher rate of return on these starting next month. Any thoughts or ideas? |
| Date Posted: Oct/13/2001 7:19 AM Posted By: TheDude Rank: Senior Member 1K The “fixed rate” remains the same (3%), hence the term “fixed rate”. That’s the minimum you’ll earn. |
| Date Posted: Oct/13/2001 8:40 PM Posted By: SammyB Rank: Member Hi again, TheDude – I know the fixed rate is fixed. What I am suggesting is that for the bonds we purchase this month, the total yield (fixed + variable) may be higher for the next 6 months than what they yield now. I am saying this because I think it is possible that the variable, inflation indexed portion of the rate may increase when they do the semi-annual adjustement next month. On the other hand, the new fixed rate will certaintly be lower next month (and for the next 6 months). It won’t affect the bonds we purchase this month, but everyone who buys bonds next month and on may have a lower total return because of this. I was asking if anyone had thoughts on the inflation indicators which will indicate if the variable portion of the bonds will be higher for the next 6 months. Anyone? |
| Date Posted: Oct/15/2001 6:24 PM Posted By: yosmitesam Rank: Senior Member FatGrowth? I alreadyhave a fatgrowth around my midsection from browsing this site constantly. What i’m lacking is a fatwallet. |
| Date Posted: Oct/15/2001 6:34 PM Posted By: yosmitesam Rank: Senior Member There, I just invested 1K with Uncle Sam. These are great rates anyway, cashed in in 6 months or not, and the money goes to a good cause (bombing terrorists). |
| Date Posted: Oct/20/2001 8:06 PM Posted By: Cyberbishop Rank: Charter Member Better put in your order if you haven’t already… |
| Date Posted: Oct/24/2001 1:10 AM Posted By: DaveHanson Rank: Senior Member 6K Why the rush to buy this early in Oct? http://www.savingsbonds.gov/sav/sbdfaq.htm Q: If I buy a bond at the end of the month, what issue date appears on the bond? A: The issue date of your savings bond indicates the month and year the bond starts earning interest. It’s printed in the upper right hand corner of the bond. Usually, if you buy a bond during the month of February 1999, the issue date is printed as “February 1999” on the bond. However, if you buy the bond at the end of the month, your bond’s issue date may be the following month. For example, if you buy a bond on February 28, 1999, your bond’s issue date will probably be March 1999. The savings bond issue date is determined by the date we receive funds from the credit card association. This usually happens quickly–within 1-2 business days–so it only affects end-of-month purchases. |
| Date Posted: Oct/24/2001 1:15 AM Posted By: Cyberbishop Rank: Charter Member Well, we only have 6 business days left… I did get my confirmation of payment receipt in 2 business days, as promised Actually all that matters is when your credit card statement period ends… Message edited by: Cyberbishop on 10/24/2001 01:16:12 |
| Date Posted: Oct/26/2001 3:59 AM Posted By: SUCKISSTAPLES Rank: FW Historian HAS ANYONE TRIED TO DO MULTIPLE PURCHASES AT THE SAME TIME?? I was trying to do about 8 $1000 transactions, after the 3rd time when it tried transferring me to the “payment center”, I got an error message..tried again, same error message… Could be b/c its 2am and they are doing maintenance, but more likely its b/c they restrict how many you can do at once…anyone else tried to place multiple orders??? BTW: to BENFRANKLIN: I read the Website of that subordinated debenture outfit you were referring to that offers those high rates, it was interesting to see this in the “letter from the President”: “Last week, we received $860,291.86 in additional investments bringing the total investment to over thirty million dollars. Our assets exceed twenty-eight million dollars. “ WELL LETS SEE: they coaxed almost a million dollars out of greedy investors last week, and now have over $30 million from investors, but only 28 million in assets?? Looks like they are already operating AT LEAST $2 MILLION IN THE HOLE!!! If not much much more! The way it looks, they keep opening new stores to keep the money rolling in to pay the people cashing out…classic Ponzi scheme, and the President of the company is even telling you so! But thats just my opinion… Message edited by: SUCKISSTAPLES on 10/26/2001 04:11:41 |
| Date Posted: Oct/26/2001 9:15 AM Posted By: 1hotmama Rank: Senior Member After reading this post a few weeks ago, my first purchase was with my Discover card, no cash advance. I then applied & received my Fleet Plat. up to 2% cash back VISA. I just activated this card, and I was asking if this would be considered a cash advance purchase. The B—H said yes, stating that Fleet, is a Rhode Island Credit Card Co., and they are more “prestegious” than other Visa’s, Discover’s, Master., etc., and they would, even if the transaction was processed as a normal sale by the merchant (usgvmt), once they saw the charge, they would adjust it to a cash advance purchase. Tell me, WTF???Anyone got any opinions on this one???If this is truly the case, I guess I will be cancelling this account before I would EVEr use it. |
| Date Posted: Oct/26/2001 9:32 PM Posted By: DaveHanson Rank: Senior Member 6K 1hotmama, I think you got fed a line. If he treasury treats it like a purchase, giving Fleet (or whoever) its customary transactions fee, then 100 to 1 it won’t be changed. On the savings bond web site, it says it will be a purchase, not an advance. Use that provision to have them sort it out with their cc company if there is some problem. Suckisstaples, I did 1 yesterday and 2 in rapid sucession today with no problems. My guess is that it was an automated protection algorythm you encountered. Could you order them today? The way I read the web site, any purchase made as late is this weekend should probably be fine, unless your CC issuer is really slow or sporadic. |
| Date Posted: Oct/26/2001 11:54 PM Posted By: yurgreat Rank: Senior Member 3K suckis: what credit card did u use to buy the i-bonds? also, does anyone know what was the ibond rate back in 1998, when the s+p 500 was up 30%? |
| Date Posted: Oct/26/2001 11:57 PM Posted By: Cyberbishop Rank: Charter Member Again, you’ll find answers to most of your questions at SavingsBond.gov … Series I Interest Rates 6.33% Message edited by: Cyberbishop on 10/27/2001 00:02:17 |
| Date Posted: Oct/27/2001 12:18 AM Posted By: DaveHanson Rank: Senior Member 6Kyou mean 5.92% Cyberbishop |
| Date Posted: Oct/27/2001 12:22 AM Posted By: Cyberbishop Rank: Charter Member Oh, yeah, that’s what we’re getting now (for Oct 2001 issues) But since yurgreat was asking about the rates for 1998 issues…actually 6.33% is the rates for 1998 issues today; they were paying like 4.92% in 1998. |
| Date Posted: Oct/27/2001 12:26 AM Posted By: yosmitesam Rank: Senior Member Looks like American Express is no longer accepted, so my Costco Cash Back 2% AMEX is no longer accepted. Got in a few times under the wire. |
| Date Posted: Oct/27/2001 10:46 PM Posted By: SUCKISSTAPLES Rank: FW Historian NOTE: there is a new notice on the purchase page that says bonds bought today may have a NOVEMBER 2001 date on them, so no guarantee of getting the higher October-issue rates… My previous problem with ordering multiple bonds at one time looks to have been a glitch. I was able to buy 2 on my southwest visa card and one on my citibank dividends card before the error messages started coming up… I just did 5 more on my Citibank dividends card, it froze one time while transfering to the “payment center” but otherwise was problem free. $1000 denominations each time. |
| Date Posted: Oct/27/2001 11:04 PM Posted By: yurgreat Rank: Senior Member 3K what kind of rewards do the citibank dividends card give? |
| Date Posted: Oct/27/2001 11:40 PM Posted By: SUCKISSTAPLES Rank: FW Historian Straight 1% cash back, paid via check each time you charge $10,000..(so you can earn a check in just a month or two) up to $300 total rebate per calendar year (so charge $30k year) no tiered earnings like discovers’ 1/4%, 1/2%, etc… |
| Date Posted: Oct/28/2001 12:19 AM Posted By: DaveHanson Rank: Senior Member 6K SUCKISSTAPLES, FWIW, you might see if they’ll convert that to a Clik Citi card. Same dividends, but price/purchase protection even better than Amex blue’s. With a 7 figure credit line, I reckon you have plenty of other options for cards that work at B&M’s also. |
| Date Posted: Oct/28/2001 12:31 AM Posted By: 1hotmama Rank: Senior Member I was so PO’ed when I spoke with them, but Dave, I think you are right and I think I am going to test them. Unfortunately, I know that on Thursday, I would have had an October issue date, but right now, it is questionable, depending on how quick the credit card company puts funds in the Treasury Dept’s account (according to Bond customer service rep Friday morning). In fact, right now, the entire VISA system is down, because I first tried to use my new Fleet card, got back message card is invalid. I just phoned Fleet, and was told all VISA transactions are disabled, have been for several hours. |
| Date Posted: Oct/28/2001 12:35 AM Posted By: DaveHanson Rank: Senior Member 6K Good luck, 1hotmama! I really think you’ll be OK if you get it in by tomorrow. They will have their $ by the 31, and their own terms say if they have the cash, you get the October date. If I had higher credit limits, I would buy more than the 3 I snagged–but alas, without the loan in hand yet, I gots no more cash, and I don’t want to pull my credit rating down with more potential refis in the works. |
| Date Posted: Oct/28/2001 1:14 AM Posted By: 1hotmama Rank: Senior Member Thanks again Dave for your encouragement. I will gamble and hope to get the October issue date. Unfortunately, I cannot get my new Fleet card to get authorized, as the Visa system is still down, as I have been trying for about 4 hours now. Apparently, this is quite a problem all over. |
| Date Posted: Oct/28/2001 1:32 AM Posted By: cache Rank: Senior Member yosmitesam, I also have the costco Amex card. I thought it is up to 1% cash back. How did you get a card with 2% back? |
| Date Posted: Oct/28/2001 3:34 AM Posted By: xcheckers Rank: Member FYI, if someone actually takes the time, I believe most/all of the relevant CPI data is out. It’s probably at the BLS website. (to calculate next interest rate) |
| Date Posted: Oct/28/2001 3:36 AM Posted By: xcheckers Rank: Member As for the subordinate debenture thing. BUYER BEWARE. You better do your research AND make sure that rate is also better than publicly traded alternatives. For people with RISK appetite, 8% is a piece of cake in this market, however, whether you get your money back with or without interest can be a crapshoot. DO YOUR HOMEWORK |
| Date Posted: Oct/28/2001 8:37 AM Posted By: SmartShopper Rank: Addicted Member I recently bought 5K worth of I-Bonds using my AMEX card. The website says that they have recently started allowing Amex card. My card gives me 2% cashback on all my purchases for this month. Also I have a card which has 0% APR on balance transfer (no fee too) till June 2002. So I will be making money with almost no investment |
| Date Posted: Oct/28/2001 1:06 PM Posted By: Cyberbishop Rank: Charter Member I only have 0 APR thru Feb 2002 |
| Date Posted: Oct/28/2001 1:14 PM Posted By: gAnjA Rank: Broke Member Is it too late to jump in? still waiting for my fleet card. Whats the rate for nov ibonds? |
| Date Posted: Oct/28/2001 1:36 PM Posted By: Cyberbishop Rank: Charter Member You can still make it if you place your order by Monday, since it takes two days for your payment to go through. The Nov-Apr rate is definitely gonna be lower… Here are my estimates (since I’m no Econ major…) CPI-U (Sep 2001): 178.3 CPI-U (Mar 2001): 176.2 %-change = 1.19% –> annualized rate of inflation: 2.38% (vs. 2.44% for May-Oct bonds) The fixed rate is most likely gonna be lower; I don’t see how they come up with the fixed rate, though Even if the fixed rate stays at 3.00%, the rate for Nov-Apr bonds would be 5.42%. If the fixed rate becomes 2.80%, then the rate would be 5.21%. Message edited by: Cyberbishop on 10/28/2001 13:38:01 |
| Date Posted: Oct/29/2001 2:20 AM Posted By: SUCKISSTAPLES Rank: FW Historian Just because the rates are dropping for November-issue bonds, the deal is still hot! They may go down by 1% but not more than 2%, and the cc rewards you earn stay constant…Plus if you are not buying to hold, but just to keep for 6 months and redeem (losing 3 months interest), then rebuying to earn another CC reward, the rate of the bond doesnt really matter! Example: October I bonds are paying (almost) 6%apr, if you keep for 6 months you would earn 3%, but pay the 3month penalty leaving 1.5% interest return…. November I bonds , even if they only pya 4% apr, earn 2% for 6 months, 1% after the 3 month penalty…so theres only a .5% difference!! People are doing this deal mainly for the CC rewards! Dave..thanks for the suggestion to switch to ClickCiti…surprisingly, I very rarely make online purchases these days, I have tons of Staples cash cards if I need tech stuff and the house is loaded with too many toys as it is…plus printers, scanners, etc. from all the Staples freebie deals! About all I pay for online is the cellphone bill and travel stuff…maybe with ClickCiti I can pricematch Sprint with Cingular or Southwest with Delta?? =) Message edited by: SUCKISSTAPLES on 10/29/2001 02:23:22 |
| Date Posted: Oct/29/2001 9:10 AM Posted By: DaveHanson Rank: Senior Member 6K SUCKISSTAPLES, I hear you on having too much stuff from Staples. As you may know, Clik Citi actually works not just for online purchases, but for any purchase that doesn’t require a magnetic swipe. So phone orders, automated bill-monthly bills, etc. They add a year warranty on everything, allow returns, etc. Everything Blue does but with higher limits, in my experience. Will look forward to your e-mail when you get the chance. Thanks. |
| Date Posted: Oct/31/2001 11:01 AM Posted By: southy1978 Rank: New Member Quote: “American Express was added back to our site this morning, 10/31/01. For any question you may have concerning the issue date for purchases made today, please read the following: Regulations state that the issue date of the bond is based on the date we receive funds from the card issuer. Usually, it takes 2-3 business days to receive the funds. If you buy a bond near the end of the month, your bond’s issue date may be the following month. For example, if you buy a bond on November 29, 2001, your bond’s issue date will be December 2001. At the end of October a number of unique circumstances coincided creating a situation where a large number of customers were unable to complete their orders. We were unable to notify these customers of alternative ways to purchase bonds in a timely manner. Based on the extraordinary circumstances, we waived the regulations determining issue date for the month of October. All orders received in October will receive the issue date of 10/01. Stephanie Savings Bonds Direct Customer Service” End Quote |
| Date Posted: Oct/31/2001 11:18 AM Posted By: YipySkipy Rank: Member Worrying about the CPI inflation adjustment on these bonds is irrelevent I believe. They adjust the INFLATION ADJUSTMENT portion of the return for ALL bonds every 6 months, no matter when you purchase them, therefore the only concern is for the REAL DOLLAR return on these bonds, which may go lower but it may not. The Fed Interest rate change is not a good indicator of longer term rates as it is only the rate on over night borrowing from the FED window….now however, home loan rates are definitly a good indicator of the long term interest rate picture (as we see it now) and probably a good indicator if the REAL DOLLAR return on these bonds is going to go up or down…probably down SLIGHTLY. NOW, this the irrelavency of the INFLATION ADJUSTMENT portion of these bonds is only if you intend to keep them for more than 6 months and cash out. If you are simply doing some short term credit card cash back/cash out after 6 months, then since they will likely be adjusting down the CPI for the next 6 months you wanted to buy them today or before, because its likely that the INFLATION ADJUSTMENT portion will be lower for the next six months.. Okay! but if you are going to buy bonds and keep them for many many years, you are only concerned with the REAL DOLLAR return portion…and although I’m a economist, i’m not a MACRO economist and couldnt’ say if they will lower or by how much the REAL DOLLAR return portion will fall. all this is of course subject to me beign correct that they cpi adjust all bonds every 6 months (which I believe they do, because the whole point is to garanttee a specific real dollar return that cannot loose real dollar value) Message edited by: YipySkipy on 10/31/2001 11:20:33 |
| Date Posted: Oct/31/2001 12:30 PM Posted By: gAnjA Rank: Broke Member southy1978, Wow you got this from their CS? can anybody confirm this. I better jump in now I guess. |
| Date Posted: Oct/31/2001 1:05 PM Posted By: Witold Rank: Ancient Member BenFranklin: To evaluate the prudence of this investment, think about it in the following way. Loans, stock offerings, and bonds are the main ways that companies raise money. They do different deals at different times, but basically, they want their financing to be at the lowest rate that they can get it. That said, here you have a company that is selling bonds at 8%, duration being 4 years. This basically means that no bank offered them a lower rate. This is a tip-off that the company is in a shabby condition. This may be because they are already heavily in debt, or their business isn’t doing well, or that they may have trouble making payments on a conventional loan, had a bank actually given them one. In short, there’s a reason why a company is turing to such an expensive source of financing at the time when interest rates are at their lowest levels in recent history. If you read their prospectus carefully, you will hopefully spot the problems the company is having. Witold http://www.witold.org PS. There’s lots of companies that offer similar rates–read some of the smaller ads in the WSJ for a few examples. I have yet to find one to whom I would trust my money. And believe me, I’m don’t have an aversion to risk: I frequently trade stocks/almost daytrade some weeks according to SEC rule 2520. |
| Date Posted: Oct/31/2001 1:08 PM Posted By: Witold Rank: Ancient Member Question to everyone: Aren’t you exposing yourself to bond price flactuations on this deal? In other words, you will only make your money if you can sell the bond 6 months later for the same price you bought it. Or am I looking at it wrong? Witold http://www.witold.org |
| Date Posted: Oct/31/2001 1:35 PM Posted By: pofig37 Rank: Senior Member Witold, There are no price fluctuations ss these bonds are not traded in the open market. You simply cash them in any bank at their face value plus interest (minus 3 month interest penalty if redeemed before 5 years). |
| Date Posted: Oct/31/2001 2:17 PM Posted By: DaveHanson Rank: Senior Member 6K I would love to see this confirmed. Sent mail to them, but haven’t heard anything back yet. |
| Date Posted: Oct/31/2001 10:00 PM Posted By: trafael Rank: Tired Member oopps seems that no more 30 years bonds… not clear to me whether this includes these savings bonds…. i think it does! anyone? DEAL DEAD???? Message edited by: trafael on 10/31/2001 22:36:38 |
| Date Posted: Nov/01/2001 10:05 AM Posted By: rochea Rank: New Member checked today’s rate for I bonds. The earnings rate is 4.4%. Is there still a deal out there? |
| Date Posted: Nov/01/2001 10:27 AM Posted By: YipySkipy Rank: Member 4.4% IF MY ROUGH CALCUATIONS ARE CORRECT, THAT MEANS THEY DROPPED THE REAL DOLLAR VALUE RETURN OF THESE BONDS FROM 3% TO 2.2%….OUCH!!!!!!! (CALUCULATED USING THE RETURN OF LAST PERIODS BONDS IN THE EARING REPORT). EDITFROM THE GOV WEBSITE)..i WAS A LITTLE OFF BECASUE OF THE FIXED X INFLATION DEAL(I’M NOT A FINANCIAL PLANNER HERE!). THE PREVIOUS FIXED RATE WAS 3% BEFORE RIGHT?…IF YOU ARE INVESTING LONG TERM THE INFLATION RATE IS IRRELIVENT AS IT FLUCTUATES WITH THE CPI, HOWEVER, IF THE REAL DOLLAR RETURN WENT FROM 3% TO 2% THATS A HELL OF A DROP! ============================================================================== How we set composite rates Here’s how we set the composite rate for I bonds issued Nov 2001 – Apr 2002: Fixed rate = 2.00% Inflation rate = 1.19% Composite rate = [Fixed rate +(2 x Inflation rate) + (Fixed rate x Inflation rate)] X 100 Composite rate = [0.0200 +(2 x 0.0119) + (0.0200 X 0.0119)] X 100 Composite rate = [0.0200 + 0.0238 + 0.0002380] X 100 Composite rate = 0.0440380 X 100 Composite rate = 4.40380 Composite rate = 4.40% ============================================================================== Message edited by: YipySkipy on 11/01/2001 10:31:20 |
| Date Posted: Nov/01/2001 10:38 AM Posted By: yosmitesam Rank: Senior Member 30 Year Bond is different than an I Bond, so no worries. |
| Date Posted: Nov/01/2001 4:53 PM Posted By: scamhi Rank: Senior Member Folks, The other issue with I Bonds which no one has mentioned yet is that they physically deliver the bonds to you, they don’t keep it in electronic entry format. Personally, I would prefer electronic book entry, since thats the way most Stocks and other bonds from the us treasury and brokerage accounts are kept in book entry format. If a married couple buys $60k of I Bonds / year, after a few years, do you want to keep all those bonds lying around in your house Personally, I would not keep more than $1-2K in assets sitting at home… I guess you need to open a safe deposit box, which is an extra fee… |
| Date Posted: Nov/01/2001 5:04 PM Posted By: DaveHanson Rank: Senior Member 6K scamhi, I would prefer electronic holding too, but it’s important to note that they DO replace them for free if they are lost or stolen (they are not “bearer bonds.”) Yes, 4.4% is a big drop. I was dissapointed, but not surprised. Wish we could have received confirmation that bonds ordered yesterday would have the october date. Ah well… |
| Date Posted: Nov/01/2001 5:40 PM Posted By: Cyberbishop Rank: Charter Member FYI, the yield for our Oct bonds is 5.42%. Still not too shabby |
| Date Posted: Nov/01/2001 6:01 PM Posted By: MightyAngel Rank: New Member I was reading the following on the I bond interest rate page: An I bond’s composite earnings rate changes every six months after its issue date. For example, the earnings rate for an I bond issued in March 1999 changes every March and September. http://www.savingsbonds.gov/sav/sbirate2.htm If I am reading this right then we should now be enjoying 5.92% for 6 months on the October I bond and then after the 6 months we will start to earn 5.42%. Mighty Angel |
| Date Posted: Nov/01/2001 6:10 PM Posted By: Cyberbishop Rank: Charter Member You’re right At least according to the savings bond calculator, the rate doesn’t get dropped to 5.42% until Apr 2002 |
| Date Posted: Nov/01/2001 6:15 PM Posted By: YipySkipy Rank: Member I DON’T THINK THATS ACURATE…IF YOU LOOK AT THE PAYOUT TABLES YOU WILL GET 5.42% OVER THE NEXT 6 MONTHS(AVERAGED?)…BECAUSE THE INFALTION PORTION OF THE BOND IS READJUSTED. BESIDES, YOU SHOULDN’T CARE ABOUT THE INFLATION ADJUSTED PART, THATS NOT THE GREAT DEAL, THE GREAT DEAL WAS THE 3% FIXED PORTION…QUITE A GOOD DEAL ON BONDS THAT CAN BE HAD IN SMALL DENOMINATIONS. IT DOES LOOK LIKE THEY LOWERED IT TO 2% FOR BONDS PURCHASED IN THE NEXT SIX MONTHS. |
| Date Posted: Nov/01/2001 7:09 PM Posted By: scamhi Rank: Senior Member DaveHanson, Yes, they do replace them for free… Still, I personally don’t desire to even hold them. Its weird because the US Treasury does have direct electronic book entry for other US Treasury Bonds… I have no idea why they don’t do it for I Bonds. Also folks, another issue never discussed when comparing I Bond yields is to compare these bonds is to look at the tax equivalent yield. I Bonds are only subject to Federal taxes, whereas other investments like Bank CD’s and Money Market Accounts is that you have to pay Federal state and local taxes on those other investments. For people in high tax brackets, or live in places with high state/local taxes, that can make a significant difference. Also, taxes due on I Bonds can be deferred until you redeem them, which is probably the most optimal deal. In general, it is best to pay taxes as late as possible, so you are holding on to it and gaining as much as you can from it. Money Market accts even with high yields don’t offer this. Also CD’s are fixed maturity and I Bonds you can effectively control when you will redeem and pay taxes. IMHO, for people in high brackets, the combo of purchasing I Bonds on a CC with deferred/ 0 % APR one time deals could be significantly better than other FDIC choices like CD’s & MM accts… |
| Date Posted: Nov/01/2001 7:16 PM Posted By: Cyberbishop Rank: Charter Member As I poor college student, I think I’ll be better off not deferring my federal tax, especially since I don’t intend on holding on to my bonds til maturity… |
| Date Posted: Nov/01/2001 7:31 PM Posted By: DaveHanson Rank: Senior Member 6K scambi, I think the reason they don’t do electronic holiding is because these are designed for as long-term savings vehicles that individuals will want to keep and redeem at will–unlike other UST bills and bonds. I don’t think that’s very _compelling_ point, but there it is. Good point about the tax deferral benefits. I think I mentioned this either on this thread (or perhaps the fleet mortgage thread? can’t recall now), but it bears repeating. SUCKISSTAPLES is of course right that you can make a marginally better return by redeeming these bonds ASAP after they are elligible for it. However, I won’t be doing this with these bonds UNLESS interest rates go way up or stocks look poised to jump (i.e., the opportunity cost rises.) For now, it’s tough to beat 5+% tax deferred that can be converted to cash just by running over to a bank. Moreover, aside from the hassle or redeeming, the gov’t makes out better if you aren’t hitting them with new CC fees every couple of months, and I’d rather stick it to a nasty corporate entity than Joe taxpayer. (Please understand: I am NOT questioning anyone else’s decision–redeeming them in 6 months is playing by all the rules, and _perfectly_ legitimate.) I just wish my netbank HEL had cleared in October, I would have loaded up with 5x the $5K I bought a few days back. |
| Date Posted: Nov/01/2001 8:37 PM Posted By: scamhi Rank: Senior Member DaveHanson, Interesting point about the electronic holdings… BTW, one other added fact is that, for the moment, you CAN redeem bonds immediately: Text. Apparently, the deal is only for 2 months and only for disaster recovery areas. While I don’t believe that one should ‘scam’ and go for miles/rewards by using the bonds as a vehicle to rotate purchases through your credit card, but the fact is that right now certain folks can purchase and immediately redeem I Bonds. Also, it seems like maybe some kind soul could summarize all these financial tidbits about I Bonds, mortgage deals, tax advantages into some sorta FW Finance FAQ? There appears to be the beginnings of duplication… |
| Date Posted: Nov/04/2001 12:34 PM Posted By: emaij Rank: Senior Member 1K What cards have 2% cash back? Message edited by: emaij on 11/04/2001 12:37:20 |
| Date Posted: Nov/04/2001 2:56 PM Posted By: Cyberbishop Rank: Charter Member Bank of American’s Rewards Visa pays up to 2%, for example… Message edited by: Cyberbishop on 11/04/2001 14:56:14 |
| Date Posted: Nov/05/2001 3:09 AM Posted By: SUCKISSTAPLES Rank: FW Historian southwest visa’s net earnings are around 2% if you sell the free tix on ebay (although their value has gone down since 9/11) I agree that if you got October I bonds, they are a good investment and should be kept rather than immediately redeeemed to reap the CC rewards… but if you want to run money through your rewatds CC, remember it doesnt matter if you get November Bonds!! go get them now!…making 2% every six months in CC rewards (4% APR TAX FREE…not even counting the bond interest) is well worth it… BTW, my Orders placed on 10/26 arrived saturday, have a 10/2001 date, and were issued 10/31/01…I am waiting to see what my bonds ordered on 10/27 will show…. |
| Date Posted: Nov/07/2001 12:53 AM Posted By: cache Rank: Senior Member I have a question about the $30K purchase limit per year. I read the following: “I Bonds purchased as gifts using your own Social Security Number (because you didn’t know the recipient’s) won’t count towards your annual purchase limit; however, they will count towards the annual purchase limit of the gift recipient.” I buy ibond under the name and ssn of a minor, can I sell the bond after six months? |
| Date Posted: Nov/07/2001 1:01 AM Posted By: Cyberbishop Rank: Charter Member why not? The SSN is only for tracking purposes (in case you lose/ destroy it). No earnings will be reported to the IRS until you redeem your bonds. Whether you choose to defer reporting is totally up to you (the IRS will find out eventually anyway…) From Cashing Options You can cash bonds for your child if he’s too young to sign the request for payment and he lives with you or you’ve been granted legal custody. Message edited by: Cyberbishop on 11/07/2001 01:06:53 |
| Date Posted: Nov/07/2001 11:05 AM Posted By: cache Rank: Senior Member Cyberbishop, Thank you for your reply. You are right, it may work, but I have not tried it yet. A few questions to those who tried: * when you purchase the ibond for a minor using your own credit card, do they check to match the owner of the CC with the owner of the ibond? * if you sell a ibond owned by a child, can you recycle the money to purchase more but not reaching the gift limit (I think it is $10K per year). I am just trying to see if there is an easy legal way to break the $30K/year limit. |
| Date Posted: Nov/09/2001 12:01 AM Posted By: SUCKISSTAPLES Rank: FW Historian I can now confirm that bonds purchased 10/27, but having a november printing date HAVE AN OCTOBER ISSUE DATE!!! |
| Date Posted: Nov/09/2001 10:51 PM Posted By: cache Rank: Senior Member Anyone here manages to find a way to break the limit of $30K per year? |
| Date Posted: Nov/10/2001 12:10 AM Posted By: SmartShopper Rank: Addicted Member I bought bonds on the Oct31st and still has the issue date of OCT. |
| Date Posted: Nov/10/2001 1:24 AM Posted By: Cyberbishop Rank: Charter Member Since nobody has replied… I don’t see how you can work around the purchase limit; all that matters is the amount of bonds that’s registered under your name per year. So no matter how you got your money (from your own savings or from the sale of a minor’s bonds), you can’t buy/ register any more under your name beyond the $30,000 limit. As for the $10000-gift limit, were you refer to the limit on all kinds of (monetary) gifts in general? I don’t see any limit on buying I-bonds as gifts The way I see it is your max per year = $30,000 + $10,000 per gift recipient who’s a minor (assuming you haven’t used up that $10,000 in any other way…) |
| Date Posted: Nov/10/2001 1:50 PM Posted By: cache Rank: Senior Member >The way I see it is your max per year = $30,000 + >$10,000 per gift recipient who’s a minor (assuming you >haven’t used up that $10,000 in any other way…) Cyberbishop, My question is can you recycle the child’s money? I think my max per year = $30K (for me) + $20K (for minor)= $50K. I can give the child only $10K, but then you sell the $10K after 6 months, recycle the money to buy the ibond again. It is similar to buying or selling stocks many times under the child name. You don’t count the gross as the gift, only the original deposit. Message edited by: cache on 11/10/2001 13:53:00 |
| Date Posted: Nov/14/2001 1:39 AM Posted By: chuckles007 Rank: Senior Member |
| Date Posted: Nov/14/2001 9:54 AM Posted By: boden11 Rank: Senior Member Why would you want to have more than 30k invested in I-Bonds? That’s going crazzzyyyy. And BTW if you have a mortgage and the % is > than the % on the I-bonds, you’re better off just putting the extra money to pay down ur mortgage. (unless you only have a few years remaining…like 5-7 yrs left…) |
| Date Posted: Nov/14/2001 10:24 AM Posted By: DaveHanson Rank: Senior Member 6K boden11, -I-bonds are liquid after 6 months. If you need cash within a year, they are a great deal–especially since they can be purchased with rebate CCs, more than offsetting the 3 months interest early redemption penalty. -mortgage interest is tax deductiable if you itemize. I-Bonds are tax deferred until you redeem them. -if you prepay the mortgage, you can’t get that cash back out without a refi. By buying i-bonds, you can earn interest on it and cash it whenever you want. -if your mortgage is low and fixed (like for the recent netbank deals), why prepay it? If rates jump 5 points within 2 years (not unlikely), you can cash in your i-bonds and buy much higher paying new ones, meanwhile keeping your nice low mortgage. I-bonds are more attractive now as a flexible place to park cash (that isn’t needed within 6 months) than as a long term investment, but understood in that light they can make a lot of sense. |
| Date Posted: Nov/14/2001 10:32 AM Posted By: boden11 Rank: Senior Member Ok, well this deal does sound interesting, however to really maximize my savings, does any one know a good cash back card that offers a 0% intro APR for at least 4-6 months? It seems if I could get enuff money to play with…you’d get like 2 months float almost out of each one, plus the % from cc…combined with 0% apr for many months….wowza. What would be the best credit card for milking this deal? |
| Date Posted: Nov/14/2001 1:50 PM Posted By: Cyberbishop Rank: Charter Member I’m don’t know of any running promotions, but I did charge my I-bond purchase on my new Citi HiltonHhonors card with 0 APR thru Feb 02. That’s only like 3 months, though. There are more cards that offer 0 APR on balance transfers for a longer period of time (up to a year), and the transaction fee on the transfer often maxes out at around $50. |
| Date Posted: Nov/14/2001 3:20 PM Posted By: boden11 Rank: Senior Member I dunno, I couldn’t see the 0 apr on balance transfers helping much…since the $50 fee would more than eliminate any 1-2% you got from the purchase of the bonds. IE– even w/2% cash back (even tho u need to spend like 15k to reach this level, lets just assume 2%) it doesn’t help much. You are only allowed to purchase 1k/month of savings bonds…even with a 2 month float, mebbe you could manage to squeeze in 3 purchases? that’s $60 in savings…transfer all over to 0% APR (-$50 cost)…then you net $10 and have some more months to only pay min balance @ 0%. However, one screwup (timing the 3 bonds in 2 months from float) could easily cost way more in fees than the 2% cash back and 0% APR from the new cc. And realistically, you probly will only get about 1% cash back…oh well >>>I’m don’t know of any running promotions, but I did charge my I-bond purchase on my new Citi HiltonHhonors card with 0 APR thru Feb 02. That’s only like 3 months, though. There are more cards that offer 0 APR on balance transfers for a longer period of time (up to a year), and the transaction fee on the transfer often maxes out at around $50. |
| Date Posted: Nov/14/2001 4:07 PM Posted By: Raiz Rank: Ancient Member I receive 2% cashback on all my purchases with my Amazon Nextcard. The purchases do go towards gift certificates, but it’s still a full 2%. |
| Date Posted: Nov/14/2001 8:38 PM Posted By: SmartShopper Rank: Addicted Member Its not true that you can buy only a max of 1K of I-bonds per month. I bought almost 6K in October alone. You can probably buy as much as u want as long as its within the 30K specified limit. |
| Date Posted: Nov/14/2001 9:05 PM Posted By: sb Rank: New Member Is 3 months the earliest you can withdraw the money? ie: Why not buy $30k worth, and then cash them in the next day for 0% interest (or whatever) and still keep the 2% cash back? (And do this everyday….!) Hmmm, this cash back credit card has my wheels turning now….. Is there a more liquid way to “buy things” that can be returned to cash? What if 2 people pay each other $30k each, which nets out., but they both amass the cash back ??? Is that taxable income? Could you net that out as some kind of Schedule C business expense? eg: My schedule C business pays you $50k for services. At the same time, your schedule C business pays me $50k for services (or advertising, or whatever) That way, our businesses have expenses and revenues of 50k each, netting out to 0, no taxes, and we both amass $50k on the credit card. Where is the hole in this? |
| Date Posted: Nov/17/2001 9:44 AM Posted By: Danfromfla Rank: Geeky member DaveHanson, You seem a little confused about Ibonds. Let me help. Ibonds are adjusted for inflation and pay a fixed 2% plus the variable amount (updated quartly). Therefore, you wouldn’t be cashing the Ibonds in to purchase higher paying ones. The original Ibonds will begin earning the adjusted amount when the rates change. Also, you have to wait 6 months before cashing them. If you wait 5 years or more, there is no penalty for cashing them. Hope this helps. Daniel You originally wrote: “-if your mortgage is low and fixed (like for the recent netbank deals), why prepay it? If rates jump 5 points within 2 years (not unlikely), you can cash in your i-bonds and buy much higher paying new ones, meanwhile keeping your nice low mortgage.” |
| Date Posted: Nov/17/2001 3:18 PM Posted By: Cyberbishop Rank: Charter Member I think he’s referring to when the fixed rate gets higher than the 2% they are paying now… He’d then cash in his bonds and buy new ones that have a higher fixed rate… |
| Date Posted: Nov/21/2001 1:39 AM Posted By: SUCKISSTAPLES Rank: FW Historian It was originally rumored that you could only get $1k in bonds per month, we found that to be FALSE. The rule, as stated the website, is $1k per website transaction. You can do MULTIPLE transactions in quick succession. I purchased $16k in Oct w/o problem (except for a “server error” on the website) |
| Date Posted: Nov/21/2001 9:19 AM Posted By: DaveHanson Rank: Senior Member 6K I appreciate the offer of help, Danfromfla, but your inference is incorrect–no confusion here. While the inflation adjusted component of i-bonds does indeed adjust, the fixed component does not. Hence, a bond purchased in October will yield 3% plus the CPI number FOR THE LIFE OF THE BOND, up to 30 years. A November bond will yield a fully point less FOR THE LIFE OF THE BOND (an even less than that for the first few monts.) If you or anyone else is confused about this, check out http://www.savingsbonds.gov/sav/sbirate2.htm for the authoritative scoop. Let me know if my post still doesn’t make sense to you, and I’ll try to clarify further. Thanks, Dave |
| Date Posted: Dec/14/2001 6:49 PM Posted By: Danfromfla Rank: Geeky member Dave, Good catch! You taught me something new today and I thank you for it. I-Bond fixed rates vary. Makes me happier just to think about it. DanfromFLA |
| Date Posted: Dec/15/2001 11:43 AM Posted By: cache Rank: Senior Member I already have the max $30. What next? The EE bond has only 4.09% |
| Date Posted: Dec/16/2001 9:42 PM Posted By: SUCKISSTAPLES Rank: FW Historian what next?? put them in friend/relative/childs name! |
| Date Posted: Dec/16/2001 11:50 PM Posted By: cache Rank: Senior Member suck, I think it is possible to do it under a child. Has anyone here really done it? For friends and relatives, it would be harder. Because who is going to pay the tax when you cash in? Message edited by: cache on 12/16/2001 23:51:47 |
| Date Posted: Dec/17/2001 8:43 PM Posted By: SUCKISSTAPLES Rank: FW Historian yes you can DEFINITELY put them in childrens names, wife, etc///$30k per person…. |
| Date Posted: Dec/27/2001 4:48 PM Posted By: BIGTCQB Rank: Senior Member The last day to purchase a bond with a December 2001 issue date is December 30th. The purchase date/time is based on Eastern Standard Time. |
| Date Posted: Dec/27/2001 8:38 PM Posted By: WalStMonkey Rank: Senior Member 1K Hey BIGTCQB, does that mean the last day to enter an order, or the last day they can receive the money from the credit card processing company? link 5th question and answer down. Message edited by: WalStMonkey on 12/27/2001 20:40:40 |
| Date Posted: Jan/07/2002 11:33 PM Posted By: cache Rank: Senior Member I have not made ibond purchase this year. If the interests go up in April, then I should wait to buy in April, right? or should I buy the ibonds now? |
| Date Posted: Jan/08/2002 2:11 AM Posted By: boden11 Rank: Senior Member ure soo funny…hhahahaha. if interest rates go up…hahahahhahaha ok, there’s always that slight chance that the fed may go .25 higher, but i doubt it’s coming any earlier than mebbe the 2nd half of ’02. so far the consensus is one more .25 cut …and that’s pretty much all they can do. (well if the economy starts crumbling more, they might give up another .50 – .75…but that’s highly unlikely; would probly take large-scale terrorist attacks like 9/11 to get us to that sense of urgency). |
| Date Posted: Feb/21/2002 1:37 PM Posted By: knighthawke Rank: Senior Member 4K Am I wrong in assuming that it’s “techincally” not 6 months we really have to hold these bonds? I mean, say I buy a $1000 bond February 26th and it shows up with an issue date of February. If I have to hold it for 6 months, that means I can cash out anytime in August? Say Aug 1st? So it’s really 5 months (and a couple of days) we have to hold them? Plus, would it then be safe to say, depending on your credit card billing cycle, that for up to a three or so week period after you buy the bond, you do not have to pay interest while the money you would use to buy the bond is still getting interest, say from a money market fund? So now it looks like: 1) Only have to hold the bond for 5 + months 2) Gain up to several weeks of interest BOTH on your bond and on wherever else the money you are buying with it lies. If someone would figure all that into the equation, the rate of return is really a lot better then we thought eh? |
| Date Posted: Feb/21/2002 1:59 PM Posted By: potayytoe Rank: Member 1) Be careful about putting your child’s name in the I Bonds… it might disqualify the bond from being tax free if used for education. 2) Technically, one could argue that you don’t have to hold it for 6 months to avoid penalty, but why risk it ? I realize that is how the Treasury Department calculates interest rate, but we do not know for certain that this is how they also calculate the holding period… it could be different. There comes a point when pushing a good deal too much is not worth the hassle. |
| Date Posted: Feb/22/2002 8:23 AM Posted By: prozario Rank: Senior Member 1K A new twist in the US Savings Bond deal. I just got Fleet Platinum card which has 2% rebate that they’ll pay in EE Bond. So, when you charge $2500 in CC, you’ll get a $50 Savings Bond mailed to you. There is a $50 annual fee – which is waived for the first year plus you get 6 months of 0% APR. So, you can hold the BONDS for 6 Months, and then sell it and get little over 3%(2% from CC, plus little over 1% from Bond – 6 months interest, minus 3 months penalty), and do it twice per year, and get around 6% return. Even with the $50 annual fee, I think it’s a hot deal, if you’re charging around $5-$10K. |
| Date Posted: Feb/22/2002 8:28 AM Posted By: RussianInNYC Rank: Senior Member The trick here that EE-bons are sold at half face value So, when you see them after 6 month you would get 3 month interest on $25 only |
| Date Posted: Feb/22/2002 8:30 AM Posted By: prozario Rank: Senior Member 1K Thanks for the obversation … I totally missed that. |
| Date Posted: Feb/22/2002 9:39 AM Posted By: potayytoe Rank: Member Interest rate on EE bonds are different than I bonds |
| Date Posted: Mar/03/2002 4:56 PM Posted By: RagingBull Rank: Ancient Member If I purchase bonds from savingsbond.gov, is there a location in application where I can list that I want to use this as my traditional IRA? |
| Date Posted: Mar/03/2002 8:22 PM Posted By: Cyberbishop Rank: Charter Member In the bond’s registration, maybe? 360.6 Registration Choices INDIVIDUAL RETIREMENT ACCOUNTS Registration in the name of an individual or non-financial institution, as custodian, is not acceptable unless proof of IRS approval is provided. Financial institutions can qualify as either custodians or trustees. A custodian of an account does not normally have title to the account. Under Internal Revenue Code and implementing regulations, an IRA custodial account and an IRA trustee account are comparable. The trustee or custodian must report to IRS the interest paid to the IRA account. Public Debt will report the interest paid to the trustee or custodian of this account. XYZ BANK TRUSTEE FOR JOHN DOE IRA U/A DATED 12/12/90 12-3456789 EIN (Use the EIN of the financial institution.) XYZ BANK CUSTODIAN FOR JOHN DOE IRA U/A DATED 12/31/90 12-3456789 EIN (Use the EIN of the financial institution.) XYZ BANK TRUSTEE FOR JOHN DOE IRA U/A DATED 12/31/90 FBO JANE DOE 12-3456789 EIN (Use the EIN of the financial institution.) Message edited by: Cyberbishop on 03/03/2002 20:27:50 |
| Date Posted: Mar/04/2002 1:27 AM Posted By: RagingBull Rank: Ancient Member huh? i don’t understand that. |
| Date Posted: Mar/04/2002 6:14 PM Posted By: trafael Rank: Tired Member dont see the benefit of using traditional IRA to buy savings bonds. you are taxed at the end when you sell the bond, regardless of this being outside or inside the IRA. the bond grows tax deferred anyway even outside the IRA… correct me if i’m wrong |
| Date Posted: Mar/06/2002 2:53 PM Posted By: cache Rank: Senior Member knighthawke, I thought you could cash in on July 1. So you earn 6 months interests from 4 months money. Right? |
| Date Posted: Mar/06/2002 4:40 PM Posted By: chenwilliam Rank: Member knighthawke and cache, don’t forget the 3-months interest panelty if you cash the bond within five years of purchase. If you buy a bond on feb 26, you can cash it on August 1st. I think you have to hold the bond for at least six months: feb,mar,apr,may,jun,jul -> six months if you but the bond using creditcard, you get 5 months of interest: 6 months bond(minimum holding time) + 2 months bank – 3 months penaulty = 5 months interest gained from money. This is not so bad if you buy the bond using cashback credit card, or if the bond rate is better than your bank rate. Hope this helps Felix |
| Date Posted: Mar/22/2002 2:11 PM Posted By: RagingBull Rank: Ancient Member wait if i buy bond in april i get interest since jan? isn’t it best to buy bonds close to end of month? |
| Date Posted: Apr/02/2002 2:41 AM Posted By: RagingBull Rank: Ancient Member Good time to get bonds now? Do you people think the core interest rate for ibonds will shift up in May 1 ? |
| Date Posted: Apr/02/2002 3:58 AM Posted By: puckerpook Rank: Member I read this and am confused about one thing. Don’t you have to pay taxes on things such as rewards from credit cards and rebates from companies. I’m pretty sure companies claim these promotions as tax deductions and thus the person who receives them is responsible for paying taxes. I bet a lot of people don’t pay taxes on these things, but I just want to know if by law you are responsible for taxes on items gained through promotions. Maybe not rebates since you already pay extra sales tax and I don’t ever recall a tax warning on rebate forms, but I’m almost sure you have to pay taxes on credit card rewards which is why all rewards cards have a warning that says you are responsible for all applicable taxes. but then again, I know almost everyone does not pay the sales and use tax they owe to their state when they buy stuff from a company outside their state and I have never heard of anybody getting in trouble for this practice. Message edited by: puckerpook on 04/02/2002 04:08:40 |
| Date Posted: Apr/02/2002 5:13 AM Posted By: SUCKISSTAPLES Rank: FW Historian does ANYBODY pay taxes on the rewards they receive from credit cards?? NO! Thats why many CC’s limit annual earnings to $300 or so, below the $600 threshold where a company must collect your SSN and report the earnings to the IRS. Dont worry about credit card rewards. |
| Date Posted: Apr/02/2002 3:30 PM Posted By: puckerpook Rank: Member Just because it is not reported does not make it legal to hide the income. Tax evasion is still tax evasion even if it is only on 300 dollars. I just want to keep up with tax laws and just wanted to know if the rewards were taxable. Of course most people would not report the income, but if I am supposed to then I will do so. |
| Date Posted: Apr/02/2002 7:30 PM Posted By: cache Rank: Senior Member suckstaple, how did you know about this $600? If I got more than the $600, should I report? |
| Date Posted: Apr/02/2002 8:52 PM Posted By: SUCKISSTAPLES Rank: FW Historian I have seen the $600 reporting threshold when I was an affiliate for stamps.com and when working as an independent contractor for a company…as log as they pay you less than $600 in a year, they dont need to record your SSN and report any income to the IRS. |
| Date Posted: Apr/02/2002 10:20 PM Posted By: RagingBull Rank: Ancient Member SUCKISSTAPES: know anything about ibonds. think it’s a good time to buy now or in May. I’m not sure whether interest rate will go up or down |
| Date Posted: Apr/02/2002 10:42 PM Posted By: SUCKISSTAPLES Rank: FW Historian remember if you are buying them with a rewards credit card and cashing them in every 6 months (to earn double CC rewards yearly) it really does not matter whether the rate of the bond is 4% 5% or even 6%, as the primary benefit is the cc reward percentage (up to 4% APR alone!) Message edited by: SUCKISSTAPLES on 04/13/2002 15:30:34 |
| Date Posted: Apr/02/2002 11:41 PM Posted By: RagingBull Rank: Ancient Member I have the fleet rewards card which gives up to 2% and the bank of america rewards which give up to 2% , my money is tied with ING now for a mere 3%, so i think it would be best for me to wait till early may to purchase the bonds and obtain the few extra percentage points of interest. |
| Date Posted: Apr/13/2002 5:25 AM Posted By: RagingBull Rank: Ancient Member The best time to buy bonds is now. Most likely interest rates will not go up till August at the earliest. In addition, the last core interest rate for the ibond was 2.5% for the funds rate. It wasn’t until 11/06/01 when rates were droped to 2% and finally 1.75% on 12/11/01. In addition, the core rate was based on the 2.5% funds rate determined on October. I would give it till late next year before bond rates will be the same as they are now. |
| Date Posted: Apr/13/2002 3:30 PM Posted By: SUCKISSTAPLES Rank: FW Historian I AGREE. BEST TIME TO BUY BONDS IS BEFORE MAY! |
| Date Posted: Apr/13/2002 6:23 PM Posted By: RagingBull Rank: Ancient Member In addition whose to say that the government might start issuing bonds based on dates and not months nor whose to say that credit card companies may put bonds as exceptions to getting reward points |
| Date Posted: Apr/15/2002 2:57 PM Posted By: RagingBull Rank: Ancient Member would I still be profiting if I got a rewards card with 1% cashback? |
| Date Posted: Apr/15/2002 5:21 PM Posted By: WalStMonkey Rank: Senior Member 1K RagingBull, why the heck would the CC company care as long as they’re getting their percentage? If things change, then it’s time to reevaluate. But things are the way they are, not the way you worry they might be. |
| Date Posted: Apr/15/2002 7:51 PM Posted By: cache Rank: Senior Member If I buy more ibond before May, I have to sell some of the earlier ibond which has higher core rate. Is it really smart to do it? |
| Date Posted: Apr/15/2002 9:43 PM Posted By: RagingBull Rank: Ancient Member nope no point. |
| Date Posted: Apr/16/2002 6:57 PM Posted By: yurgreat Rank: Senior Member 3K cache, the main chunk of your interest is from the credit card rewards. unless the core rate was considerably higher, i would sell. |
| Date Posted: Apr/16/2002 7:50 PM Posted By: DaveHanson Rank: Senior Member 6K yurgreat is right cache. If you have a 2% rewards card and are interested in churning them as SIS recommends, you’ll want to sell. Now, your October ibonds are better deals than the April ones are if you want to hold them as an investment, and not just churn. I will probably buy $5k more myself next week, but will use a 0% BT offer or HELOC capitale to buy them, so I don’t need to redeem the $5K I already have. It would be interesting to me to know what the govt has to pay the CC companies for these transactions. I bet it’s 2% or worse. If they were getting raped, I’d be less inclined to do these deal. There is nothing dishonest or unethical about it, but I’d just as soon not exploit a gov’t provided convenience feature if they loose more from it than I gain. Question: Can anyone confirm that you can redeem ibonds purchased in, say, late October in early April, that is, 6 monthly periods later (but not literally 6 full months later?) Also, if someone wants to buy ibonds before the May rate change and doesn’t have a rewards cc, I could probably swing buying them for them at $985 to me (paypal, mo, etc.) for a $1,000 bond. Just a thought, not a solicitation. |
| Date Posted: Apr/16/2002 9:08 PM Posted By: chenwilliam Rank: Member DaveHanson, you can redeem the bonds you purchased ANYTIME in October as early as Apirl 1st. You probably don’t want to cash them out now, as you will not get any interest during Apr 1-16. I probably wait till May 1st to cash them out, that’s if you don’t need the money in a hurry. If you don’t believe me, try the saving bond wizard on the bond website. P.S. Anyone know for sure that the bond rate will go down? I mean, the inflation got to be higher than october, right? |
| Date Posted: Apr/16/2002 10:48 PM Posted By: RagingBull Rank: Ancient Member inflation now is actually lower than before believe it or not that is why the government sees no fear in continuing dropping interst rates. |
| Date Posted: Apr/16/2002 11:08 PM Posted By: cache Rank: Senior Member My problem is I maxed out the $30K and don’t feel quite comfortable using someone else’s ss#. |
| Date Posted: Apr/17/2002 12:10 AM Posted By: DaveHanson Rank: Senior Member 6K Thanks chenwilliam. I would predict that the rate will drop in May, tho probably not a lot. cache, I really wouldn’t worry about using someone else’s SS #, if it’s a spouse or close relative. Just get their permission you can name two beneficiaries on the ibond anyway. |
| Date Posted: Apr/17/2002 4:10 AM Posted By: SUCKISSTAPLES Rank: FW Historian I bonds likely to go down in May, remeber the key here is to redeem every 6 months to earn the CC rewards! |
| Date Posted: Apr/17/2002 8:37 AM Posted By: alex7 Rank: Member DaveHanson, there’s a great tool on the savingsbonds website — the “Savings Bonds Calculator”. Besides showing you what your bonds are currently worth, it will show you what they will worth the next month, and most importainly, it will help you figure out when you can redeem your bonds. Just play with the dates (both the issue date and the current date) and pay attention to the “Note” codes. Here’s the direct link to the calculator. |
| Date Posted: Apr/17/2002 11:43 AM Posted By: sunrise Rank: Senior Member Is there any CC around right now which will give 0% APR as well as some reward points ? Otherwise I am inclined to go with FarmBureau bank (upto 2% cashback) or my Northwest mileage US Bank credit card (equivalnet to 2% cash back). |
| Date Posted: Apr/17/2002 1:09 PM Posted By: sunrise Rank: Senior Member Another question : I read that SIS, DH are recommending that we keep the money for long term to reap full benefits from I-Bonds, but to my mind if I redeem the bonds every 6 months and invest on another bond after 6 months, then I can get points from CC, and then only we can reap max harvest. Is there anything wrong in my argument ? |
| Date Posted: Apr/17/2002 1:12 PM Posted By: yurgreat Rank: Senior Member 3K using HELOC to buy bonds? hm..i never thought of that b4, but i guess it makes sense. deepgreenbank is 4.99% – 1% (tax deduction if in 20% bracket) = 3.99%. bonds w/rewerds card = ~6% profit 2% at no risk. hm..but then again, why not just stick it in a money market acct? netbank is 2.75% |
| Date Posted: Apr/17/2002 1:41 PM Posted By: DaveHanson Rank: Senior Member 6K thanks alex7, good post. Interestingly, that calculator shows that $1000 bonds from Oct accrued 14.80 interest, while Nov bond accrued no interest yet. I wonder if that’s simply because they aren’t elligible for redemption yet? Then again, I’m probably just betraying my ignorance RE exactly how these things are calculated. sunrise, actually, you’re making the same argument that SIS makes (and I concurred with.) I also added that if one WOULD want to retain any of the ibonds for longer periods, rather than just churn them through CC redemptions, it would make sense to keep the pre-November bonds, since the interest rate is a full point higher for the life of the bond (and more until the October interest rate is reset.) If you are out for the very highest return from ibonds, AND have a good rewards CC, AND don’t mind the hassle of redeeming the bonds, depositing the $, and buying new bonds every six months rather than just holding them, AND don’t care whether the treasury looses money on your gaming the system like this (most don’t seem to care, for me personally it’s a gray area), then the sell as soon as possible and rebuy strategy is the way to go, no question. Keep in mind that a 5+%, liquid return is a pretty hot deal these days. And if you follow the redeem stragegy, your $ aren’t liquid for another six months (or 5+, actually), every time you redeem. yurgreat, DGB’s HELOC is actually 4.70, and that’s only if you use less than 1/2 of your line. If you use 75% or more, it’s 4.45% Or coures this will rise somewhat as the prime rate rises. It is deductible only if you itemize, and only for the first $100k (for this purpose, more if you use it to fix up a home.) don’t know if it’s been mentioned, by ibond interest used for qualifying educational expenses is also tax-free (see the web site.) |
| Date Posted: Apr/17/2002 2:14 PM Posted By: sunrise Rank: Senior Member DH Thanks for the clarification |
| Date Posted: Apr/17/2002 2:22 PM Posted By: alex7 Rank: Member > DaveHanson, you are correct that it shows no interest because they’re not yet eligible for redemption. If you pay attention to the last column and refer to the legend below the table, it will begin to make sence. Also, you can play with issue date on top to get an idea of when your bonds will become eligible for redemption. What’s confusing to me is how the interest amounts are calculated — I could not arrive to the same result that this calculator shows. Maybe someone can figure it out? |
| Date Posted: Apr/17/2002 4:06 PM Posted By: DaveHanson Rank: Senior Member 6K you bet sunrise alex7, actually the columns generally did make sense to me on first inspection, including all surrounding notes–I just found it curious that it would show no interest accrused IN ADDITION TO not being available for redemption. I gather that the math works because they are subtracting 3 months of interest from the interest accrued. 3 months interest @ 5.x% annually is a little under 1.5. It does seem a little high to me, actually, but it would depend on exactly how they calculate it. |
| Date Posted: Apr/17/2002 6:39 PM Posted By: SUCKISSTAPLES Rank: FW Historian There were 2 strategies on the I bonds, because their rate changed significantly in Nov 2001. I think the consensus was that people who bought Ibonds pre=Nov 2001 got a high 5.92% rate, after November the I bonds dipped to 4.4%. So if you got the 5.92% bonds, it made sense to hold them as thats one of the best investments available right now…and if you redeem them you cant buy more at the 5.92% rate. If 5.92% beats what banks offer for the next few years, it makes sense to keep these. If you bought the bonds at 4.4%, its not as great of an ivestment to hold for long-term, and you can redeem and rebuy at the same rate, earning more CC rewards… |
| Date Posted: Apr/17/2002 8:04 PM Posted By: RagingBull Rank: Ancient Member that assume rates stay the same. it might be lower |
| Date Posted: Apr/17/2002 10:08 PM Posted By: SUCKISSTAPLES Rank: FW Historian with a 4% bond rate, it is better financially to redeem evry 6 months using a 2% rewards card, as that gives you a 4% APR all by itself not even counting bond interest…. 4.4% isnt that great of a deal that you must “hang onto” when even some checking accounts paying 3.5% The title of this thread should probably be changed, as buying bonds now is more like a “safe 6%” with a little work”. The old bond rate of 5.92% is significantly higher than any 6 month or even 1 or 2 year CD, and would you “barely” do better if you redeemed these every 6 months…on the other hand, you would do significantly better buying and redeeming the 4.4% (or lower) bonds b/c of the fixed CC rewards rate of 2% every six months (4%APR) |
| Date Posted: Apr/17/2002 11:02 PM Posted By: RagingBull Rank: Ancient Member isn’t the max you can purchase per year is $30000, so if you bought $30000 and resell , can you still buy $30000 more? Also, I’ve been rejected with Farm burau and my choices left that is best is fleet with only 1.7%. |
| Date Posted: Apr/17/2002 11:26 PM Posted By: Cyberbishop Rank: Charter Member buy $15000— sell $15000 ——————– buy $15000 Apr—————Oct ? Message edited by: Cyberbishop on 04/17/2002 23:27:09 |
| Date Posted: Apr/18/2002 1:21 PM Posted By: cache Rank: Senior Member Since I am maxed out the $30K, I am looking at using other SS#, and then I am the co-owner. My first question is, would the $10K/per year gift limit to the amount you can purchase? The second question is about how legal it is, I tried to search the bond site, it has some mentioning of the chain-letter illegal practice, but did not mention whether the buy-sell-buy-sell. How likely using someone else’s SS# and buy-sell to cause trouble? |
| Date Posted: Apr/18/2002 6:22 PM Posted By: WalStMonkey Rank: Senior Member 1K cache, why not consider some EE bonds? That will get you an additional $15k in actual value. The difference in rates is now very small as well. FYI, there is no ‘gift limit’ of 10k. You may give gifts for as much as you like. There is a requirement that you have to file a gift tax return if you give someone more that $11,000 in a year. There is no gift tax until you give away a $million. There are no gift tax issues between husband and wife. So if you’re married you can do $90k in bonds between you. It is perfectly legal to cash in the bonds the first day of the seventh month after the issue date. Those are the rules. Why in the world would they tell you you could do something illegal? The problem with using an SSN other than your own or your spouse’s is that the income is going to be reported on a 1099-INT to the IRS. |
| Date Posted: Apr/18/2002 10:13 PM Posted By: cache Rank: Senior Member WalStMonkey, Can you explain more about the gift tax return limit of $11K? How do you file? I always thought that the max one person to one person is $10K per year. So you can not give $30K to your child, right? The best you can do is to give $20K person from both you and your spouse each giving $10K. |
| Date Posted: Apr/19/2002 11:31 AM Posted By: WalStMonkey Rank: Senior Member 1K cache, you can give away as much money as you like. You just might have to pay the gift tax if you give away too much to the wrong people. The gift tax is so you can’t avoid the estate tax by giving your money away before you die. You get to exclude so much from being taxed. This year the amount is $1 million. Next year it changes. So you may give me $1 million and no tax will be due. However, you will have to send a note to Uncle explaining what you did. Then, when you send me another $million next year, you will have to pay taxes on that gift. If you gave me less than $11k you don’t have to tell Uncle. The 11k used to be 10k last year, but that’s old news. Next year 11k will be old news, but I’m not sure what the increase will be. BTW, if you want to give me $44,000 without filing a gift tax, you give me $11k, you’re wife does also, then you both give $11k to my wife. I have no clue how you file. I’m sure you could find the form on http://www.irs.gov. |
| Date Posted: Apr/19/2002 9:56 PM Posted By: yurgreat Rank: Senior Member 3K ok, lets say i bought the bonds on nov 30th. i still get the interest if i cash them on may 1st, right? and there’s no gift tax unless over $1million? you just have to file paperwork if over 11k??? got a link? |
| Date Posted: Apr/20/2002 11:32 PM Posted By: cache Rank: Senior Member WalStMonkey, Is this $11k the U Minor Gift Act thing or is something new? I remember the Gift to Minor is limited to some amount (like $10K) per year ( you can not give more than $10K from one person to another), and some amount (half mil) for the life time. It would be nice if you can provide a link so that we know exactly what is the limit and terms. yurgreat, I am not sure you will get it if you order the 30th. I usually order a few days before the 30th. Let me know if it is OK to order as late as 30th. |
| Date Posted: Apr/21/2002 3:00 PM Posted By: happypants Rank: Senior Member 2K here’s the link on the IRS web site for filling out form 709 (gift tax reporting): http://www.irs.gov/formspubs/display/0,,i1%3D50%26genericId%3D10591,00.html |
| Date Posted: Apr/22/2002 10:41 PM Posted By: RagingBull Rank: Ancient Member so any predictions on what the new inflation part of the bond rate will be for May? I Bonds will usually increase in value every month, and interest is compounded semiannually. <– does this mean that interest is aadded to my bond only twice a year so if my bond is 10 months old, i only get 6 months worth of interest and not 10 months? |
| Date Posted: Apr/23/2002 11:59 AM Posted By: sunrise Rank: Senior Member I see they have increased the online transaction to $5000 per transaction in savingsbond site. |
| Date Posted: Apr/23/2002 5:52 PM Posted By: RagingBull Rank: Ancient Member The CPI-U raised from 178.3 to 178.8. a mere .5 percent increease. double that and you get 1%. So if you buy bonds now you will get a 3% return in May – Sept. (2% fixed + 1% inflation) |
| Date Posted: Apr/24/2002 12:06 AM Posted By: cache Rank: Senior Member sunrise, they rised to $5K which is easier to us to type in all the info. However my CC would not authorize the second purchase (CC authorized, but told the ibond to call in). So it is causing problem for me now since I am not sure if I actually bought the ibond or not. Anyone know how to contact the ibond agent? |
| Date Posted: Apr/24/2002 10:36 AM Posted By: sunrise Rank: Senior Member Cache, I see a number 304-480-6112 on the savingsbond website. I have also bought the bond, but did not get the second confirmation even after 2 days , as they said they would. |
| Date Posted: Apr/24/2002 11:19 AM Posted By: cache Rank: Senior Member thanks for the number. This $5k limit is causing a lot of trouble now. The website generates error messages such as “try again” or “CC is not authorized”, in either case I think you would be charged. I called my CC, they said I have to wait for 48 hours to see how many of the $5K I actually bought. My problem is that I don’t know how much ibond I bought. |
| Date Posted: Apr/24/2002 2:35 PM Posted By: SUCKISSTAPLES Rank: FW Historian u likely DID NOT get charged if u didnt get a conf. # I had error messages pop up last year when buying several bonds, none resulted in a sale (although they did put the temp authorizations on the CC) |
| Date Posted: Apr/24/2002 11:02 PM Posted By: happypants Rank: Senior Member 2K I just bought 5 $1000 bonds in one transaction ($5K) and one $1000 in a second, both went through ok. Got the confirmation email about 1/2 hour later. |
| Date Posted: Apr/25/2002 2:02 AM Posted By: cache Rank: Senior Member Suckstaple, I got two first confirmation emails. However I got only one second confirmation emails. I also checked the CC, it was only one $5k charge. happypant, I never had problem with 5 $1k. Only this 2 $5K had problem. |
| Date Posted: Apr/25/2002 4:54 AM Posted By: RagingBull Rank: Ancient Member if i cash bonds in 8 months will i get 5 months interest or only 3 months |
| Date Posted: Apr/25/2002 6:42 AM Posted By: chenwilliam Rank: Member > 5 months of interest. You only get charge 3 month of penaulty if you own the i-bonds for less than 5 years. |
| Date Posted: Apr/25/2002 7:14 PM Posted By: RagingBull Rank: Ancient Member ok I used to think they only add interest to bonds every 6 months, but every month. |
| Date Posted: Apr/25/2002 7:18 PM Posted By: Cyberbishop Rank: Charter Member The CPI-U raised from 178.3 to 178.8. a mere .5 percent increease. double that and you get 1%. So if you buy bonds now you will get a 3% return in May – Sept. (2% fixed + 1% inflation) If we buy the bonds now (by Apr 29), shouldn’t we get the 4.40% for April thru Sept (the fix 6 months after purchase), then the ~3% for the next 6 months…? |
| Date Posted: Apr/25/2002 7:52 PM Posted By: chenwilliam Rank: Member > I think every 6 months they add the interest back to your principle. So you are compounded every six months instead of every month. Please correct me if I am worng abotu this. |
| Date Posted: Apr/25/2002 7:54 PM Posted By: Cyberbishop Rank: Charter Member From publicdebt The 4.40 percent earnings rate for I Bonds bought from November 2001 through April 2002 will apply for the first six months after their issue. If I buy ibonds today, shouldn’t I get 4.40% for Apr thru Sep 02, then the new rate posted on May 1st will apply to Oct thru Mar 03, and so on? Message edited by: Cyberbishop on 04/25/2002 19:55:27 |
| Date Posted: Apr/25/2002 10:54 PM Posted By: chenwilliam Rank: MemberCyberbishop, you are correct. I need to do mor eresearch before I reply > concerning the compounding, this is from the website: > |
| Date Posted: Apr/25/2002 11:08 PM Posted By: RagingBull Rank: Ancient Member The 4.40 percent earnings rate for I Bonds bought from November 2001 through April 2002 will apply for the first six months after their issue. If I buy ibonds today, shouldn’t I get 4.40% for Apr thru Sep 02, then the new rate posted on May 1st will apply to Oct thru Mar 03, and so on? DOn’t they mean the first issue? So what you are saying is if I buy bonds today with 4.4% interest I wil get it till sept? |
| Date Posted: Apr/25/2002 11:18 PM Posted By: Cyberbishop Rank: Charter Member Date of issue of the bond itself…Each calendar month is considered its own issue. See the footnotes in any one of these tables ** Each “Start Date” and “End Date” is for the first date of the range in the “Issue Dates” column. Add one month for each later issue month. For example, a bond issued in 7/1997 would be worth $62.12 on 1/1/2002 $64.12 on 7/1/2002. Message edited by: Cyberbishop on 04/25/2002 23:20:31 |
| Date Posted: Apr/26/2002 1:22 AM Posted By: trafael Rank: Tired Member 1) any guesses on what will the FIXED portion of the rate be? I bet it will be significantly lower… 2) Now I gotta vent about the nextcard asses! They constantly give me troubles! Firstly the put a hold on the click payment for freaking 7 days or so even though I always click pay these large amounts… The account is always locked for several days even AFTER they receive the payment from my bank. Secondly they now dont allow me to charge more than one credit limit per month even though i pay up the entire balance even before I charge the card (i.e. credit limit 7500$; I prepay this amount, then charge around this amount… then theoretically after the payment clears from the bank I should be able to charge more money on the card (the balance should be around 0 now), however they now flagged my account and told me several times not to go over one credit limit payment per month! which I cant understand. and all this happens while they put innumerable holds on the account without bothering to even let me know about it. Nextcard sucks but I guess I have to put up with their crap for the 2% amazon giftcards. Anyone else experiencing similar problems with nextcrap? |
| Date Posted: Apr/26/2002 12:31 PM Posted By: SimpsonHomerJ Rank: Senior Member TRAFAEL. Welcome to the club! |
| Date Posted: Apr/26/2002 5:40 PM Posted By: NOTaFool Rank: Member. Message edited by: NOTaFool on 08/23/2002 17:18:12 |
| Date Posted: Apr/26/2002 9:53 PM Posted By: happypants Rank: Senior Member 2K Nextcard is refusing credit limit increases. Doesn’t surprise me considering they lost tons issuing cards aggresively. |
| Date Posted: Apr/28/2002 9:22 AM Posted By: Mizzles Rank: New Member Sorry guys, newbie around here, just read through a ton of messages regarding these bonds. Pardon the ignorance, but I had one basic question: What is the advantage of buying these bonds towards the end of the month? Is it so that they can be cashed out before 6 months of “real time?” Thanks |
| Date Posted: Apr/28/2002 9:56 AM Posted By: DaveHanson Rank: Senior Member 6K Welcome Mizzles Main advantages are (1) with rates likely to fall, you lock in the old higher rates at end of April or October, just before rates change; and (2) you can redeem them in 5 months and a couple days, rather than a full six months (they can be redeemed in the sixth month after purchase. you have through tomorrow midnight eastern to buy April bonds. Cheers, Dave |
| Date Posted: May/01/2002 11:24 AM Posted By: alex7 Rank: Member The new rate as of May 1 is now shown at 2.57% — same 2% base but only 0.28% inflation rate. |
| Date Posted: May/01/2002 11:41 AM Posted By: sunrise Rank: Senior Member Now that HH bonds are paying 4% APR, what are the pros and cons of buying HH bonds and following the same strategy. I did not see any 3 month penalty when you redeem the bonds. Looks better to me, unless I missed something |
| Date Posted: May/01/2002 11:44 AM Posted By: DeGlass Rank: Senior Member 4K You cant buy HH bonds for cash. You can get them only in exchange for Series EE/E bonds and savings notes or upon reinvestment of the proceeds of matured Series H bonds. Wouldn’t you lose the 3-month interest for selling the EE bonds? |
| Date Posted: May/01/2002 11:51 AM Posted By: sunrise Rank: Senior Member Thanks DeGlass So, can we buy EE bonds and follow the same strategy ? |
| Date Posted: Jun/19/2002 9:59 AM Posted By: Coop1979 Rank: Senior Member 2K Is there an updated strategy someone can help me on for this deal? I don’t know much about finance, and would like some advice before I dive into this. Coop |
| Date Posted: Jul/19/2002 3:32 PM Posted By: crzyc Rank: Senior Member yea what do you guys think is the best option now |
| Date Posted: Oct/08/2002 9:19 PM Posted By: RealJustice Rank: Member Okay, here’s what I’ve done: Using the Fleet Titanium Visa: I got 6 months no interest on purchases (but of course, have to make a “minimum” payment each month, and have to pay off in full before the 6th billing period to be sure to avoid interest.) So, I bought $10,000 worth of EE bonds (face value $20,000). So now I’ll earn 3.96% interest per anum on the bonds, but I’ll lose the last 3 months interest if I redeem the bonds before 5 years, but that’s okay. But best of all, I got 12,000 Fleet points for this $10,000 purchase. With 10,000 points, I got a $100 Home Depot gift card. I still have another 2000 points to put toward other things, such as a Sears gift card, etc. Each 100 points is clearly worth $1.00. So I’ll be getting $120 worth of rebates that are almost equivalent to cash, plus the interest on the bond for 3 months, so the total value over a 6 month period is a bit over $200 for an investment of essentially nothing. All I need to do is to be sure to make the $200 / month payment on time, (which can be done as a direct debit on the Fleet web site) and to pay off the Fleet card by the end of the 5th month. This does require $9000 cash to cover the one month period between the time the Fleet card has to be paid off and the bond can be cashed. So, it looks to me that I’ll earn about $200 of cash and cash equivalents for very little effort. Message edited by: RealJustice on 10/08/2002 21:26:40 |
| Date Posted: Dec/07/2002 11:56 AM Posted By: N0Pers0nality Rank: Senior Member Does anyone have a updated strategy? Are people even investing in bonds right now? Just curious on everyone’s input |
| Date Posted: Dec/07/2002 11:57 AM Posted By: DrZoidberg Rank: Senior Member 1K I was finally able to cash-in a 50.00 EE bond i got for signing up for a trial membership back in June. I earned .24 interest. YAH! |
| Date Posted: Dec/08/2002 12:38 AM Posted By: mblitch Rank: Thrifty Member RealJustice said: |
| Date Posted: Dec/08/2002 1:02 AM Posted By: DrZoidberg Rank: Senior Member 1K mblitch said: |
| Date Posted: Dec/08/2002 1:42 AM Posted By: mblitch Rank: Thrifty Member DrZoidberg said: > I meant put the money, otherwise spent on immediately paying off the credit card, into a fairly liquid CD that will hopefully earn just slightly more than a checking or savings account. |
| Date Posted: Dec/11/2002 3:50 PM Posted By: pimpcheese Rank: Broke Member I have a newbie question: If I buy the $1000 bonds today and sell it 6 months later, am I guarantee I can sell it at $1000 (putting interest earn aside)? or it depends on the value of the bond at the time sold? My understanding is that the bond value maybe lower than the day of purchase when I sell it. So there is a risk involved in selling-in-6-months-and-get-skymiles, right? If I purchase $30,000 today, I may get a LOT less than $30,000 back 6 months from now. Anyone like to comment on that? |
| Date Posted: Dec/11/2002 4:08 PM Posted By: Alcibiades Rank: Senior Member 10K You pay $500 for $1000 of face value in EE bonds. They never decline from this $500 value. You are guaranteed(unless a nuclear war destroys the US govt or if the US goes belly up, and you probably would have other more pressing worries if either occurred) to get at least your $500 back, plus a little interest – some interest(if you redeem before 5 years) Message edited by: Alcibiades on 01/15/2003 11:59:55 |
| Date Posted: Dec/11/2002 4:12 PM Posted By: RealJustice Rank: Member With US Savings Bonds, you’ll always get back at least the principal that you paid. In other words, if you purchase a $5000 EE bond for $2500 (remember, EE always costs half its face value), then you will definitely get back $2500 plus interest whenever you cash the bond. In contrast, the value of T-bills, corporate bonds, and similar obligations varies depending upon interest rates and perceived risk. |
| Date Posted: Dec/11/2002 5:09 PM Posted By: muckus Rank: Member Might mention that U.S. Savings Bonds cannot be sold at all. They are not negotiable, cannot be used as collateral, etc. You simply Redeem them with the issuer (U.S.Treasury) and yes, you’ll get your principal back plus after 6 months not before. You can borrow money against your car or the timber in your woodlot but $100k of Savings Bonds in your drawer won’t get you a loan. Message edited by: muckus on 12/11/2002 17:13:52 |
| Date Posted: Dec/12/2002 10:41 AM Posted By: bluefossil Rank: Senior Member RealJustice said: > if you wait until it matures 15-20 years later. if you don’t wait until it matures and sell it earlier (i.e. in 3-6 months), the value is not guaranteed. So you may not be getting the full $2500 back if sold before it matures. Am I wrong? |
| Date Posted: Dec/12/2002 11:27 AM Posted By: tooshy Rank: Frivolous Member I agree with Bluefossil that EE will pay the guaranteed rate only if you hold it until full maturity. Right now it is at 17 years. The government will bring it up to face value in the final year, so if you cash it prematurely, you will earn only the current yield, adjusted every 6 months. Anyone? |
| Date Posted: Dec/12/2002 12:19 PM Posted By: myf16 Rank: Senior Member 1K bluefossil said: if you wait until it matures 15-20 years later. if you don’t wait until it matures and sell it earlier (i.e. in 3-6 months), the value is not guaranteed. So you may not be getting the full $2500 back if sold before it matures. Am I wrong? >> Yes. The interest rate is not guaranteed, but you always get your full principal back plus interest, minus 3 months of interest if cashed earlier than 5 years. |
| Date Posted: Dec/12/2002 12:34 PM Posted By: bluefossil Rank: Senior Member myf16 said: > are you sure? anyone can second to that? I thought it works this way: you purchase a $5000 EE bond for $2500 today. 6 months later, you decide to cash out. The $5000 EE bond value maybe lower than the day of purchase; let’s say, the value is only $4000 in 6 months. so when you cash out, you only get $2000 back plus interest earned. true or false? Message edited by: bluefossil on 12/12/2002 12:48:55 |
| Date Posted: Dec/12/2002 2:20 PM Posted By: muckus Rank: Member The Treasury makes EE Bond confusing with a silly Face Value. EE Savings Bonds are purchased at 1/2 face value. They are garranteed to obtain face value in 17 years or less. If the variable rates don’t produce enough earnings the Treasury makes up the difference in the 17th year(this is called Maturity). However, you can redeem them anytime after 6 months. You will be paid your full investment (1/2 face value)+ earnings. A 3 month penalty applies to these earning(only earnings) if the bond is held between 6 mo. and 5 years; after that no penalty. After 30 years Treasury will pay no more interest. This is called Final Maturity. And taxes on earnings if they’ve been defered (most of the time they are) come due automaticaly (by law) at this time. Again, because Savings Bonds aren’t negotiable (you can’t trade or sell them on a market) they can’t lose principal value (fall below Par) like other types of Bonds. Message edited by: muckus on 12/12/2002 14:25:00 |
| Date Posted: Dec/12/2002 2:30 PM Posted By: muckus Rank: Member By the way, You can learn lots about Savings Bonds at the Vanguard Dihards discussion board at morningstar.com Mel is the top expert there! Among others. I highly recommend Vanguard Diehard site; in fact I think it’s best place for Finance education. |
| Date Posted: Dec/12/2002 10:08 PM Posted By: WalStMonkey Rank: Senior Member 1K mshen, when you’re right, you’re right. ——————————————— why yes, I am psychic. Message edited by: WalStMonkey on 12/12/2002 22:12:28 |
| Date Posted: Dec/12/2002 10:09 PM Posted By: FWFFan Rank: Tired Member why are we spoon feeding these people? the answers are not only on the website but also discussed multiple times in the threads. the more people respond positively the more ‘crap thread’ we will be getting. |
| Date Posted: Dec/12/2002 10:15 PM Posted By: DrZoidberg Rank: Senior Member 1K i think you’re thinking about T-notes and T-bills that can lose value. |
| Date Posted: Jan/07/2003 5:13 PM Posted By: GoodDeal2003 Rank: Senior Member 1K Neewbie Help Please : Do you think Jan end is the right time to buy I-Bonds ?I am concerned ‘coz it can be sold back in May when the new Composite Rate will come into picture! |
| Date Posted: Jan/07/2003 7:53 PM Posted By: chenwilliam Rank: Member |
| Date Posted: Jan/07/2003 7:59 PM Posted By: Alcibiades Rank: Senior Member 10Kchenwilliam said: > If timed properly, isnt it 4 months and 5 days approximately ? Message edited by: Alcibiades on 01/07/2003 20:02:37 |
| Date Posted: Jan/07/2003 11:33 PM Posted By: chenwilliam Rank: Member Alcibiades > You are probably correct, but how do you get 4 months + 5 days out of the equation? Even if you buy the bond on 28th of Jan (let’s assume that’s the lat day), you can’t take it out until July 1st. That’s my understand of how they do it, a partial month count as a month and you need to hold on for six months. That is 5 months and ~ 5 days. That’s how I do my bonds. Unless you have credit cards in the equation, then you are definitely right. Message edited by: chenwilliam on 01/07/2003 23:33:51 |
| Date Posted: Jan/07/2003 11:42 PM Posted By: DaveHanson Rank: Senior Member 6K answers to these questions and more are in this FW FAQ |
| Date Posted: Jan/08/2003 12:50 AM Posted By: Violator Rank: Senior Member is there any penalty for keeping them for only 6 months? |
| Date Posted: Jan/08/2003 3:52 AM Posted By: Violator Rank: Senior Member never mind. i just found the part about 3 months penalty for keeping them for under 5 years. |
| Date Posted: Jan/15/2003 10:56 AM Posted By: klipdrift Rank: Ancient Member The Treasury Department announced today that the minimum holding period that applies to United States Savings Bonds will be extended from six to twelve months, effective with issues dated on and after February 1, 2003. The minimum holding period is the length of time from issue date that a bond must be held before it is eligible for redemption. Both Series EE and I bonds are affected. Series EE and I Savings Bonds bearing issue dates prior to February 2003 retain the six-month minimum holding period in effect when they were issued. Individual investors who are saving for the longer term will not be affected by the lengthened holding period. The new holding period will prevent purchasers from taking advantage of the current spread between savings bond returns and historically low short-term interest rates by cashing in bonds after six months. Savings Bonds are designed to be a long-term savings vehicle. All other terms and conditions that apply to Series EE and I bonds remain unchanged. Both series are accrual securities, earning interest and growing in value as they are held, up to a maximum interest-bearing life of 30 years. EE bonds earn market-based interest rates at 90 percent of an average of five-year yields of marketable Treasury securities. I bonds earn a composite rate (a combination of a fixed rate set at purchase for the life of the bond, and an inflation rate that is adjusted semiannually based on the consumer price index for urban consumers). Interest on both series accrues monthly and compounds semiannually. Bonds held less than five years are subject to a three-month interest penalty. More information about United States Savings Bonds can be found on the website http://www.savingsbonds.gov. |
| Date Posted: Jan/15/2003 10:59 AM Posted By: FWFFan Rank: Tired Member doh! that will adversely affect our strategy making it defunct |
| Date Posted: Jan/15/2003 11:46 AM Posted By: DrZoidberg Rank: Senior Member 1K that sucks better buy as much as you can this month |
| Date Posted: Jan/15/2003 3:15 PM Posted By: FWFFan Rank: Tired Member too lazy to do analysis… does someone want to do it? |
| Date Posted: Jan/15/2003 7:37 PM Posted By: jbrotheim Rank: Member Any word on what happens if you cash out before 12 months? Do you lose all the interest or just 6 months worth?/ |
| Date Posted: Jan/15/2003 7:40 PM Posted By: FWFFan Rank: Tired Member you should *REREAD* again what the new policy is before asking. its been answered in the original new post. i have been patiently holding back becaues i agree that ‘newbies’ shouldnt be attacked on sight, even if they are too lazy to search – but sometimes the questions are just inappropriate Message edited by: mshen11 on 01/15/2003 19:43:57 |
| Date Posted: Jan/15/2003 7:50 PM Posted By: jbrotheim Rank: Member I don’t see anywhere that describes the new policy. Now if you cashout at 6 months, you get 3 months interest… So what happens if you cashout at 12 months…. Thanks for the searching tips |
| Date Posted: Jan/15/2003 7:53 PM Posted By: FWFFan Rank: Tired Member here is your answer: [apologies for the repost] <<The Treasury Department announced today that the minimum holding period that applies to United States Savings Bonds will be extended from six to twelve months, effective with issues dated on and after February 1, 2003. The minimum holding period is the length of time from issue date that a bond must be held before it is eligible for redemption. Both Series EE and I bonds are affected. Series EE and I Savings Bonds bearing issue dates prior to February 2003 retain the six-month minimum holding period in effect when they were issued. Individual investors who are saving for the longer term will not be affected by the lengthened holding period. The new holding period will prevent purchasers from taking advantage of the current spread between savings bond returns and historically low short-term interest rates by cashing in bonds after six months. Savings Bonds are designed to be a long-term savings vehicle. All other terms and conditions that apply to Series EE and I bonds remain unchanged. Both series are accrual securities, earning interest and growing in value as they are held, up to a maximum interest-bearing life of 30 years. EE bonds earn market-based interest rates at 90 percent of an average of five-year yields of marketable Treasury securities. I bonds earn a composite rate (a combination of a fixed rate set at purchase for the life of the bond, and an inflation rate that is adjusted semiannually based on the consumer price index for urban consumers). Interest on both series accrues monthly and compounds semiannually. Bonds held less than five years are subject to a three-month interest penalty. More information about United States Savings Bonds can be found on the website http://www.savingsbonds.gov. >> |
| Date Posted: Jan/15/2003 7:58 PM Posted By: DaveHanson Rank: Senior Member 6K jbrotheim, you get 9 months interest after a 12-month hold period (12 minus 3 month penalty.) |
| Date Posted: Jan/15/2003 7:59 PM Posted By: jbrotheim Rank: Member So, what happens if you try and cash the new bonds after say 9 months.. Do you just get your original $$$ back with no interest or do you still score 6 months interest? |
| Date Posted: Jan/15/2003 8:07 PM Posted By: Alcibiades Rank: Senior Member 10K 3 months penalty no matter when you cash them in. You are prohibited from cashing in before 6 months(12 months as of 02/01) |
| Date Posted: Jan/15/2003 8:13 PM Posted By: jbrotheim Rank: Member I apologize for my confusion.. So let’s say you buy a $1000 bond on Feb 1… On April 1, you realize you need the cash, so you go to the bank to cash it.. Do they turn you away, give you your $1000 or apply a penalty and give you like $980 |
| Date Posted: Jan/15/2003 8:16 PM Posted By: DrZoidberg Rank: Senior Member 1K they turn you away. The ony time you can cash before 5 year without penalty is if you are in a disaster area but you still have to meet minimum holding time. |
| Date Posted: Jan/16/2003 2:11 AM Posted By: SUCKISSTAPLES Rank: FW Historian yeah they are even more restrictive than a bank CD, as the bank WILL let you get your money out (with a penalty)..with bonds, you are NOT SEEING YOUR MONEY AGAIN FOR 1 year. PERIOD. this is just the progression of the demise of “bond flipping” as I predicted since we first began discussing it… some CC’s (advanta business cash rebate card being one ) are also now starting to treat bond purchases as cash advances, regardless of what the bond website states… |
| Date Posted: Jan/16/2003 10:47 AM Posted By: flatwell Rank: Ancient Member San Francisco Chronicle’s Kathleen Pender reports on the demise of the 6-month bond flipping in today’s paper. Screws tightened on savings bonds http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/01/16/BU59501.DTL&type=business – Flatwell |
| Date Posted: Jan/16/2003 2:40 PM Posted By: KingAdRock Rank: Addicted Member Got my last orders in on my Citi Visa, but I’m hesitating to use my AMEX. Has anyone used AMEX Blue for bond purchases before? Are they treated as purchases or cash advances? KAR |
| Date Posted: Jan/16/2003 3:33 PM Posted By: FatMember Rank: Senior Member SUCKISSTAPLES said: |
| Date Posted: Jan/16/2003 7:14 PM Posted By: SUCKISSTAPLES Rank: FW Historian i applied for the advanta business cashback card primarily for the cashback program, and the terms and conditions received with the card specifically state savings bond purchases will be treated as cash advances….this may be for new accounts and old accountholders should check with advanta… most other CCs (such as AMEX) still treat bonds as purchases, but you can bet this will start changing if more people buy bonds online to get rewards |
| Date Posted: Jan/16/2003 9:45 PM Posted By: ishita Rank: Member Hi, I just called AMEX and they said they treay any investment including bonds as cash advance. Has anyone recently purchased these bonds through any CC; please let me know which one works! |
| Date Posted: Jan/16/2003 10:01 PM Posted By: DickOtter Rank: Happy Member ishita said: > Are you sure you phrased your question to AMEX properly? Sounds contrary to many users’ experience. |
| Date Posted: Jan/16/2003 10:07 PM Posted By: KingAdRock Rank: Addicted Member I charged some after all today. I’ll post my results in about 2 days when I can look at the transaction online. KAR |
| Date Posted: Jan/17/2003 11:33 AM Posted By: tooshy Rank: Frivolous Member This is slightly offtopic but after reading Flatwell’s linked article I find it terribly prejudiced that a Republican congressman is seeking to end the Savings Bonds Program as we know it . . . because it is cost ineffient when compared to other goverment securities, which are sold mostly to large institutional investors. So he is favoring the big guy over the little guy. Somethings in life are not cost efficient but necessary to provide equal opportunities for everyone especially the little guy. What do you think of his upcoming bill to Congress? See excerpt from Flatwell’s article below: Meanwhile, the House has approved an appropriations bill that would wipe out the program’s entire marketing budget, hoping to discourage sales of new savings bonds. Its rationale: The savings bond program finances just 3 percent of the national debt, but consumes more than 70 percent of the Bureau of the Public Debt’s workforce and funding. Marketable securities — including Treasury bills, bonds, and notes — account for the rest of the nation’s debt and the bureau’s budget. These are sold in electronic form only, mainly to institutional investors who buy huge amounts at a time. As a result, marketable securities are a much more cost- effective way to raise money than savings bonds, which are sold in paper form in small denominations. “I don’t think you should be using taxpayers’ money to advertise, promote and market something that is the most expensive way for the Treasury Department to borrow,” says Rep. Ernest Istook Jr., chairman of the House Appropriations Subcommittee for Treasury, Postal Service and General Government. Istook, R-Okla., who authored the bill, won’t say whether he wants the savings bond program shut down entirely. “That is not a yes or no question,” he says. However, in a letter to Bill Pogue, president of the national Treasury Employees Union, he wrote, “I am sure that we want to maintain the capability to issue savings bonds for future contingencies, but that doesn’t necessarily mean that we want to continue the extra-high expense in the meantime.” To save money, the bureau has proposed closing 37 of 41 savings bond field offices, focusing on Internet sales and eventually replacing paper bonds with an all-electronic system of ownership. Istook wants to divert the $22.4 million from savings bond marketing into homeland security. That’s ironic, considering that the savings bond program was started in 1941 to help finance World War II. At the end of the war, they accounted for about one-fourth of the public debt. |
| Date Posted: Jan/17/2003 2:56 PM Posted By: btwhale Rank: New Member does anyone know how the purchase limits are enforced? What are the consequences of purchasing $40K I bonds, for example? Does anyone know any good tricks for getting more exposure than the limits explicitly state? |
| Date Posted: Jan/17/2003 6:01 PM Posted By: Justalil Rank: Senior Member toosh Who needs a marketing budget when you have FW, FF, FT, TMF, MSN, WSJ and who knows how many other sites/pubs posting/advertising for free? Not to mention word of mouth. Taking that marketing money should be a no brainer and will probably have little effect on SB popularity. I’d sure like to see the electronic accounting system instead of paper SBs. mshen > LOL – Keep It Simple S… is easiest I guess. For married couple buy one 5k I-Bond and one 5k EE-Bond($2500) each month (total $7500/month – $90k/yr). At end of year recycle and continue purchases. This does require maintaining at least $82.5k in non-liquid funds. No problem – right! |
| Date Posted: Jan/17/2003 6:53 PM Posted By: sric Rank: New Member I made a purchase in December using American Express® Platinum Cash Rebate card and is treated as regular purchase with cash back. NOT as cash Advance. I alrealy paid that statement Hope, that helps. |
| Date Posted: Jan/17/2003 7:15 PM Posted By: FWFFan Rank: Tired Member <<<< too lazy to do analysis >> LOL – Keep It Simple S… is easiest I guess. For married couple buy one 5k I-Bond and one 5k EE-Bond($2500) each month (total $7500/month – $90k/yr). At end of year recycle and continue purchases. This does require maintaining at least $82.5k in non-liquid funds. No problem – right! >> acutally i was talking about analysis of whether its worth it for to buy these suckers. now im too lazy to post anyhow i did back of paper calculation. we were getting like 6% annualized return, its been knocked down to ~4%. compared to my savings of 3.3%… albiet state tax-free. is it worth it? you decide, but for me it doesnt seem so. |
| Date Posted: Jan/17/2003 7:35 PM Posted By: CalDude Rank: Happy Member mshen11 said: > Tax Free is the key word. Assuming 28% marginal tax bracket, 3.3% after tax only gives you about 2.3%. |
| Date Posted: Jan/17/2003 7:39 PM Posted By: RallyCap Rank: Senior Member CalDude said: > Actually, “State” is the key word. Savings bonds are exempt from state and local income taxes, not federal taxes. That is what mshen was saying. Message edited by: RallyCap on 01/17/2003 19:40:31 |
| Date Posted: Jan/17/2003 7:51 PM Posted By: Justalil Rank: Senior Member mshen Yield is going to be a bit tricky now. The interest rate when you purchase is good for 6 months and then an unknown future interest rate kicks in for the last six months (3 of those penalty). Of course, YMMV on the value of any rewards earned from purchase. GM card 5% if you buy their products, AMEX ~2% cash, Gas Card ??, Airmiles ???, Hotel points ???, Amtrak ??? Not to mention combining these with 0% BTs and earning $$$ on OPM. Or tax advantages. Message edited by: Justalil on 01/17/2003 20:02:23 |
| Date Posted: Jan/17/2003 8:24 PM Posted By: FWFFan Rank: Tired Member justalil: correct. i assumed i make one set of purchase only, not three like the 6month strategy. i also assume rates dont change. other consider is the usage of a 1% card. even if it was a 1.5% amex, yeild is no more than 4.5% Message edited by: mshen11 on 01/17/2003 20:26:49 |
| Date Posted: Jan/17/2003 9:34 PM Posted By: Justalil Rank: Senior Member mshen Will definitely be a challenge putting together special CC offers to improve on the 4.5%. Will be interesting to see what rates go to next. Maybe the low interest rates will push $$$ back into stocks. My portfolio could use a jolt or two. A silver lining?? |
| Date Posted: Jan/18/2003 12:41 PM Posted By: KingAdRock Rank: Addicted Member KingAdRock said: |
| Date Posted: Jan/18/2003 5:53 PM Posted By: FWFFan Rank: Tired Member the question is… is it worth it anymore? for flippers that is. since the demise of FBB, i consider myself a flipper. after some analyzing, i dont think ill be doing it. the advantage of ~4%+ is marginal considering the new 12month period (i would still do it if it was only for 6months) question is… whats going to be my short term investment strategy now (meaning 6month ish). |
| Date Posted: Jan/18/2003 8:35 PM Posted By: TDWonderBoy Rank: Addicted Member Here’s a big question…anyone who can help please do. What is the last day that I can make a bond purchase for a January issue date? I’ve made purchases before and the “issue date” is always later than the purchase date. |
| Date Posted: Jan/19/2003 7:07 AM Posted By: zender Rank: Senior Member 2K TDWonderBoy said: > I see that you already got one response to this question on the other bond thread that you posted it on. I’ll only add that past experience indicates that there should be a notice on the website by about the 25th advising exactly what date will be the cut-off for Jan. issue dates. |
| Date Posted: Jan/19/2003 1:00 PM Posted By: Justalil Rank: Senior Member > mshen I think that question is the primary reason they are making the change. I know of nothing without a good deal of risk available which would provide near the returns you were getting on SBs. Even getting ~4.5% isn’t going to be easy without some serious risk taking. If you invest in SBs after this month, the risk will be that you need the money before the 12 month minimum holding period ends. Then you may have to borrow at a higher rate to tide you over until your SB is ripe. I wonder if those buying through payroll savings plan will get notice of the change. I can see a rude awakening for some folks this summer/fall. |
| Date Posted: Jan/20/2003 1:47 AM Posted By: tooshy Rank: Frivolous Member Justalil said: <<toosh Who needs a marketing budget when you have FW, FF, FT, TMF, MSN, WSJ and who knows how many other sites/pubs posting/advertising for free? Not to mention word of mouth. Taking that marketing money should be a no brainer and will probably have little effect on SB popularity. I’d sure like to see the electronic accounting system instead of paper SBs.>> I wasn’t implying the loss of marketing money as the only loss we can expect. I think we may lose the whole SB program, if Congress had their way about it. They’re targeting payroll SB as the problem, but like DaveHanson said cc bond flipping may be even a greater problem <thanks to forums like FW, FF,FT, TMF, MSN, WSJ.> Don’t be surprised if the SB program is modified where cc purchasing of electronic bonds will be treated as cash advances. Gone will be our purchase rewards. Message edited by: tooshy on 01/20/2003 01:49:57 |
| Date Posted: Jan/20/2003 9:19 AM Posted By: WalStMonkey Rank: Senior Member 1K “Don’t be surprised if the SB program is modified where cc purchasing of electronic bonds will be treated as cash advances. Gone will be our purchase rewards.“ One can’t reasonably expect a market inefficiency to last forever. Treasure the memory, and quit trying to make it a ‘litle guy’ vs ‘big guy’ thing. As a taxpayer, I want the government to borrow money at the lowest cost, not to redistribute wealth. OK, I must say it’s more pleasant when it’s being redistributed in my direction, but it’s still not what government should be doing. Yes, the rich have more options than the poor. That’s the way of the world. |
| Date Posted: Jan/20/2003 12:00 PM Posted By: RallyCap Rank: Senior Member WalStMonkey said: |
| Date Posted: Jan/20/2003 2:00 PM Posted By: tooshy Rank: Frivolous Member This is why I like forums. I like another point of view to whatever thoughts I have. . . . sounds logical that the government should find the most efficient source of funds. Of course dealing with big money flow is the most efficient. They needed small money flow to fund the other world war, but I guess times have changed and they don’t need our money now. You’re right I guess that if the government can find more efficient source of funds, better for all of us. I guess the struggle for the “little guy” to get ahead will be one small notch more difficult if we lose our cash reward perk. The rich have the power of money to get ahead faster. Such is life I guess. Whether you dislike the little guy/big guy terminology, I see the size of personal economics as a definite variable in the accumulation of wealth. Yet we all live on this earth having similar basic needs. The question is is that fair? Message edited by: tooshy on 01/20/2003 14:04:32 |
| Date Posted: Jan/20/2003 2:52 PM Posted By: FatMallet Rank: Member tooshy said: > I try not to be too harsh on this question. You are arguing the constitution of the United States. We (U.S. citizens) are born with equal opportunities, rather than equal wealth. I consider it fair because there is nothing prohibiting someone from getting education and knowledge – a sure way to obtain wealth. The last time I check, all countries which attempt to distribute equal wealth to every citizen are ultra monstrous scams… The idea of equal wealth will never work in practice until all necessary works on Earth are taken over by automated computers and robots which requires zero maintenance and capable of fixing all problem by themselves. I have to assume you are the biggest fan of the movie “A.I.” |
| Date Posted: Jan/20/2003 8:32 PM Posted By: tooshy Rank: Frivolous Member Well, knowing the government doesn’t care to sell Savings Bonds, we should all save the government money by not buying anymore savings bonds and forgo earning our cash rewards. I thought it was a win-win situation til now like the old Uncle Sam advertisements were saying. I don’t expect to be equal to others, it’s life that someone is richer or poorer than me. But somehow it just doesn’t seem fair that the power of money has a momentum all its own. If we cut out inheritance taxes on the rich, it will only get worse. There is something sinister when the rich gets richer and the division between rich and poor widens. Don’t say it is our human right because I don’t think it is for a moment. Cutting out the savings bonds program which many have relied on as a savings tools definitely is no grief to the rich. It hurts only the working class. |
| Date Posted: Jan/21/2003 2:42 PM Posted By: bipjobb Rank: New Member can anyone confirm if Discover Platinum charges this as a cash advance or a purchase? |
| Date Posted: Jan/22/2003 12:42 AM Posted By: freebee Rank: Senior Member bipjobb said: |
| Date Posted: Jan/23/2003 12:04 PM Posted By: sande833 Rank: Member bipjobb said: > Like all Savings Bond purchases on a credit card, it’s billed as a purchase on Discover Platinum. (This is the card I use when I’ve purchased Savings Bonds.) |
| Date Posted: Jan/25/2003 12:29 PM Posted By: tooshy Rank: Frivolous Member Justalil said: << I’d sure like to see the electronic accounting system instead of paper SBs. >> Electronic bonds however will not accept credit cards. See reply from treasurydirect.gov: Hi No, you cannot use a credit card to purchase paperless savings bonds. If you will again visit web site: http://www.treasurydirect.gov/ click on Treasury Direct and when the next page comes up click on “Open an Account” and “Learn More”. This should enlighten you all about treasury direct. Savbonds |
| Date Posted: Jan/25/2003 1:14 PM Posted By: Justalil Rank: Senior Member Toosh Thanks for info. I realized this, but still would like to use CC and electronic accounting, if it were possible. BTW::: LAST DAY FOR PURCHASE OF 6 MONTH REDEEMABLE SAVINGS BONDS WITH CC IS 30 JAN 03. Corrected to 30 Jan 03 Message edited by: Justalil on 01/27/2003 16:39:32 |
| Date Posted: Jan/25/2003 11:56 PM Posted By: DickOtter Rank: Happy Member I apologize if this is a naive question, but I don’t believe it’s been covered in this forum. How much of a hassle is it to redeem Savings Bonds? 1) Can it be done with a teller or do you need to see a manager/officer? 2) Are they competent in determining the value of the bonds or do you need to come in with a printout from a Savings Bond Calculator to double-check their calculation or argue with them? 3) How long does the transaction take? A lot of paperwork? ID checks? 4) Can one just deposit the proceeds into their checking/savings account? Are the funds immediately available since you had the alternative of taking cash? Again, I apologize for the naivety of these questions. Thanks to all willing to share their experiences. Message edited by: DickOtter on 01/25/2003 23:58:04 |
| Date Posted: Jan/26/2003 12:26 AM Posted By: FWFFan Rank: Tired Member 1) Can it be done with a teller or do you need to see a manager/officer? fill out paper work and submit it to either. 2) Are they competent in determining the value of the bonds or do you need to come in with a printout from a Savings Bond Calculator to double-check their calculation or argue with them? they have to go through the government, so it is accurate 3) How long does the transaction take? A lot of paperwork? ID checks? no more than a few business days to instantaneous. YMMV 4) Can one just deposit the proceeds into their checking/savings account? Are the funds immediately available since you had the alternative of taking cash? yes at least for me. YMMV my experience is w/ bofa and bofi |
| Date Posted: Jan/26/2003 11:57 AM Posted By: FWFFan Rank: Tired Member ok, so now bonds are only redeemable by 12 months, our rate of return has dropped again. what other short term (6month) high interest rate vehicles are out there – it has to be greater than 3.5% (cnbt) |
| Date Posted: Jan/27/2003 10:02 AM Posted By: zender Rank: Senior Member 2K Justalil said: > According to the Savings Bond Online website this morning at this url: https://wwws.publicdebt.treas.gov/SD/SBDHome?PROC=SBDHome&button.x=89&button.y=12 the last date for January issue date purchases is 1/30/03. |
| Date Posted: Jan/27/2003 10:06 AM Posted By: RealJustice Rank: Member No one else needs to try to order any bonds this month. I just bought up the remaining supply of bonds for January. |
| Date Posted: Jan/27/2003 12:29 PM Posted By: FWFFan Rank: Tired Member no, i think SIS did. |
| Date Posted: Jan/27/2003 1:25 PM Posted By: spanky42 Rank: Broke Member pardon my ignorance, but after searching through this awesome thread, I couldn’t find the answer to this question: If I can only buy $5k of bonds per transcation through the internet, can I do multiple transactions? Or can I buy bonds at a bank using a Credit Card (probably not??)? Thanks to everyone for maintaining this great thread! It is very interesting to see people’s views on what constitutes a good return on your money… |
| Date Posted: Jan/27/2003 1:33 PM Posted By: RealJustice Rank: Member You can purchase up to $5000 of bonds in one order. However, there is no limit to the number of orders that you can place. If you are going to place large orders, you might give your credit card company a call either immediately before or immediately after placing the order(s) to advise them that your purchase is legitimate. Sometimes large purchases of savings bonds cause a fraud protection alert, which prevents the purchase from being completed until the credit card company rep talks to the card holder. (I speak from experience.) |
| Date Posted: Jan/27/2003 1:40 PM Posted By: CalDude Rank: Happy Member What would be the effect on my credit score if I max out my credit cards? And how long will this bad effect last? I only have 10K credit limit and I want max it out to buy savings bond by the end of the month. Thanks for any advice. |
| Date Posted: Jan/27/2003 2:34 PM Posted By: Justalil Rank: Senior Member Zender You’re correct they added a day. Last day is now 30 Jan. When I posted it definitely said 29 Jan. Extra time to melt some plastic. Just how much are folks planning on getting??? Hopefully, we can use up all their paper stock so they can go electronic.. Caldude While their might be a slight temporary drop in credit score for a maxed CL, once it is paid off, or at least reduced by half, score should quickly recover. Message edited by: Justalil on 01/27/2003 16:26:56 |
| Date Posted: Jan/27/2003 4:50 PM Posted By: Turbo55 Rank: Happy Member I only have a max of $3000 Credit limit on my credit card. Can I split a $5K transcation among two credit cards? I highly doubt that myself, so I guess that means I’ll have to buy 5 pieces of $1K savings bonds. What is the bad side of getting 5 pieces of 1K bonds? Does it make cashing them harder? |
| Date Posted: Jan/27/2003 5:04 PM Posted By: CalDude Rank: Happy Member Justalil said: |
| Date Posted: Jan/27/2003 5:34 PM Posted By: Justalil Rank: Senior Member turbo “Bad side” 5 pieces of paper to maintain and sign instead of one. Cashing won’t be any harder and if you don’t need the whole amount you can redeem 1,2,3,4, or 5. This could be an advantage. To me it’s about the same as having a hundred dollar bill or 5 twenties. Which is better? Depends on preference and plans. Caldude If your CL is 10k, report can’t show 20k balance on card. |
| Date Posted: Jan/27/2003 10:27 PM Posted By: mrbungle Rank: Senior Member RealJustice said: > Good advice. Seems this happened to me last week after I bought my bonds, but not on the bond purchase itself. It was several small purchases later, I was held up at the checkout counter as the cashier had to call for approval and verify my identity. I think I’ll call them up and ask what the deal was, and tell them about my next purchase |
| Date Posted: Jan/28/2003 11:28 AM Posted By: trafael Rank: Tired Member 2 questions at least one of which i saw went unanswered in the past… 1) can you buy more than 30.000 / year but sell the surplus before the year’s end? I guess this is only good for bonds bought in January this year… 2) what happens if you go over the 30,000 limit? I actually by mistake went over by 1000 the year before and nothgin happened. although I also mistakenly swaped my last and first name on a few of those bonds… thanks |
| Date Posted: Jan/28/2003 11:34 AM Posted By: zender Rank: Senior Member 2K trafael said: |
| Date Posted: Jan/28/2003 1:21 PM Posted By: RallyCap Rank: Senior Member zender said: > Actually Zender, someone on the FlyerTalk boards found a loophole buried deep in the Treasury regulations. If you buy I-Bonds and sell them in the same year, they do not count against the $30K limit. Specific wording: c) Bonds excluded from computation. In computing the purchases for each person, the following are excluded: …(3) Bonds that are purchased and redeemed within the same calendar year. Of course, starting in February, this is moot. Federal Regulations |
| Date Posted: Jan/28/2003 1:22 PM Posted By: iknowwhatfmeans Rank: New Member zender The annual limit is actually $45,000. You can buy up to $30k of I-bonds and $15k of EE Patriot bonds each year. As far as #1 goes, no you can’t. This is the annual purchase limit, it doesn’t have anything to do with how long the bonds are held. where #1 was1) can you buy more than 30.000 / year but sell the surplus before the year’s end? I guess this is only good for bonds bought in January this year… It does not matter how many bonds you purchase during a year as long as on Dec. 31 you are not holding more than your yearly purchase limit (30,000 Ibond 15,000EE). If it did every serious bond flipper here would be in trouble. Although with the increase in holding time you will not be able to cash in your excess purchases within the same year anyway. iknowwhatfmeans and i have a pretty good idea what the bb stands for also Message edited by: iknowwhatfmeans on 01/28/2003 13:23:43 |
| Date Posted: Jan/28/2003 1:33 PM Posted By: zender Rank: Senior Member 2K Hmmm, interesting interpretations by both RallyCap and iknowwhatfmeans. I’m basing my interpretation on the following section from the savings bond owners manual: 3.3. Purchase limits You may buy up to $30,000 of I Bonds in your own name each calendar year. You may buy up to $15,000 ($30,000 face value) of Series EE Savings Bonds in your own name each calendar year. There is no purchase limit for Series HH Savings Bonds. Purchases of one series do not count against your limit for the other series. Savings bonds you buy as gifts or prizes for someone else do not count against your annual purchase limits. It seems pretty straightforward as far as I can tell. zender |
| Date Posted: Jan/28/2003 2:36 PM Posted By: RallyCap Rank: Senior Member zender said: > You’re right. The information on the Savings Bond site is pretty straightforward. The question is does the Code of Federal Regulations supersede the owner’s manual? My guess (and it’s just a guess) would be yes. Anyway, in a few days, it becomes an academic question. P.S. The regulations I referenced only mentioned I-bonds. Not sure if there are parallel rules for Series EE. Message edited by: RallyCap on 01/28/2003 14:52:14 |
| Date Posted: Jan/29/2003 4:17 PM Posted By: Turbo55 Rank: Happy Member What is the current interest rate for Series I bonds? |
| Date Posted: Jan/29/2003 5:27 PM Posted By: NicholasDWoolfwood Rank: Member Anyone know what cash back cards do not have a cap on the amount you can recieve back? I guess even at 15k a year the total is only between 150 and 300 (1-2%). Any other bright ideas on how to run money circularly through a cash back card? Paypal would either come up as a cash advance or get you with some kind of fee right? |
| Date Posted: Jan/30/2003 8:06 PM Posted By: FWFFan Rank: Tired Member bump for the last few hours of getting in for 6months |
| Date Posted: Jan/30/2003 9:35 PM Posted By: zender Rank: Senior Member 2K mshen11 said: > Whew, just squeezed out $45,000 on remaining cash rebate cards with available balances. It was a squeaker, but I currently own $90,000 worth of savings bonds and have an equivalent amount in credit card revolving debt. Talk about feeling like I’m in a precarious position. I can start redeeming $20k worth in March and paying down some debt. |
| Date Posted: Jan/30/2003 9:43 PM Posted By: FWFFan Rank: Tired Member hehe. too bad i dont have that high of credit line all my cards are max’ed |
| Date Posted: Jan/30/2003 10:18 PM Posted By: Justalil Rank: Senior Member Zender LOL — Know how it feels, bought ~$51k… Maxed CLs — CC debt approaching 6 figures — BUT $155k+ in SBs. Should be dicey for a while juggling min payments, pay-offs, redemption dates, etc. |
| Date Posted: Jan/30/2003 11:12 PM Posted By: FWFFan Rank: Tired Member our national debt this month surely decreased by a few million bucks |
| Date Posted: Jan/31/2003 7:47 AM Posted By: emaij Rank: Senior Member 1K It’s all over. |
| Date Posted: Jan/31/2003 7:55 AM Posted By: zender Rank: Senior Member 2K emaij said: |
| Date Posted: Jan/31/2003 8:55 AM Posted By: Justalil Rank: Senior Member zender Why wait for Jan? Why not Jul? In fact with CC grace period, why not end of May? |
| Date Posted: Jan/31/2003 10:08 AM Posted By: zender Rank: Senior Member 2K Because I’ve already bought my 45k for this year. I’m going by the Savings Bond Owners Guide restrictions on annual purchase amounts. This was discussed earlier in this thread between RallyCap, iknowwhatfmeans and myself. There are other interpretations of the purchase amoutn restrictions, but so far this is the one that I’m choosing to follow. zender |
| Date Posted: Jan/31/2003 3:55 PM Posted By: Justalil Rank: Senior Member Z Guides are guides. Regulations provide the details and requirements. The guide doesn’t go into detail as to how the limits are calculated, the regulations do. Here is the appropriate reference for calculating EE bond limits: PART 353–REGULATIONS GOVERNING UNITED STATES SAVINGS BONDS, SERIES EE AND HH This clearly states in section 11: c) Bonds excluded from computation. In computing the purchases for each person, the following are excluded: ….. (4) Bonds that are purchased and redeemed within the same calendar year. The link for I-bonds (360.11(c)(3)) was provided in earlier post. If you redeem a bond in the same calendar year you purchase it, it does NOT count against your annual limit. Of course, with the new 12 month redemption periods, it will no longer be possible to purchase and redeem bonds in the same calendar year. BUT Jan 03 savings bonds redeemed this calendar year do not count against ones annual limit. Of course, whether you purchase SBs or not is strictly a personal decision. With 12 month redemption periods, I suspect many will not. For me the new rates will definitely influence my decisions. |
| Date Posted: Jan/31/2003 4:04 PM Posted By: zender Rank: Senior Member 2K Justalil, Your comments are much appreciated. I may indeed buy another 45k in July if the funds are available and then just make July my flip month. zender |
| Date Posted: Feb/03/2003 12:20 PM Posted By: Valentino Rank: Senior Member Hi..all the experts on this topic…need your advise. I read thru’ all the messages but could not find the answer: 1. If i buy 30K (in my name), 30K (in spouse name), 30K (in son’s name – 1 yr old), how can I redeem bond in son’s name? And is he liable for any tax on interest earned? 2. If I own a total of say 150K bonds in the year & sold all but 90K (for 3 of us) before yr end, is that legal? Or can each of us only own 30K of I bonds at any point of time? Thanks. |
| Date Posted: Feb/04/2003 1:05 PM Posted By: cak144 Rank: Senior Member Any thoughts on whether the I Bond or the EE Bond will earn the most interest over the next 12 months for purchases starting in February? I guess that I would be inclined to go with the I Bond since it will earn 4.08% for the next 6 months vs 3.25% for the EE Bond. Unless the I Bond rate drops substantially below the EE Bond rate when the rates change in May, this seems to be the way to go for someone who only intends to hold for 12 months. Any other opinions? |
| Date Posted: Feb/04/2003 1:43 PM Posted By: jbrotheim Rank: Member How much do you think you will clear in a year in profit? zender said: > |
| Date Posted: Feb/04/2003 4:27 PM Posted By: scorched03 Rank: Thrifty Member just sharing to football fans…. remember ryan leaf, the 2nd pick behind manning? when he got his 13 mil signing bonus he stuck in in bonds at 12% interest and now he’s out of nfl… doh. |
| Date Posted: Feb/04/2003 5:13 PM Posted By: petenth Rank: Ancient Member His daddy-in-law is a known financial host |
| Date Posted: Feb/04/2003 6:05 PM Posted By: zender Rank: Senior Member 2K jbrotheim said: > My $90,000 investment should earn me just under $2,200. That takes into account the 3 month loss of interest penalty as well as the varying percentages of cash rebate that I’ll be getting on the several cards that I’ve used. It’s hard to annualize the rate of return though because the money was spent between 9/02 and 1/03 and the bonds will be redeemed between 3/03 and 7/03. It’s better than savings account interest though. How about you? zender |
| Date Posted: Feb/04/2003 6:51 PM Posted By: jbrotheim Rank: Member I just put some of my money that was sitting in my savings into bonds.. I’m pretty leary about carrying the balance like you did, but also very intrigued zender said: My $90,000 investment should earn me just under $2,200. That takes into account the 3 month loss of interest penalty as well as the varying percentages of cash rebate that I’ll be getting on the several cards that I’ve used. It’s hard to annualize the rate of return though because the money was spent between 9/02 and 1/03 and the bonds will be redeemed between 3/03 and 7/03. It’s better than savings account interest though. How about you? zender >> |
| Date Posted: Feb/04/2003 10:12 PM Posted By: tabalard Rank: Senior Member Okay I didn’t read all the previous zillion posts but want to answer a question in a recent post about cashing bonds. I cashed in early Jan and repurchased in late Jan. At a local branch of a bank where I have an account I asked to cash them. The teller had me talk to someone at a desk and we filled out a form for every bond (20 forms). Then she asked me how I wanted the money. I had her deposit it into my account so I could pay for the new ones. I agree about the government (taxpayers)losing money over this deal. It was fun whilst it lasted. |
| Date Posted: Feb/05/2003 5:41 AM Posted By: zender Rank: Senior Member 2K jbrotheim said: |
| Date Posted: Feb/05/2003 8:04 AM Posted By: jbrotheim Rank: Member Does the government really lose money though? Most of the “lost money” will probably be pumped back into the economy. tabalard said: |
| Date Posted: Feb/05/2003 10:36 AM Posted By: RallyCap Rank: Senior Member jbrotheim said: > So using your logic, it’s ok to cheat on your taxes or defraud the Social Security Administration if you pump the ill-gotten gains back into the economy? |
| Date Posted: Feb/05/2003 11:35 AM Posted By: WalStMonkey Rank: Senior Member 1K “So using your logic, it’s ok to cheat on your taxes or defraud the Social Security Administration if you pump the ill-gotten gains back into the economy?“ Both of your examples are illegal. Flipping savings bonds is not. Your comparison is invalid. |
| Date Posted: Feb/05/2003 11:38 AM Posted By: WalStMonkey Rank: Senior Member 1K A more accurate comparison would be it’s ok to take every legally available deduction available under the tax code and it’s ok for senior citizens who are wealthy to take the social security checks they’ve earned. Message edited by: WalStMonkey on 02/05/2003 11:42:23 |
| Date Posted: Feb/05/2003 11:54 AM Posted By: jbrotheim Rank: Member thanks for the backup walstmonkey.. that was my thinking WalStMonkey said: |
| Date Posted: Feb/06/2003 7:45 PM Posted By: orgasmicNYC Rank: Member Ok how exactly does this interest work. I want to purchase about 10,000 dollars worth of I-bonds on my credit card with the current rate of 4.05%. Keep it for 12 months and then redeem it. What can I expect for my monthly interest and what is the risk involved with losing any of my money. Also, I read that there are no 5,000 or 10,000 single ibonds so I will have to purchase more then one I-bond. Please let me know and thank you for all your help. |
| Date Posted: Feb/06/2003 8:08 PM Posted By: FWFFan Rank: Tired Member you should also read the website where you buy the bonds |
| Date Posted: Feb/16/2003 10:03 AM Posted By: btwhale Rank: New Member I was just reading the regulations, and it seems like if you can find someone who is not using their purchase limit for the year to go on the EE bond as co-owner, then you can have the entire co-owned bond count toward their limit. But as co-owner, you can cash in the bond and receive all the proceeds without their consent, since the the bond is registered as “John Smith OR Jane Doe”. For I bonds, the same seems to apply, but you have to make sure that it is the other party’s social security number that appears on the co-owned bond. |
| Date Posted: Feb/20/2003 4:24 AM Posted By: mikeB48 Rank: Senior Member Let me see… if the current rate is 4%, and i buy a $10,000 ibond using cash in a 1.5% rebate paypal account, then I hold for 6 months I will earn $200 in interest, then forfeit $100 of that for cashing them early. So net $100 in interest. (I get back $10,100) So my cost on a $10,000 purchase is $9850 net invested, get back $10,100 in 3 months. =2.538% in 6 months or 5.076% annualized. Sure, its risk free, but not overwhelming. If I hold for a year, it comes out to 4.568% so clearly it pays to do it every 6 months. Is my math right ? |
| Date Posted: Feb/20/2003 6:13 AM Posted By: SUCKISSTAPLES Rank: FW Historian first of all, you need to hold the bonds for 12 months now instead of 6…that rule just changed this month… second, if you are only doing $10k its not worth the hassle…. |
| Date Posted: Feb/20/2003 10:24 AM Posted By: cak144 Rank: Senior Member Any thoughts on whether the I Bond or the EE Bond will earn the most interest over the next 12 months for purchases starting this month? I guess that I would be inclined to go with the I Bond since it will earn 4.08% for the next 6 months vs 3.25% for the EE Bond. Unless the I Bond rate drops substantially below the EE Bond rate when the rates change in May, this seems to be the way to go for someone who only intends to hold for 12 months. Any other opinions? |
| Date Posted: Feb/20/2003 11:06 AM Posted By: Valentino Rank: Senior Member SIS, I think 10K is still worth it. better than putting the 10K in a savings a/c earning o.5%, even a 1-year CD earning 1.5%. On top of that, int. on bonds are not subject to state tax. Am I missing something….or it really is not worth it just doing 10k? Any input is appreciated….cos’ I just bought 10K of bonds in Jan. And how much do you have to buy b4 its worth it?? |
| Date Posted: Feb/20/2003 11:16 AM Posted By: RallyCap Rank: Senior Member cak144 said: > I agree that the I-bond is best for a 12-month flip. The EE rate is derived using the 5-year Treasury note rate, which has continued to declined. So it’s extremely probable that the EE rate will be reset lower in May. Inflation on the other hand has been more steady. The I-bond rate may drop in May, but probably not so drastically that it underperforms the EE for the 12-month period. |
| Date Posted: Feb/20/2003 3:03 PM Posted By: mikeB48 Rank: Senior Member Are there really people who post HERE that dont have an ING account yet ? Why the heck not ? Isnt 2.3% better than .5% ? Plus, they give you $25 when you open an account. (With a referral) I can give you one, but this is not a solicitation. ” better than putting the 10K in a savings a/c earning o.5%, even a 1-year CD earning 1.5%. On top of that, int. on bonds are not subject to state tax. Am I missing something….or it really is not worth it just doing 10k? “ |
| Date Posted: Feb/28/2003 11:04 AM Posted By: zender Rank: Senior Member 2K I’m going to be cashing in my batch of September i-bonds tomorrow on their first day of eligibility. Can anybody offer their experience in performing this task? Should I count on signing them over and leaving them to just be credited to my account? Or, is it something that happens relatively quickly? I’ve got 8 bonds totalling $20k and will be doing this at Bank One. Any/all help is appreciated. Thanks, zender |
| Date Posted: Feb/28/2003 12:51 PM Posted By: tooshy Rank: Frivolous Member My reasons to buy bonds are old-fashioned and probably doesn’t deserve mention in this forum, but I think buying savings bonds is a good savings tool, not made exclusively for maximum bond flipping in large lots. But of course, that’s why I’m not making the kinds of return I could. |
| Date Posted: Feb/28/2003 11:25 PM Posted By: RagingBull Rank: Ancient Member I think bonds are good to buy now because inflation will go up a lot in the future |
| Date Posted: Mar/01/2003 12:48 AM Posted By: robstrash Rank: Ancient Member And you don’t pay state taxes on the bond interest. That’s nice for high tax states like NY and CA, but no benefit for WA and others with no state income tax. |
| Date Posted: Mar/01/2003 8:27 AM Posted By: SUCKISSTAPLES Rank: FW Historian valentino, when i say its not worth it to just do 10k, thats my personal opinion on the hassles of redeeming, tax reporting , etc…if you only make 0.5% in the bank, youll be several hundred ahead, but for most of us heres, doing 10k would only put us 100-200 ahead…almost all of us here have a checking/money market paying over 2%, so the difference isnt as much as you imagine… |
| Date Posted: Mar/01/2003 11:39 AM Posted By: ThomasPaine Rank: Titles are but nicknames… > When I was in high school I bought a ton of these bonds. (These are the only investments minors can buy w/o parental permission/UTMA/UGMA.) I used Citibank to redeem them and they show up as one consolidated line on a 1099-INT. Just redeem them all at the same bank. I think after they lookup the value, they are treated and entered into the treasury system as deposited checks. IMHO, the 1-2% cash back reward is worth the $3000 limit. It makes up for the 3 months of lost interest if I later decide to flip. Personally, I’m hoping I can find student loan rates lower that I bond yields. That would be one sweet arbitrage. Message edited by: ThomasPaine on 03/01/2003 11:45:29 |
| Date Posted: Mar/02/2003 9:16 PM Posted By: cctraderx Rank: Senior Member Zender, At BankONE, just go to the teller and they will deposit like depositing checks at the teller. You just have to present picture ID and sign one in front of the teller. You can fill out the address info ahead of time. It just takes a few extra minutes for them to look up the value of the bonds on their screens. If they are all the same denomination it will make them that much quicker. |
| Date Posted: Mar/03/2003 1:41 AM Posted By: ishita Rank: Member Hi, I am looking to buy more I series bonds than the annual limit of 30K allowed. I have a 3 year old son who does not own any bonds so far. Can I buy with him as the owner, and if yes, how do you sell it. As far as I understand if you are co owner, it counts towards your annual limit – is that true? Please help if anyone knows the answer! Hello!! Does anyone know answer to above questios? I have posted them for a while. If it is being ignored, let me know so!! Message edited by: ishita on 03/10/2003 21:11:10 |
| Date Posted: Mar/27/2003 10:29 PM Posted By: ScrewedUpMyRebates Rank: Member Ishita, If your son is the primary owner and you are the co-owner you can cash them yourself and it counts against his limit, not yours. Since you paid for them with your money (not your son’s), it was never a gift and any taxes owed are your responsibility. See these links: Whose limit: http://www.publicdebt.treas.gov/sav/sbilimit.htm How to cash (talks about co-owners): http://www.publicdebt.treas.gov/sav/sbicash.htm On taxes: http://www.publicdebt.treas.gov/sav/savtxfaq2.htm#taxfaq3 |
| Date Posted: Mar/28/2003 1:27 AM Posted By: Valentino Rank: Senior Member I think you can buy bonds in your sons name (with u as beneficiary?), and cashed the bonds on his behalf (as guardian/custodian). I read somewhere that the earnings he make on the bonds is not subject to income tax (upto $750). Please don’t “quote me” as I’m still in the process of reseaching/confirming this. It’ll be nice to not pay tax and first $750 and only 10% on the next $750 of his earnings. (not sure if he needs to file separate returns or under you). If anyone here has done this before, please provide more insight. |
| Date Posted: Apr/01/2003 10:28 AM Posted By: MarkM Rank: Tired Member Regarding buying/cashing bonds in your children’s names, I believe I found the specific instructions (scroll to bottom). The good news is, yes you can cash on behalf of your child. However, note this critical text: > IF YOU LISTED YOURSELF AS CO-OWNER (as I did, alas), what is explained in the accompanying chart would seem to quash the plans of Valentino, etc, to avoid paying taxes on up to $750 of interest by claiming it as your child’s (in other words I’m pretty confident what ScrewedUpMyRebates wrote in his last post is not correct). If not, and your child is the sole owner, you are probably home free. Oops. Message edited by: MarkM on 04/01/2003 10:37:12 |
| Date Posted: Apr/01/2003 12:05 PM Posted By: Valentino Rank: Senior Member Nope…I’m saying only list your child as Sole_owner. And per savingsbond.gov, you can do this : 2) CASHING BONDS ON BEHALF OF A CHILD 2.1) Can I cash bonds registered in my daughter’s name if: (1) I’m not named as co-owner, or (2) I’m listed as the beneficiary and my daughter is living? Yes, if the child is too young to sign the request for payment and understand the transaction, payment can be made to either parent with whom the minor lives (or to whom legal custody has been granted). The request would be made on the back of the bond as follows: “I certify that I am the parent of Jane Doe with whom Jane Doe resides (or to whom legal custody has been granted). She is ___ years old and is not of sufficient understanding to make this request. John Doe on behalf of Jane Doe” Local financial institutions that redeem savings bonds can pay bonds in the circumstances outlined above. When a local institution is unwilling to use this optional authority to redeem bonds, the signature of the person requesting redemption can be guaranteed or certified at a bank or financial institution, and the bond is sent to the nearest Federal Reserve Bank that handles savings bonds. Note: If your child is old enough to understand the transaction and sign the request for payment, she can cash the bond herself if she provides the required identification |
| Date Posted: Apr/01/2003 12:29 PM Posted By: MarkM Rank: Tired Member Valentino said: |
| Date Posted: Apr/01/2003 12:37 PM Posted By: Valentino Rank: Senior Member Ya….I’m just not sure whats the best way to file “kids” taxes. I was hoping maybe someone that has done this before can provide some of his experience in terms of buying/cashing/reporting. Its not a whole lot of savings (only 150/750 assuming 20% tax-brac). But it sure comes in handy if you need to reduce your AGI for some reason. |
| Date Posted: Apr/02/2003 9:35 AM Posted By: Darq Rank: Senior Member Ok.. tell me if i have this correct: If you buy $10k in I bonds right now at 4%, you would get $400 after one year, but you’d lose $100 (3 months interest) by selling. So your profit would be $300 By buying that $10k on a cash reward credit card (lets just assume you’re getting 2%), you’d gain $200. (or $100 for a 1% cash reward card) So, the total profit on that $10000 is $300 + $200 = $500. (or $400 on a 1% reward card) If you put that $10000 in ING direct for the whole year INSTEAD, you’d get $220 (2.2%), but you could withdraw that money at any time. So… basically you’d be gaining an extra $500-$220 = $280 in exchange for LOCKING UP your money for a year? And if you only have a 1% reward card, you’re only gaining $400-$220 = $180 Yeah, it’s a 1.8%-2.8% extra gain, but i’m not entirely sure that i want to lose access to all those funds for so long just for $280… I suppose if i had $50k of extra cash lying around, perhaps, but i guess right now, this might not be for me. Message edited by: Darq on 04/02/2003 09:40:55 |
| Date Posted: Apr/02/2003 10:03 AM Posted By: klipdrift Rank: Ancient Member Darq, I think you are missing the main point that is being put forward, use a rebate card to buy the bonds, trf to a 0% card and use their money! You do not have to have “cash lying around”. |
| Date Posted: Apr/02/2003 10:10 AM Posted By: Darq Rank: Senior Member klipdrift – Understood. But, if you were using a 0% credit card (assume you have a $10k limit), you could alternatively deposit $10k of those balance transfer checks into your ING account. So, my calculations would still be relevant. But i guess you wouldn’t be “tying up” any of your ACTUAL cash.. so i guess it’s slightly different. EDIT: but now that i’m thinking about it, you would potentially be maxing out your credit cards (and possibly lowering your credit score) just to make an additional 1.8%-2.8% Message edited by: Darq on 04/02/2003 10:12:30 |
| Date Posted: Apr/02/2003 10:20 AM Posted By: zender Rank: Senior Member 2K Darq said: > Not necessarily the same thing. Balance transfer checks aren’t always free of charge to use and frequently don’t earn rewards. Bond purchases, however, count as direct purchases and do earn rewards. |
| Date Posted: Apr/02/2003 10:40 AM Posted By: Darq Rank: Senior Member That’s true. i’m mixing up all these credit card deals in my head. So, i guess bottom line is if you have the cash, you’re locking it away for a year in exchange for 1.8%-2.8% extra gains (over ING direct). If you DON’T have the cash (or want to use a credit line instead), you’re using a 0% credit card (which may or may not lower your credit score, depending on your limits) in exchange for 4%-5% gains (3% from the bond, 1%-2% from the card) |
| Date Posted: Apr/02/2003 11:21 AM Posted By: Alcibiades Rank: Senior Member 10K Buying bonds would best compete with and be compared to a CD. Bonds have the better potential returns because you can buy with a rewards credit card, and because I bonds pay 4.08% right now. That may change though, but CPI isnt declining, so dont think the interest will go down very much at end of April(or is it end of May). Message edited by: Alcibiades on 04/02/2003 15:35:50 |
| Date Posted: Apr/02/2003 11:27 AM Posted By: tooshy Rank: Frivolous Member Agree with Alcibiades. Also 1.8-2.8% (if you have cash) or 4-5% (if you don’t have cash) extra gains makes the argument more compelling to buy bonds either way. Where can you earn interest on other people’s money (OPM), besides real estate? |
| Date Posted: Apr/02/2003 11:34 AM Posted By: zender Rank: Senior Member 2K Alcibiades said: > And bonds can be purchased with reward credit cards, unlike CDs. |
| Date Posted: Apr/02/2003 12:55 PM Posted By: XClass Rank: New Member Here’s an interesting question that I couldn’t really find an answer for on the Bond website. Can you issue savings bonds to legal business entities (i.e. companies, corporations, etc)? |
| Date Posted: Apr/02/2003 1:38 PM Posted By: MarkM Rank: Tired Member Darq said: Message edited by: MarkM on 04/02/2003 15:01:48 |
| Date Posted: Apr/02/2003 2:22 PM Posted By: Darq Rank: Senior Member MarkM said: > Very good point. To be clear, i’m not trying to talk anyone out of doing this. In fact, i’m really just trying to see if i can rationalize locking extra money into the bond market. I may actually put some of my extra cash into these bonds, since my alternative is my ING account. So, thank you to everyone who has been sharing their input… .. so are I-bonds the way to go right now? EE bonds? something else? And from what i’ve understood, i can spend $1000 per transaction, but i can have any number of transactions? Thanks! |
| Date Posted: Apr/02/2003 2:49 PM Posted By: zender Rank: Senior Member 2K Darq said: |
| Date Posted: Apr/02/2003 10:47 PM Posted By: Turbo55 Rank: Happy Member How do they calculate the interest earned? I entered my $1000 I-Bond issued Jan 2003 (4.08%) on the Savings Bond Calculator and it’s showing that it’ll earn $3.20 by the end of May 2003. I thought the interest earned is calculated like this: $1000 x 4.08% / 12 = $3.4 (per month) Therefore, at the end of May 2003, it’ll be 5 months, so it’ll be: $3.4 x 5 = $17 Someone verify and explain. |
| Date Posted: Apr/03/2003 8:32 AM Posted By: MarkM Rank: Tired Member Darq said: >> Just to be sure of no misunderstanding, I made a mistatement there: the interset is not “tax free,” it is only partially tax free (of state & local taxes). I already corrected it in my original post, but the quote of my mistake is still in Darq’s post. Turbo55 – the bond calculator shows the interest as if you cashed them on that date, so it reflects a 3 mo interest penalty. that is why it only shows 1 mo interst for 4 mos. Of course you can’t cash it until 6 months elapse anyway (which the code in the “note” column should indicate). |
| Date Posted: Apr/03/2003 1:15 PM Posted By: Turbo55 Rank: Happy Member MarkM said: |
| Date Posted: Apr/04/2003 12:55 PM Posted By: jessiezyt Rank: Member How to find out the cash back %. I have Bank of America Rewards card and American Express CC opened throght Costco Message edited by: jessiezyt on 04/04/2003 12:58:31 |
| Date Posted: Apr/06/2003 7:14 PM Posted By: FWFFan Rank: Tired Member speculations on whether rates will go up or down and by how much after april? |
| Date Posted: Apr/06/2003 8:37 PM Posted By: docinthebox Rank: Senior Member I’ve been putting aside $2k of my paycheck every month towards an emergency cash fund. Would this be the best way to invest that money? I have an AMEX Blue Cash card, which gives 1.5% cash back. So that means if I cash and repurchase my I-bonds every year, I get an annual return of 4% + 1.5% – 1% (3 month penalty) = 4.5% per annum. If I don’t cash and repurchase, and just leave them alone, I get 5.5% for the 1st year, and 4% thereafter. The only downside is that the money is locked in for the first year. Is that right? I have a Presidential Bank account too which pays 3% interest. This is 50% more so I think this is worth doing. Thanks in advance for any advice/comment. |
| Date Posted: Apr/07/2003 6:05 PM Posted By: Alcibiades Rank: Senior Member 10K docinthebox said: > This is their new CashBack card I believe. Is rental car CDW covered in your card agreement ? |
| Date Posted: Apr/16/2003 3:35 AM Posted By: tooshy Rank: Frivolous Member Bumping….time to think about purchasing i bonds before April 30 since rates will change May 1. However, if the inflation rate will rise, then holding off til May 1 makes sense. (if fixed rate stays the same or goes higher too) From the savings bonds website, The earnings rate for I Bonds is a combination of a fixed rate, which will apply for the life of the bond, and the inflation rate. The 4.08 percent earnings rate for I Bonds bought from November 2002 through April 2003 will apply for the first six months after their issue. The earnings rate combines the 1.60 percent fixed rate of return with the 2.46 percent annualized rate of inflation as measured by the Consumer Price Index for all Urban Consumers (CPI-U). The CPI-U increased from 178.8 to 181.0 from March 2002 to September 2002, a six-month increase of 1.23 percent. Does anyone have a clue specifically if CPI-U increased from September 2002 to March 2003? The 2.46 annualized rate was derived from 181.0/178.8, so if we knew what the March 2003 numbers are we could do our own math. Message edited by: tooshy on 04/16/2003 05:28:37 |
| Date Posted: Apr/16/2003 5:32 AM Posted By: tooshy Rank: Frivolous Member Didn’t bump the first time….or this time. Is this broken? Message edited by: tooshy on 04/16/2003 05:36:52 |
| Date Posted: Apr/16/2003 5:38 AM Posted By: SUCKISSTAPLES Rank: FW Historian i bet its the filters, theyre not working right for me, and i didnt see this thread “bumped” unless i manually reset them each time im on the finance forum page |
| Date Posted: Apr/16/2003 10:07 AM Posted By: freebee Rank: Senior Member Bought some bonds… about 3k worth with the ol discover card. Need to save some money, no need for flipping here…just gotta get rid of 10 grand or so in the next couple of months. This is probably the highest yeild no/low-risk investment right now. |
| Date Posted: Apr/16/2003 10:08 AM Posted By: RealJustice Rank: Member tooshy said: > Here are the numbers, from the Bureau of Labor statistics web site: 2002 Sep 181.0 Oct 181.3 Nov 181.3 Dec 180.9 2003 Jan 181.7 Feb 183.1 Mar 184.2 Message edited by: RealJustice on 04/16/2003 10:21:13 |
| Date Posted: Apr/16/2003 10:39 AM Posted By: zender Rank: Senior Member 2K tooshy said: |
| Date Posted: Apr/21/2003 2:07 PM Posted By: tooshy Rank: Frivolous Member Zender & SIS, yes I think it was the filters, I’m changing it to “All Dates” ~ thanks |
| Date Posted: Apr/22/2003 3:23 PM Posted By: Turbo55 Rank: Happy Member RealJustice said: > Does this mean the interest for May is going to be higher? Message edited by: Turbo55 on 04/22/2003 15:48:24 |
| Date Posted: Apr/22/2003 3:27 PM Posted By: RallyCap Rank: Senior Member Turbo55 said: > Please see this thread. |
| Date Posted: May/17/2003 4:04 PM Posted By: PMing4All Rank: Senior Member How does one purchase I Bonds using a Credit Card? TreasuryDirect states that it will not accept a credit card as a valid payment method. Whose services can I use to purchase I Bonds? Thanks. |
| Date Posted: May/17/2003 4:11 PM Posted By: DirkDIggler Rank: Senior Member 3K PMing4All said: > … |
| Date Posted: May/17/2003 4:13 PM Posted By: PMing4All Rank: Senior Member Ahh! Thanks a lot. |
| Date Posted: May/17/2003 4:47 PM Posted By: MarkM Rank: Tired Member FWIW, this deal is essentially dead, with the minimum SB holding period changed to 12 months, plus lower interest rates, your annualized return is probably about 4.5% now, not 7%. And it will be totally dead in 7 months, when yu can no longr buy bonds with credit cards. |
| Date Posted: May/17/2003 4:53 PM Posted By: FWFFan Rank: Tired Member thats why i havent bought anything since the 12months switch. its no longer ‘worth it’ Message edited by: mshen11 on 05/17/2003 16:54:14 |
| Date Posted: May/17/2003 6:40 PM Posted By: asabase Rank: Senior Member I just bought some because 4+% is still better than 2.1% in ING. I still get to float it for 6 months on a CC. Does anyone know exactly when they will remove CC purchases? Is it for certain the end of the year or sometime sooner? |
| Date Posted: May/17/2003 6:49 PM Posted By: SUCKISSTAPLES Rank: FW Historian Bonds are STILL the best investment for your cash you wont need for 12 months, paying better than any CD or MMA, and you can hold them even longer (for as long as bond rates beat bank rates)… The flipping strategy had a predicted death, now they should be used as a tool to park cash…and you STILL get the “1% bonus” by buying using a CC…. I just hope they dont cutoff CC purchases until after Jan 1 2004 (so I can buy another round) |
| Date Posted: Jun/27/2003 10:07 PM Posted By: BBallfan2003 Rank: Member I guess I will go ahead and buy a little more too. Been selling some stocks and cannot find places that I feel comfortable putting it. (In stocks that is) So, while I have a LOT at ING in case I want to buy a house with cash, I might as well buy some i-bonds with a little. What I do not understand is why cant these bonds be used as collateral if we ever needed it ? |
| Date Posted: Jun/27/2003 10:33 PM Posted By: BBallfan2003 Rank: Member Help me estimate the yield on a $5000 Ibond bought with a 1.5% cash rebate card. So effective cost: $4925. I read where the current rate is 4.66% through oct. If it stayed that way for the entire 1 year and I cashed out, I compute a 6.25% yield. $5233/$4925. Is that correct ? How much is the yield likely to drop come nov ? |
| Date Posted: Jun/28/2003 3:20 AM Posted By: VagrTiger Rank: Senior Member BBallfan2003 said: > You didn’t take into account that 4.66% APR is compounded semiannually which gives you 4.71% APY on $5000, and your effective yield is 5235/4925-1=0.0631 or 6.31% Now if you plan to redeem your bonds in exactly 1 year, then you will lose last 3 months of interest, thus your effective yield would be 5.1% Finally these computations won’t hold after November 1, when new fixed and inflation rates will be set. Most likely both will decrease. We can speculate that Fed will drop the fixed rate by 0.25% and assume that inflation rate will be 0.5%, then the new rate will equal fr+2*ir+fr*ir = 2.275%. That’s just my very wild guess. Message edited by: VagrTiger on 06/28/2003 03:26:49 |
| Date Posted: Jul/16/2003 11:07 PM Posted By: deallover Rank: Ancient Member I see purchase method as direct deposit from chking or savings account. Where can I find a way to purchase I bond using credit card? Thx |
| Date Posted: Jul/17/2003 12:20 AM Posted By: DickOtter Rank: Happy Member deallover said: > Read the first post in this thread for the URL. I can’t believe this guy is a senior member. |
| Date Posted: Aug/04/2003 8:01 PM Posted By: bolidew Rank: Senior Member Bump for a good deal. |
| Date Posted: Aug/04/2003 9:49 PM Posted By: micecali Rank: Broke Member Hi guys, I just purchased $2000 of I-bond. My question here is that with the 4.66% yield, how much can I get after 1 year (minus the 3 months penalty). Thanks! Oh, I bought it using Discover card. Thanks for the great deal & info about this. |
| Date Posted: Aug/05/2003 1:52 AM Posted By: happypants Rank: Senior Member 2K micecali said: > The yield is going to change in November, maybe downwards, so an accurate answer cannot be given. To estimate, use simple math – $2000 x .0466 x .75 = interest for year with 3 month penalty subtracted. |
| Date Posted: Aug/05/2003 1:59 AM Posted By: DeGlass Rank: Senior Member 4K The hard-selling of TreasuryDirect has begun! Savingsbond.gov brings you to TD! To buy Sbs using CC, visit http://www.publicdebt.treas.gov/ols/olshome.htm micecali said: > http://www.publicdebt.treas.gov/sav/savwizar.htm |
| Date Posted: Aug/05/2003 1:50 PM Posted By: micecali Rank: Broke Member Thanks for the info. It should be around $70 of earning for 9 months with $2000 |
| Date Posted: Aug/06/2003 12:29 AM Posted By: tolik Rank: Senior Member sorry, didn’t want to read through the whole thread, but a quick question: if I put 5K on my AMEX, how soon could I sell the bonds to get my 5K back? assuming all i really want is the 2% cash back… |
| Date Posted: Aug/06/2003 8:34 AM Posted By: noksagt Rank: Senior Member 2K tolik said: |
| Date Posted: Aug/07/2003 7:22 PM Posted By: Azurik Rank: AZN sensation Ok guys.. I’ve looked and I really can’t find information pertaining to this. My dad is sick of earning a measly .97%-1.07% at his local banks. ING is 1.8% right now which barely keeps up with this year’s inflation. He has given me $120,000 to buy bonds under my American Express Platinum card. I’m planning to get 1.5%-2.00% back after converting the points to airline tickets and then selling it on eBay. I plan on purchasing $30,000 of I-bonds under his name and $30,000 under my mother’s. That leaves me with $60,000 left. They also plan on redeeming these bonds when they retire, around another 10 years. EE-bonds are giving me a measly 2.66%, and under their time frame, isn’t worth it. Paperless I-bonds can’t be purchased with CC’s (at least last time I checked). Since we need to get rid of another $60,000, how can we utilize AMEX’s rewards. Suck it up and go along with the EE’s? |
| Date Posted: Aug/07/2003 7:45 PM Posted By: RJSachs Rank: Senior Member See my response in the other Savings Bond thread. |
| Date Posted: Aug/18/2003 8:54 AM Posted By: Darq Rank: Senior Member (nevermind) Message edited by: Darq on 08/18/2003 09:43:39 |
| Date Posted: Aug/18/2003 9:56 PM Posted By: cak144 Rank: Senior Member Azurik, The $30k limit on I bonds applies to the primary ss# used to buy the bonds. If you haven’t already purchased bonds using your own ss#, you could purchase $30k jointly with your father or mother, with your ss# as the primary and theirs as the secondary. The income is taxed to the ss# of the person who redeems the bonds, which would be your father or mother. You could do the same thing to buy another $30k with a sibling as the primary ss#. |
| Date Posted: Aug/20/2003 4:00 AM Posted By: collegekid Rank: Member Hey guys, I wonder how do you redeem the interest? Do you bring the I-bond that they sent you in mail and bring it to a bank? Will the bank give you $100 + interest in cash? -great thread. too bad i don’t have the money to play this game. Hope you guys will come up with something similiar in the future. |
| Date Posted: Aug/20/2003 7:52 AM Posted By: cak144 Rank: Senior Member Collegekid They will give you the value of the bond at the time of redemption, which is the principal amount plus accrued interest (which will be reduced for 3 month interest penalty for early redemption if applicable). |
| Date Posted: Aug/22/2003 6:23 PM Posted By: intlowner Rank: Happy Member ARE there any other methods, aside from online, to purchase series I bonds? I have $100,000 in cash at 5.5% interest and want to put it somewhere. If I can earn 7%/year, this is a great deal! Anywhere I can purchase a full $100,000 at once? |
| Date Posted: Aug/22/2003 6:40 PM Posted By: TruthTeller Rank: Senior Member 1K intlowner said: > I’m guessing you haven’t even begun to read this thread. |
| Date Posted: Aug/22/2003 6:49 PM Posted By: Alcibiades Rank: Senior Member 10K intlowner said: > Where do you get 5.5% interest now, or is what you are paying ? Message edited by: Alcibiades on 08/22/2003 19:01:51 |
| Date Posted: Aug/22/2003 6:53 PM Posted By: DeGlass Rank: Senior Member 4K le.Alcibiades said: > http://www.fxstreet.com/nou/continguts/centralbanks.asp |
| Date Posted: Aug/22/2003 6:58 PM Posted By: Alcibiades Rank: Senior Member 10K wow … Country Current Interest Rate Previous Last Change Key Rate Turkey 38.0% 41.0% June 2003 O/N Borrowing |
| Date Posted: Aug/22/2003 7:04 PM Posted By: DeGlass Rank: Senior Member 4K Well…. USD-Lira |
| Date Posted: Aug/22/2003 7:07 PM Posted By: Alcibiades Rank: Senior Member 10K Time for a Turkish CD, but are banks failing everyday there ? Message edited by: Alcibiades on 08/22/2003 19:07:39 |
| Date Posted: Aug/22/2003 7:10 PM Posted By: DeGlass Rank: Senior Member 4K http://www.citibank.com.tr/ |
| Date Posted: Aug/22/2003 9:09 PM Posted By: Beck446 Rank: Member DeGlass, I’d be curious to know what you’re real rate of return is after transaction costs and expected inflation. Likely this number will be much closer to 3% and involves the risk of changes in inflation. Savings bonds will still get you a gauranteed 5-6%. Also, do you know any way of buying Chinese yuan? |
| Date Posted: Aug/22/2003 9:19 PM Posted By: DeGlass Rank: Senior Member 4K Beck446 said: > I think a 3% return is still way too optimistic. With the Baathists blowing up the oil pipelines every other week, only GW Bush knows how much of a blow it is to the Turkish economy. I’ve never argued against SBs or in favor of TLR…. > I think we’ve concluded you’d have to fly to Shanghai. Personally, I’m more interested in Chinese ADRs than the currency itself. |
| Date Posted: Aug/22/2003 9:31 PM Posted By: Beck446 Rank: Member DeGlass, you’re probably right on all those scores. About the Chinese currency though, did anyone ever rule out EverBank. They seem to be offering yuan at 0-.5%. Never actually pursued it though. |
| Date Posted: Aug/23/2003 12:00 AM Posted By: FWFFan Rank: Tired Member anyone want to compute for the lazy the next set of projected interest rate based on the cpi numbers? |
| Date Posted: Aug/23/2003 1:36 PM Posted By: Beck446 Rank: Member DeGlass, Another question for you: Why do you think buying Chinese company ADR’s is such a good deal right now? I would argue that they have all had incredible run-ups, expose you to undue corporate governance risks, and are generally not transparent at all. The currency, on the other hand, is almost universally agreed to be undervalued and your only risk by owning Juan is 1)the bank you buy through doesn’t honor your deposit for whatever reason or 2)China decides not to fully join WTO, which I see as highly unlikely. |
| Date Posted: Aug/23/2003 3:26 PM Posted By: DeGlass Rank: Senior Member 4K Beck446 said: > I’ve already bought into Chinese ADRs (I’m not going to name them pursuant to forum policies), hence the statement. I’m betting on: 1) strong and consistent growth of the Chinese economy, and 2) increase in RMB’s value once they decide to relax the peg to the USD You forgo the first advantage by using the currency itself as an investment instrument. AFAIK, foreigners cannot trade RMB freely due to exchange controls; unless you’ve figured out how to hold the currency outside of the PRC…Everbank is not liquid enough. Message edited by: DeGlass on 08/23/2003 15:31:03 |
| Date Posted: Aug/23/2003 3:32 PM Posted By: FWFFan Rank: Tired Member is there forum policy? if so i will delete my posts |
| Date Posted: Aug/23/2003 3:36 PM Posted By: DeGlass Rank: Senior Member 4K mshen11 said: > http://www.fatwallet.com/forums/forum.php?catid=52&threadid=205213&highlight_key=y&keyword1=stock As always, enforcement appears to differ based on the phases of the moon (or Mars) Message edited by: DeGlass on 08/23/2003 15:37:08 |
| Date Posted: Aug/23/2003 4:10 PM Posted By: FWFFan Rank: Tired Member maybe if its done in good taste (like mine ) ? |
| Date Posted: Aug/23/2003 4:20 PM Posted By: Azurik Rank: AZN sensation Anyways, back on topic alittle bit I still have 60k from that 120k. Can anyone verify I can buy more I-Bonds through my brother or someone and list the co-beneficary as my parent(s) in order to avoid going over the maximum I-Bonds allowed per person. I bought 30k I-Bonds for Dad. I bought 30k I-Bonds for Mom. Can’t buy it under my SSN for Mom or Dad considering I bought some already. My brother is still available. A friend is also willing to lend his SSN. |
| Date Posted: Aug/23/2003 4:30 PM Posted By: DeGlass Rank: Senior Member 4K http://www.publicdebt.treas.gov/sav/sbigift.htm |
| Date Posted: Aug/27/2003 2:48 PM Posted By: Turbo55 Rank: Happy Member What’s the last date for purchasing I-Bonds this month? I don’t see much posting on this thread anymore. Are I-Bonds dying down? |
| Date Posted: Aug/27/2003 2:59 PM Posted By: DeGlass Rank: Senior Member 4K https://wwws.publicdebt.treas.gov/SD/SBDHome?PROC=SBDHome&button.x=84&button.y=12 http://www.publicdebt.treas.gov/ols/olshome.htm |
| Date Posted: Aug/27/2003 3:01 PM Posted By: SUCKISSTAPLES Rank: FW Historian Turbo55 said: > most people who want them have already purchased them this year, and flipping has (or will be soon) eliminated, first with the longer redemption times, next with the demise of the ability to buy bonds using a credit card which will end in December |
| Date Posted: Aug/27/2003 4:19 PM Posted By: arl Rank: Senior Member Maybe someone will convince them to lower the minimum holding times to 6 months again, since with electronic purchases their transactional costs are near nothing. |
| Date Posted: Aug/27/2003 11:52 PM Posted By: drdsouz9 Rank: New Member How do you sell ibonds? Thanks |
| Date Posted: Aug/28/2003 12:35 AM Posted By: DeGlass Rank: Senior Member 4K http://www.publicdebt.treas.gov/sav/sbfaqcsh.htm |
| Date Posted: Oct/06/2003 5:21 PM Posted By: tooshy Rank: Frivolous Member I’m buying a modest amount of I bonds AFTER November 1 using a promotional 5% cash back with AT&T Universal (maximum $100 rebate). I figured it would be easier to make a single arbitrary purchase of the maximum rebate instead of making numerous single purchases up to the maximum. My question: BEFORE or AFTER November 1? If the fixed rate goes up as others are projecting, I want to wait til AFTER. (The total rate is not that important to me.) Do you agree? Just wanted to revive a discussion about savings bonds since this is October and if purchases are made this/next month a little advance planning would be wise, also since these last few months will offer the very last buying opportunities with credit card…. We are allowed up to 30K I bonds per person….but how significant is an extra 1 to 1.5% credit card rebate if the fixed does not go up and inflation is nil? Do you still think I bonds are a good investment or is TIPS or some other ‘safe’ investment better? |
| Date Posted: Oct/06/2003 7:42 PM Posted By: EricGo Rank: Senior Member 2K Well, I just bought my first round of I bonds. I now recognize the attraction – holding $1000 bills is pretty cool Thanks to all the contributors to this thread. The money actually belongs to Non-US citizen family members; the bonds are in my name, with my wife as a co-owner. I am seeking advice how to ensure that if the two of us die, the I-bonds end up with their rightful owners. My children are too young to deal with this, I am disinclined to rely on the US side of the family, and I do not have estate planning/POA set up other than a letter my wife and I wrote stating that we want her non-US sister to be the children’s guardian if neither of us can. Thanks ! |
| Date Posted: Oct/07/2003 1:18 AM Posted By: siliconbeaver Rank: Addicted Member tooshy, Here is my understanding, bonds is the last choice to invest. safe but extremely low return. Why FWers here buy bonds? (they quite smart, right?) They get so-called “free-money” If you receive a C.C. with good cash-back promotion, use it to buy I/EE bonds as much as possible. normally, the cc with good cash-back doesn’t offer 0% APR same time. you have to figure out a way to pay the monthly bill FULLY. now, how to pay the cc bill? Ok, dig out second CC, which offers no-fee BT and a long enough (15-month?) 0% APR period. Transfer FULL balance of the 1st cc to the 2nd CC. you are done. The cash-back (as high as 5%) on the 1st CC could be tax-free. enjoy it. The interest from the I/EE bonds, just as “bonus” (now 4.66%). Don’t forget tax. From here, the money stuck in the bonds, is kind of “free-money” from cc. that’s why FWers love it so much. |
| Date Posted: Oct/19/2003 8:44 PM Posted By: kewldealspdx Rank: Addicted Member Can you still buy using ur credit card. i registered with the treasury website and it asked for my bank account details. Now when i go to buy the bonds it automatically brings about my bank account. |
| Date Posted: Oct/20/2003 3:13 PM Posted By: jinju Rank: Addicted Member Taken from the savingsbonds website: Q: Can I still buy paper bonds after December 30, 2003? If so, how? A: After December 30, 2003, you’ll no longer be able to buy paper savings bonds on the Internet through Savings Bonds Direct. However, you’ll still be able to purchase paper EE and I bonds through participating, local financial institutions. Treasury’s long-term goal is to stop issuing all paper securities, however, a date hasn’t been announced. Please continue to visit our website at http://www.treasurydirect.gov for the most current information. Now, if only the B&M banks accepted credit cards to pay for bonds. Also, another option maybe to use a cash back Debit card when purchasing bonds from banks. Any more inputs on this? |
| Date Posted: Oct/20/2003 3:23 PM Posted By: AaRdVarK Rank: Senior Member I’m also looking at getting the 5% AT&T card and buying bonds. It looks like I won’t be able to max it out in 2003, though, due to the $1000/month limit. Is this really the case? Does anyone have a strategy for charging more than $1000/month. |
| Date Posted: Oct/20/2003 4:30 PM Posted By: kewldealspdx Rank: Addicted Member Have u tried to get the AMEX 5% cashback card. The 5% cashback is only when u carry the balance over for 3 months. But they give u 0% for the first 6 months if do BT. I converted my optima platinum to that AMEX 5% cashback card. It’s not blue. it’s the ordinary card. |
| Date Posted: Oct/21/2003 8:39 AM Posted By: justdoit Rank: Senior Member 1K can you point us to the card on AmericanExpress.com? |
| Date Posted: Oct/21/2003 9:11 AM Posted By: kewldealspdx Rank: Addicted Member Couldn’t find it on their website. But i know it exists. Just call them. |
| Date Posted: Oct/21/2003 9:15 AM Posted By: SUCKISSTAPLES Rank: FW Historian AaRdVarK said: > what $1000/month limit? The savings bonds site lets you buy $5000 per TRANSACTION, and you can do multiple transactions right after each other… the only thing that will stop you is your Citibank credit limit. Its very easy to max out the 2003 reward with $6000 in Bond purchases as long as yout credit limit is high enough |
| Date Posted: Oct/21/2003 9:24 AM Posted By: justdoit Rank: Senior Member 1K what is the card called? |
| Date Posted: Oct/21/2003 9:27 AM Posted By: SUCKISSTAPLES Rank: FW Historian justdoit said: > AT&T http://www.fatwallet.com/forums/forum.php?catid=52&threadid=231758 |
| Date Posted: Oct/21/2003 9:31 AM Posted By: AaRdVarK Rank: Senior Member SUCKISSTAPLES said: what $1000/month limit? The savings bonds site lets you buy $5000 per TRANSACTION, and you can do multiple transactions right after each other… >> The beginning of the thread has you saying this: “only catch is you can only buy $1000 in bonds total online per month, if they see too many transactions theyll cancel it…lots of people do this to rack up frequent flier miles…” I’m guessing that information is out of dayte now. I’ll start plowing through the rest of the thread. Thanks! …and I just found your post saying this: “It was originally rumored that you could only get $1k in bonds per month, we found that to be FALSE. The rule, as stated the website, is $1k per website transaction. You can do MULTIPLE transactions in quick succession. I purchased $16k in Oct w/o problem (except for a “server error” on the website) “ That answers that question. Message edited by: AaRdVarK on 10/21/2003 09:33:10 |
| Date Posted: Oct/21/2003 9:32 AM Posted By: SUCKISSTAPLES Rank: FW Historian the purchasing limit changed long ago…this thread is 2 years old. current rules are $5k per website transaction, and you can do repeated transactions right after another Message edited by: SUCKISSTAPLES on 10/21/2003 09:38:11 |
| Date Posted: Oct/21/2003 12:54 PM Posted By: makitaws Rank: Senior Member kewldealspdx said: > I assume you are talking about AMEX (green) cash rebate card; which has now been replaced with the AMEX Blue Cash (identical cashback, except its now a Blue card) Fatwallet thread Message edited by: makitaws on 10/21/2003 12:55:30 |
| Date Posted: Oct/25/2003 11:07 PM Posted By: siliconbeaver Rank: Addicted Member if spending on this 5% citicard over $20000 in promotion period. Whay you can get? $1000 or $600? I called the citicard. the lady over phone couldn’t answer real question she kept saying 5% beofre 12/01 (promotion due day) and $300 a year. But it’s not a answer for my question. I was thinking she’s even worst than a computer. |
| Date Posted: Oct/26/2003 4:40 AM Posted By: EricGo Rank: Senior Member 2K I am thinking about using my HELOC to make a bit of money with an I-bond.. Pentagon Federal offers 2.9% for the first 12 months of the HELOC; My AMEX Blue will rebate 1.5%, and I am figuring the I-bond will return 4.5%. I calculate on every $1000 for the 10 months of the bond: $24.166 interest to the Heloc, $15 rebate, and $37.5 interest from the bond, yielding 28.34, or 2.83%. There will be Income Tax on the profit; some people may be able to deduct some the HELOC interest. Opinions ? Edited 10/26: Clarification that calcs for 10 months Message edited by: EricGo on 10/26/2003 05:47:22 |
| Date Posted: Oct/26/2003 2:55 PM Posted By: WalStMonkey Rank: Senior Member 1K Federal tax due on the interest earned on the I-bond when redeemed. No state or local tax. No tax on the credit card rebate. What’s holding you back? If you can afford to lock your money up until October 1 of next year and a tax advantaged return of 5.5% is worth it to you what are you waiting for? |
| Date Posted: Oct/26/2003 3:51 PM Posted By: EricGo Rank: Senior Member 2K WalStMonkey said: > Why, the FW stamp of approval, of course |
| Date Posted: Oct/26/2003 5:54 PM Posted By: fishballer Rank: O.W.L. questions about calculating your bonds worth. i have some bonds issued 05/2003, and i used the online calculator to check it, and it states that for may, june, july and auguest there were no interest paid. does it take 3 months for the bond to start accumulating interest? Message edited by: fishballer on 10/26/2003 17:58:17 |
| Date Posted: Oct/26/2003 7:24 PM Posted By: fraggerman Rank: Senior Member If I understand properly, after Dec. 31 we can only buy bonds at the bank with a check. My CC company sends me checks in the mail once in awhile which are concidered cash advances and will charge me interest right away. But if I just pay the check amount to my credit card company right away I can avoid that interest… right? I’m just thinking this may be a way to still use the cc and still get the rewards. |
| Date Posted: Oct/28/2003 7:28 AM Posted By: Venusian Rank: Senior Member well i read through most of the thread, but not all. anyone still doing this deal want to post an update? I see that the limit is now 5k/transaction. How long do you have to hold the bonds for? what’s the return? and CC payment ends this year? |
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