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The way to buy Series I savings bonds via TreasuryDirect

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There’s been record demand for federal Series I savings bonds, an inflation-protected and nearly risk-free asset, offering an eye-popping 9.62% annual return through October.

Nevertheless, it’s challenging to purchase I bonds through TreasuryDirect, a 20-year-old platform run by the U.S. Department of the Treasury, financial advisors say. 

“It’s like going to the DMV online,” said Matt Stephens, an authorized financial planner with AdvicePoint in Wilmington, North Carolina, explaining how the strategy of buying I bonds is very difficult for his older clients.

Inflation is driving up demand for I bonds

I bond interest has two parts, a set rate and variable rate, adjusting every six months based on the Consumer Price Index, a key measure of inflation.

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Because the annual rate jumped to 7.12% in November, 1.85 million latest savings bond accounts have been opened through June 24, in keeping with a Treasury official. 

“We’re committed to making sure that TreasuryDirect users have a positive customer experience,” a Treasury spokesperson said, highlighting recent changes, akin to shifted resources, hiring temporary staff and website and phone support improvements.

“We’re also within the strategy of developing an updated, modern substitute for the present TreasuryDirect system,” they added.

The way to purchase I bonds

There are two ways to purchase I bonds. You may buy them electronically via TreasuryDirect, with a person limit of $10,000 per person per calendar 12 months. It’s also possible to buy them in paper form together with your federal tax refund, enabling one other $5,000 purchase per person. 

Before buying electronic I bonds, you’ll have to open a TreasuryDirect account by providing your tax ID number, email address and banking details.

The password log-in page at TreasuryDirect.gov.

CNBC.com

Nevertheless, you will need to maintain your account number and password secure, as multiple failed attempts may lock your account. This requires a call to customer support, which is currently experiencing “higher than usual call volume,” in keeping with the web site.

One other possible hiccup: You may’t depend on some password managers to autofill your credentials since a part of the login requires you to type the password on a virtual keyboard together with your cursor.

Some accounts need additional identity verification

Tommy Blackburn, a Richmond, Virginia-based CFP and senior financial planner at Mason and Associates who steadily helps clients purchase I bonds, said one in all the foremost pain points is additional identity verification.

It could be very difficult obtaining the signature guarantee from major financial institutions and native ones.

Tommy Blackburn

senior financial planner at Mason and Associates

In some cases, investors must fill out an account authorization form to forestall fraud, in keeping with a Treasury official. This requires signing the shape at a bank or credit union, notated with a “signature guarantee,” before mailing it back.

“In our experience, it might be very difficult obtaining the signature guarantee from major financial institutions and native ones,” Blackburn said. Nevertheless, a Treasury official said they’re working to expand certification to any notary public. 

There are extra steps to alter checking account details

There’s the same process for updating banking details for TreasuryDirect, requiring a bank change request form, explained Ken Tumin, founder and editor of DepositAccounts.com, who recently went through the method. 

When opening a TreasuryDirect account, “you certainly need to select a checking account that you simply plan to take care of and keep long-term,” Tumin suggested. 

I bonds aren’t right for all investors 

While the present I bond rate could also be appealing, it is vital to think about whether these assets align together with your goals before purchasing, experts say.

There are relatively low purchase limits, with a number of exceptions, and no access to the funds for one 12 months, making it suitable as a “complement to your emergency fund,” Stephens said. 

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