When to buy savings bonds
Thursday, December 16th, 2004
Categorized as: Buying US Savings Bonds
I would like to purchase I bonds, probably through Treasury Direct. Can I bonds be purchased at any time during the year?
Tom’s response
Unlike other Treasury securities, which can be purchased only on specific days, both series I bonds and series EE bonds are available on any business day of the year.
Moreover, Savings Bonds earn interest from the first day of the month no matter what day you invest, so there’s a slight boost by buying them near the end of the month.
When you buy at a bank, the bond’s issue month will be the day of the bank transaction, but when you buy through Treasury Direct, the issue month is the day the Treasury gets the money from your bank, so schedule the purchase a few days ahead of the last business day of the month.
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Tom Adams
Under Tom’s Response, 1st line, there is an”r” omitted from “secuities” Oops.
Otherwise, your sites are TERRIFIC, most informative and helpful, and the best yet on the internet (which has lots of stuff). Thanks
Richard - thanks for reporting the oops (now fixed) but I liked your comment best!
Tom,
I just started looking at bonds but I now that the fixed rate for I bonds is now 0.00%. I have moeny sitting in 2 CDs, main CD is at 3.4% and matures in Nov 09, other won is for interest I get off another account (more to this story).
I would like to avoid investing in stocks as I already have all of my retirement funds in the markets. Would it be right for me to buy one or two I bonds for now and then wait till the fixed rate goes back up in Nov?
Thanks for the great site!
Shane - yes, when CD’s are earning a negative rate after inflation, I bonds look good, even with a 0% fixed rate.
Tom Adams
SO TOM YOU WOULD THINK IT IS ADVISABLE TO BUY I BONDS EVEN WITH THE 0% FIXED RATE? IWAS GOING TO LET MY SAVING 3.05% SIT IN THE BANK TILL THINGS LOOK BETTER FOR I BONDS. ANOTHER THING CAN I SWITCH EE BONDS FOR I BONDS WITHOUT IT GOING TOWARD THE 5000.00 LIMIT? THANKS TOM YOUR WEB SITE IS GREAT!
Richard - no, you can’t switch between EE and I. If inflation continues at its current rate and if interest rates stay low, then I bonds will earn more even with a 0% fixed rate. However, those are two big ifs. Your guess about what happens in those areas is as good as mine.
Tom Adams
Tom,
We have 5 $10k bank cd’s that just came due (4 Oct 08). We are retired and have sufficient income to live comfortably without touching this $50K, but want it to be entirely safe. Is it a good time to buy I bonds? When is the best time to buy and in what denominations? Thanks for your comments.
Dave White
Dave - The FDIC insurance on your bank CDs and Savings Bonds are both guaranteed by the U.S. government, so I don’t see much difference in terms of safety at these amounts.
Meanwhile, the Treasury changed the Savings Bond program in January so that your maximum annual investment can only be $5,000. There are ways to increase this, but not up to $50K.
Tom Adams