Personal Investments • is it possible to have split beneficiaries with Treasury Direct I-Bonds

Each year, I purchase one $5K bond and five $1K bonds to give me flexibility on when to redeem the bonds cleanly.

Unlike with paper bonds, which must be redeemed in full, you can do partial redemptions in TreasuryDirect, minimum $25 (e.g. withdraw $100 out of a $1000 I Bond and leave the rest to continue growing).

The only reason to split up simultaneous purchases is if you want to assign different beneficiaries to different portions of your purchase. Otherwise, you actually have more flexibility and more simplicity with one large bond (since you can't leave less than $25 in a bond after redemption).

If you know that and are just in favor of having nice round numbers in your account view, that's okay too. I'm guilty of that as well.

Stumbled upon this as I debated whether to purchase my first single $10k I Bond this weekend. For some reason I've had a hang-up about buying one $10k bond, so I always purchased two $5k bonds with the same issue date. But it wasn't to assign different beneficiaries, so much as nostalgia for the old days. My dad used to purchase dozens of paper I Bonds in small $500 denominations, which I later inherited and converted to electronic bonds. Over time I adopted this self-imposed rule that my own purchases would all be amounts between $2k and $5k in order to keep a "clean" view of 4-digit I Bond holdings in my account view. This would also give me flexibility to assign different beneficiaries to individual bonds later.

However, I decided to break my own rule and bought a single $10k I Bond this year. The current fixed rate is historically attractive enough that if I hold the bond to maturity, it's easier to keep track of a single $10k investment. Moreover, it's easy to redeem a partial amount that keeps the principal value of the bond an even multiple of $1,000 (just divide the current value of the $10k bond by 2, 5 or 10 when choosing your redemption amount).

Lastly, I just learned that you can always split a single $10k I Bond into two separate $5k bonds later by transferring the bond to your conversion linked account and then back to your main account holdings in Treasury Direct. This article is very helpful: https://thefinancebuff.com/split-saving ... aries.html

I might go this route if I ever change my mind and decide I want separate beneficiaries or to keep my holdings in smaller denominations.

Statistics: Posted by sparsam — Mon Apr 29, 2024 7:56 am — Replies 17 — Views 1715

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