Investors’ Positive Response to Rate Increase Causes Overload on TreasuryDirect Website
- Shams ul Zoha
- October 27, 2022
- 7:54 pm
WHAT YOU SHOULD KNOW
- The Treasury Department website was overwhelmed with buyers on Wednesday, leading to a crash due to the high demand for Series I savings bonds paying 9.62% interest.
- The deadline to receive the guaranteed 9.62% rate is Friday, so a rush of buyers was expected.
- Individuals looking to purchase Series I Savings Bonds may do so up to the amount of $10,000 per year.
The Treasury Department website was overwhelmed with buyers on Wednesday, leading to a crash due to the high demand for Series I savings bonds paying 9.62% interest. The deadline to receive the guaranteed 9.62% rate is Friday, so a rush of buyers was expected.
The US Treasury Department has informed customers that they must complete their transaction and lock in the rate before 11:59:59 p.m. Eastern time on Friday. Failure to do so will result in a missed opportunity.
The Treasury’s sale of $1.95 billion in I Bonds in the last week of October was unprecedented, surpassing the total amount issued for the entire 2021 fiscal year. This surge in sales is likely due to the impending decrease in the I Bond interest rate to 6.47% on November 1. Additionally, the Wall Street Journal reported that over the past year, there were 3.7 million new I Bond accounts opened, exceeding the total of 2.4 million accounts opened in the previous decade.
Due to the recent surge in inflation, many prospective savers have been flocking to the TreasuryDirect website to purchase Series I Savings Bonds. The bonds offer a fixed rate of interest as well as an inflation-linked rate, and the announcement of a 9.62% rate earlier this month has been the highest since 1981, when inflation reached its peak of 13.58%. This has caused the website to crash due to the influx of buyers.
At the start of May and November, the Treasury Department announces the fixed rate of return and the semiannual inflation rate. The inflation rate fluctuates every six months, but the fixed rate remains the same throughout the 30-year bond period.
Individuals looking to purchase Series I Savings Bonds may do so up to the amount of $10,000 per year.
Additionally, it is possible to increase this amount by buying an additional $5,000 worth of paper I bonds with your federal tax refund. However, it is important to be mindful of the amount you are purchasing, as any overage will result in a refund, which can take up to 16 weeks to process.
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