Wealth

‘It’s like going to the DMV online’: What to know about buying Series I savings bonds via TreasuryDirect

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Federal Series I savings bonds have seen record demand. These are inflation-protected assets that offer a near-risk-free asset and a 9.62% annual return.

However, it is not easy to buy I bonds. TreasuryDirectFinancial advisors claim that the U.S. Department of the Treasury has a 20-year-old platform called. 

Matt Stephens, a certified Financial Planner with AdvicePoint Wilmington, North Carolina explained that buying I bonds is difficult for older clients.

Inflation is driving up the demand for I bonds

I bond interest has two parts. A fixed rate and a variable, which are adjusted every six month based on the Consumer Price Index. This is a key measure for inflation.

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According to a Treasury official: 1.85 million savings bond accounts have been opened since November when the annual rate increased to 7.12%. 

“We’re committed in ensuring that TreasuryDirect user have a positive customer experience,” a Treasury spokesperson stated. He highlighted recent changes like shifting resources, hiring temporary staff, website and phone support improvements, and highlighting recent changes such as shifted personnel and hiring temporary staff.

“We are also working to develop a new, modern replacement for the existing TreasuryDirect system,” they said.

How to purchase I bonds

There are two ways you can buy I bonds. You can purchase them electronically through TreasuryDirect with a limit of $10,000 per calendar year. You can also purchase them in paper form using your TreasuryDirect account. federal tax refundYou can also purchase an additional $5,000 per person. 

Before you can buy electronic I bonds, it is necessary to open a bank account. TreasuryDirect accountBy providing your tax ID number and email address, as well as banking details.

TreasuryDirect.gov’s password log-in page

CNBC.com

However, it is important to keep your account number, and password, safe as multiple failed attempts can cause your account to be locked. This will require a call to customer support, which is currently experiencing “higher-than-usual call volume.” according to the website.

Another issue is that some password managers won’t automatically fill your credentials. This is because part of the login requires that the password be typed on a virtual keyboard using your cursor.

Some accounts may require additional identity verification

Tommy Blackburn, a Richmond-based CFP and senior financial advisor at Mason and Associates, frequently assists clients in purchasing I bonds. He said that one of the biggest pain points is additional identification verification.

It can be very difficult to get the signature guarantee from large financial institutions or local ones.

Tommy Blackburn

Mason and Associates senior financial planner

In certain cases, investors may need to complete an application. account authorization formAccording to a Treasury official, this is to prevent fraud. This requires that you sign the form at a credit union or bank and then mail it back.

Blackburn stated that it was difficult to obtain the signature guarantee from both major financial institutions and smaller ones. A Treasury official said that they are looking to expand certification to any notary public. 

To change bank account details, there are additional steps

For TreasuryDirect, there is a similar process. You will need to have a bank change request formThis is what Ken Tumin, founder of DepositAccounts.com and editor, explained to me after he went through the process recently. 

Tumin advised that when opening a TreasuryDirect account you should choose a bank account you intend to keep and maintain long-term. 

I bonds are not right for all investors 

Experts say that while the current I bond rate may seem appealing, it is important to evaluate whether these assets are in alignment with your goals before buying.

Stephens stated that the purchase limits are low, with a few exceptions. The funds cannot be accessed for more than one year. This makes them suitable for “supplementing your emergency fund.” 

Source: CNBC

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