Treasury Direct Account

MMANT

How do I set up a Treasury Direct online account in quicken windows?

NotACPA

Until the US Treasury signs the contract with Q/Intuit, you won't be able to download into this account.

SO, just set it up as a manual/offline brokerage account.

NotACPA

Until the US Treasury signs the contract with Q/Intuit, you won't be able to download into this account.

SO, just set it up as a manual/offline brokerage account.

Rocket J Squirrel

@NotACPA 's answer is correct, so, if I may, I'd like to broaden this discussion.

I recently opened a Treasury Direct account. I had heard that I-Bonds were paying 7%, a pretty good return for a safe bond.

But it turns out that rate is only guaranteed for 6 months, one must hold the bonds for 12 months, and the maximum investment is only $10,000. So at best, the investor might earn $700 over the course of 12 months.

It hardly seems worth the effort.

What are other Treasury Direct account holders investing in, and is it worth it to you?

Ps56k2

Rocket J Squirrel said: What are other Treasury Direct account holders investing in, and is it worth it to you?

you might find more insight over on the financial Bogleheads forum - mostly anchored in Vanguard discussions

http://www.bogleheads.org/forum/

NotACPA

@Rocket J Squirrel Actually, to get that $700, you'd have to receive the 7% rate for the entire year.  For the 6 month guaranteed rate you'll earn $350.

SO, how does the rate adjust, what does it adjust to, what's the "current" 7-12 month rate?

Without looking up those rates, I suspect that your total return will be closer to $400.

Rocket J Squirrel

NotACPA said:

@Rocket J Squirrel Actually, to get that $700, you'd have to receive the 7% rate for the entire year.  For the 6 month guaranteed rate you'll earn $350.

I know. But people on the Fido Investor Community were so excited when they saw 7% that I had to take a look. This is one case where you want inflation to stay high for the full term of the bond. But in absolute dollars, the return is so small, it hardly seems worth the effort.

Rocket J Squirrel

You can actually buy $15k worth of I bonds, but only if you get an income tax refund. Total you can get is $10k electronically via TreasuryDirect and $5k in paper, yes paper, bonds but only if you buy that using your tax refund. Who but the government could come up with such a scheme. I'm not expecting a refund this year.

https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_ibuy.htm

thebenskys

I'm quoting from Allan Roth (WealthLogic) on an AARP website last month, https://www.aarp.org/money/investing/info-2021/why-buy-i-bonds.html

"If you want to earn a risk-free return and protect against the possibility of future high inflation, then I Bonds may be right for you. When something looks too good to be true, most of the time it is. But occasionally, something checks out, and I put I Bonds in this rare category today.

"I Bonds are inflation-protected savings bonds, issued and guaranteed by the United States Treasury. Because of the recent high inflation, I Bonds purchased before the end of April 2022 will yield 7.12 percent for the next six months. If inflation stays high, so will the yield.

"You don’t have to hold I Bonds for 30 years. You do have to hold them for one year. If you hold your I Bond for one year and fewer than five years and you redeem your I Bond, you’ll get dinged with a small penalty of three months’ interest. You can redeem after five years with no penalty.

"The worst-case scenario if you buy before the end of April is that inflation is zero over the second six-month period. If you redeem at one year, you’ll earn an annualized rate of 3.56 percent. That’s far better than any government-guaranteed savings rate around. And that zero percent inflation rate is unlikely. If we hit double-digit inflation, you will get a double-digit return."

I personally don't think inflation will ease significantly until much later this year, when the Fed rate increases have kicked in and some repairs have been effected to supply chains. My spouse and I each opened our own Treasury Direct accounts and bought I Bonds with each other as beneficiaries. That appears to in effect maximize the annual maximum purchase to $20,000. A year from now we'll see where inflation is going before we decided if we will buy more.