Investing Blog Roundup: I Bond Interest Confusion � Investors Happy

Investing Blog Roundup: I Bond Interest Confusion

A reader wrote in, wanting to share this experience in case it�s helpful to anybody else who has recently purchased I Bonds for the first time.

�I purchased $10K worth of I-Bonds for the first time in 2022, specifically on July 1st, when the annualized interest rate was 9.62%. Funds left my bank account on that same day, July 1st. Fast forward to mid-January; using straight-line logic, I�m expecting to see $481 posted into the account, perhaps a few bucks less, but only associated with timing issues. I didn�t expect to see only $236 posted (???) Could not work the math, any which way.

Called the Treasury Department, waited almost two hours on hold before talking to a human being. The Rep was fabulous to deal with � polite, professional, and knowledgeable � but the two hours on hold was brutal. He assured me that I HAD earned the full interest, but shared with me that Treasury does not actually post the interest accrued into the account, even if only for viewing purposes, due to the �3 month penalty� rule for holding the security for less than 5 years. According to the Rep, this is on a rolling calendar basis and the most current 3 months of interest will NEVER show in the account, until the �held for 5 years� criteria is met. The owner will never see the full interest accrual until year 5.�