Barriers To Buying
US citizens, residents and government employees can purchase up to $10,000 in I Bonds per calendar year electronically from the notoriously wonky Treasury website. Those who use their federal income tax refunds may purchase an additional $5,000 in paper form, which would bring the annual limit to $15,000.
There are ways around the limit, up to a point. The bonds can be purchased for spouses and children too, and Treasury also lets people purchase them for trusts and estates.
Even so, the limits have made I bonds less compelling to some wealthier clients of Laura Mattia, chief executive of Sarasota, Florida-based Atlas Fiduciary Financial. Clients with million-dollar portfolios and above don’t see much of an appeal, she said. At the same time, Mattia notes that many investors already have a good chunk of their retirement savings stashed away in 401(k)s and IRAs. And those with limited cash shouldn’t use it on I bonds, she said, because purchasers must hold on to their bonds for at least a year. Those who exit before five years lose three months of interest.
Technical Issues Loom
Pepper has been working with many clients to set up I bond strategies, and “part of that strategy is navigating that extremely clunky website,” he said.
Visitors may be wary of giving financial information (let alone funds) to such a vintage-looking website. It works, but kinks abound.
Beyond having a dated look, the website doesn’t work with password managers and requires customers to click in their password with a mouse. Much more time consuming: Some hopeful purchasers receive messages that they need to provide additional identity verification to buy the bonds.
“I hold my breath every time I’m on the website setting up an account with a client,” Pepper said.
A few clients end up having to fill out and print a paper account authorization form and have it signed at a financial institution with a signature-guaranteed seal or stamp. This can usually happen at a bank or credit union. But Pepper said it can add weeks to the process of buying the bonds.
The only silver lining for those caught in this limbo: The rate will stay the same through October.
This article was provided by Bloomberg News.