Hi, Sonki,
I've only bought I-Bonds via the website. It's a bit of a hassle (less so with Internet Explorer's "AutoComplete"), as you can only buy $500 at a time. The purchase is not a cash advance, it's a regular credit card purchase. So, if you use a card that gives you a bonus for purchases, you're that much better off. Also, the best time to buy is after your credit card cycle closes, as I-Bonds pay from the beginning of the month regardless of when they're bought. (But you have to be careful, because if you buy too near the very end of the month, the purchase may not go through until the next month. With my card, I've found it takes only 2 business days to get payment, so as long as I buy before about the 28th or so, I'm safe.)
I'm not a tax expert, but I'm about 99.9% certain that the gain from selling these is ordinary income, regardless of how long they're held. They are free from state & local taxes, and the tax can be deferred for up to 30 years (by not cashing them in, that is), but there's no cap gains benefit, AFAIK.
Too late for I-Bonds? I don't think this is a purchase that really needs to be timed. You just need to decide if it's the right type of instrument to include in your asset mix.
For an EXCELLENT, detailed FAQ on I-Bonds, go to:
socialize.morningstar.com
click on Fund Forum "Vanguard Diehards", and enter 6316 in the "Jump to #" box. This will take you to the conversation titled "Updated I Bond Tutorial".
Ken |
