So many investors are eager to buy the I Bonds, which pay 9.62% interest if purchased by Oct. 28, that the Treasury Department said its overloaded website could not complete all orders in time.
The government’s TreasuryDirect site, the only place where investors can directly buy securities such as I Bonds and Treasury bonds, became one of the most visited federal sites on the Internet this week, officials said, and experienced intermittent outages. From November 1, the interest rate on I Bonds is expected to fall to approximately 6.47%.
Safe, stable inflation-adjusted Series I savings bonds are underinvestment attention in most years. They were the biggest stars of 2022 as inflation hit a four-decade high, markets crashed and investors looked for a safe place to stash their money.
In the last week of October, the Treasury issued a total of $1.95 billion in Notes I for fiscal year 2021. In just one year, 3.7 million new accounts were created on the site, up from 2.4 million for the previous period. 10 years together.
“The popularity of I Bonds shows that people want to throw everything they can at a problem like inflation,” said Kelly Klingaman, a financial planner in Austin.
I The interest rate on bonds is recalculated every six months. The I Bond interest rate is based on a calculation linked to the consumer price index. According to the Bureau of Labor Statistics, the overall CPI rose 8.2% in September compared to the same month a year ago. I Bonds have a cap of $10,000 per year per person, but there are some strategies to get around that limit.
According to the TreasuryDirect website, investors must complete purchases and receive a confirmation email by Oct. 28 to ensure they will receive the 9.62% rate.
A spokesman for the Treasury Department said the Treasury has doubled its server capacity to accommodate the outages. The spokesperson said the system experienced some slow moments and was unavailable for a short period of time.
People continue to have trouble logging in and out of the site.
“Due to unprecedented requests for new accounts, we cannot guarantee that customers will be able to complete the purchase at the current rate of 9.62% by the October 28 deadline. The TreasuryDirect system has processed and continues to process completed payments,” the spokesperson said.
If the customer receives confirmation that their purchase has been made or completed, then the payment will be processed, the spokesperson said.
This is not the first time the website has crashed due to high I Bond demand. The TreasuryDirect website went down on May 3, a day after the 9.62% rate was announced.
Users regularly take to social media to complain about the TreasuryDirect website and sometimes go to great lengths to make I Bond purchases.
“The TreasuryDirect website is not known for being user-friendly,” said Elliot Pepper, a financial planner in Baltimore.
On Tuesday night, Mr. Pepper was working with a client to open custodial accounts and buy more I Bonds before the exchange rate changed, and he said he was kicked off the website twice for no reason. Eventually, they were able to open accounts and buy I Bonds, but at the time it was pretty stressful, he said.
Still, as long as people are comfortable with a 12-month lock-in period, I Bonds are a great place to put cash already, he said.
I No federal taxes are withheld during the term of the bond. Although investors benefit from compounding interest every six months, they pay no federal taxes until they actually cash the bonds.
In addition, there are no state or local taxes on interest earned, a big benefit for investors in high-tax states, Mr. Pepper said.
As of September of this year, more than $22.3 billion in Bond I was purchased on the Treasury Department’s website.
Bipartisan legislation was also introduced In September, the Senate will raise the purchase limit to $30,000 per person if the CPI is above 3.5% annually for six months or more.
I Bonds’ yields far exceed cash, and bonds are attractive to investors seeking a higher rate of return without stock market risk.
—Richard Rubin contributed to this article
Write to Veronica Dagher at Veronica.Dagher@wsj.com
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