Wise advice: ‘Don’t die with I Bonds’

Posted on September 6, 2026 by Tipswatch

Avoid creating a complex, frustrating estate process.

AI-generated image. Perchance.org

By David Enna, Tipswatch.com

TreasuryDirect, the only source for buying and holding Series I Savings Bonds, is having quite a moment: Its customers, after years of contending with mediocre service, are enraged by the Treasury’s decision to move very quickly to a new login verification system through a private company, ID.me.

Read about that here: “TreasuryDirect is launching a controversial login system.”

But that isn’t the point of this article. Here is my message today: It makes absolutely no sense to hold I Bonds until death. The reason? Your surviving beneficiaries or estate will face months, maybe even years, of delays in distributing the account assets. Plus they may have to deal with multiple forms (long processing times) and required medallion signature guarantees (nearly impossible to get at most banks).

This is not a new issue, but it gets more pressing because we all are aging. Admit it!

I am hearing from a lot of readers who are planning to redeem or transfer all holdings at TreasuryDirect because of the ID.me transition. I am not recommending that, but I am recommending that you have a plan to exit TreasuryDirect before you die. (If that is at all possible.)

I am not an expert on this topic and have never had to deal with the death of an account holder. But I am sure many of you have, and I hope you will contribute advice in the comments section below.

A tangled bureaucracy

I have a friend who is executor for a relative’s estate. The relative, who recently died in her 90s, had a fairly large amount of converted I Bonds from 2000 and 2001, which have more than quadrupled in value.

The executor had access to the TreasuryDirect account, but had questions. She called TreasuryDirect and asked, “Can you tell me if these I Bonds have a co-owners or beneficiaries?” The answer: “No, I cannot answer that.” And then TreasuryDirect immediately locked the account, as is its standard practice after a death. This is noted here: “Death of a savings bond owner.”

TreasuryDirect does not allow joint accounts, but it does allow “co-ownership” of savings bonds. That should make things easier for a surviving spouse. TreasuryDirect says:

If a surviving co-owner or beneficiary is named on the savings bond, the bond goes directly to that person. It does not become part of the estate of the person who died.

But the actual advice is “contact us” and not much else.

See more here: “Inheriting savings bonds as a named co-owner or beneficiary“

Question: I would love to hear feedback from surviving co-owners on how this process worked. Were there delays? Multiple forms to fill out? Or could you simply continue to maintain or transfer that account to your own, with little hassle? If so, there is no pressing need to redeem all I Bonds (even if you are at death’s door) if you have a co-owner who can take over the account with little complexity.

Sole owner: What happens next?

Let’s focus on the death of the sole owner of the savings bonds (which is the case when a co-owner died earlier). This most likely applies to my executor friend’s situation. She needs to know if the savings bonds had any beneficiaries, because that determines the next step.

Assuming there was no co-owner or beneficiary, TreasuryDirect will look to a state court to recognize the executor who will eventually be able to distribute or redeem the savings bonds. This triggers automatically if the holdings exceeded $100,000, as was the case for my friend. (Also, my friend believes there were no named beneficiaries on these converted I Bonds, but isn’t sure since Treasury Direct will not tell her if there are beneficiaries without opening a “case” which could take up to 10 months to get the answer.)

The executor will need a death certificate, plus a court-issued “Letter of Testamentary” that certifies this person has been named executor of the estate. Those forms must be sent to TreasuryDirect, which will then consider allowing the executor to control the assets. Other forms may be needed, including these:

  • Form 1455, Request by Fiduciary for Distribution.
  • Form 5512, Redemption and/or Bank Change Request
  • Form 5511, Transfer Request, for distribution to beneficiaries.

The forms may say “notary certification is NOT acceptable,” but it appears that TreasuryDirect may be willing to waive that requirement, since medallion signature guarantees are very difficult to achieve. More on this.

The process of reviewing these forms can take up to 10 months.

Every single stage of this process can take months. If the executor decides to redeem the I Bonds inside the estate, that decision could take months. And then the eventual distribution of assets to a matching estate account outside TreasuryDirect could take additional months.

Delays are also likely if the savings bonds are going to a beneficiary, as detailed in this article at MyMoneyBlog.com, “TreasuryDirect Customer Service Delays and Estate Planning Concerns“:

My dad’s I bonds were transferred to me around the 4-5 month mark.

After that experience, I decided to liquidate all of my TD accounts, and will encourage my husband to do the same. I personally don’t want a repeat of this experience, or make my heirs go through such a lengthy process in resolving my estate.

What I learned from this experience is to not discount how much stress and mental bandwidth it takes to deal with TD when you’re also grieving the loss of a family member, and trying to settle the estate so you can move on financially.

A similar story was told in an October 2024 Bogleheads post:

An ongoing horror story. Learn something from this. Please don’t do this to your family. My sister passed away in April 2024. While going through her papers, we found a business card with an account number for Treasury Direct. (TD) Since there is no paper trail, it was a piece of luck that we found the card and then found the account.

We completed paperwork in July. We called TD and was told that everything we needed to file and created has been completed and that a TD auditor would review our claim. We were told the timeline would be about a year. …

So here we are in October 2024; six months later. We call TD monthly just to log a call. We still don’t know what’s in the account. We were hoping to close the estate by the end of the year. The TD account is the last item to be closed and TD is holding us up. Thanks to TD, we are looking at interest and penalties because we don’t have the information to file a final tax return.

In my friend’s case, she won’t have access to the relative’s account until TreasuryDirect receives and reviews the death certificate and Letter of Testamentary. And most likely she will never have actual “access” to the account. Once she is recognized as the executor, she could direct TreasuryDirect to redeem the I Bonds and deliver the proceeds to an estate account at a financial institution. But that could take months.

Eventually, the estate will owe taxes on that redemption. How much? She might know in early 2028 when 2027 taxes are filed, which means complete distribution of assets could take a very long time.

Plus, the addition of the ID.me verification layer could cause future problems in accessing account information, such as finding 1099s for 2026, to be issued in late January 2027.

Needless to say, there are only two investments a sole-owner elderly person should own at TreasuryDirect: 1) Savings bonds, because TreasuryDirect is the sole source, and 2) T-bills up to about 26 weeks, because those will mature and pay out. If you are elderly, don’t purchase Treasury Inflation-Protected Securities at TreasuryDirect. Do it at a brokerage to avoid potential estate hassles.

The I Bond strategy

My advice for TIPS is to hold to maturity, if at all possible. TIPS can be held in a tax-deferred account, with a beneficiary, or in a taxable account, where taxes are kept current on the inflation accruals. There is no big deal — tax-wise — at maturity.

This isn’t the case with I Bonds. No I Bond has ever matured; that process will begin in 2028 and beyond. There is no overriding reason to hold I Bonds to maturity. I Bonds are a cash-equivalent investment and should be redeemed when you need the money. They can never go down in value. When the time comes, cash in and enjoy life.

The ideal holding period for an I Bond is 5+ years until … you need the money.

What about taxes?

My recommendation is going to be difficult to hear: If you are a sole owner of savings bonds at TreasuryDirect and know your life is nearing an end, immediately redeem every holding and transfer the money out of TreasuryDirect. You will then be responsible for the taxes owed on the interest, to be paid when your executor files that return in the next year. Your estate and heirs will get less money, but will be free of that tax burden and the lingering hassle of TreasuryDirect after death.

I am NOT a tax expert and I am sure many readers know more about this than I do. Here is what the IRS says for savings bonds with accrued interest collected over years:

If the bonds transferred because of death were owned by a cash method taxpayer who chose not to report the interest each year and had purchased the bonds entirely with personal funds, interest earned before death must be reported in one of the following ways.

  1. The person (executor, administrator, etc.) who is required to file the decedent’s final income tax return can elect to include all of the interest earned on the bonds before the decedent’s death on the return. The transferee (estate or beneficiary) then includes only the interest earned after the date of death on its return.
  2. If the election in (1) above wasn’t made, the interest earned to the date of death is income in respect of the decedent and isn’t included on the decedent’s final return. In this case, all of the interest earned before and after the decedent’s death is income to the transferee (estate or beneficiary). A transferee who uses the cash method of accounting and who has chosen not to report the interest annually may defer reporting any of it as income until the bonds are either cashed or reach the date of maturity, whichever is earlier. In the year the interest is reported, the transferee may claim a deduction for any federal estate tax paid that arose because of the part of interest (if any) included in the decedent’s estate.

The IRS includes a few examples on that page, but I think the core is this:

  1. The executor can include interest earned up to the date of death on the sole owner’s tax return, and in that case the beneficiary (or the estate) will pay taxes on interest earned after the date of death.
  2. Or if not option 1, then the person (or the estate) receiving the savings bonds will accept the full tax burden at redemption, which could be sizable.
  3. A variation on option 1 is for the executor to have TreasuryDirect redeem all the savings bonds, deliver the cash to a related estate account, reserve money for future taxes on tax returns for the sole owner and estate, and … eventually … deliver the remaining cash to beneficiaries. That will take time, but the estate will carry the tax load.

I suspect CPAs could argue about this for hours.

The better option: Redeem all I Bonds before the sole owner’s death.

I am sure many of you have different opinions. My expertise in this area is extremely limited. I believe I have only scratched the surface of these difficult issues. Please share your thoughts.

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Donate? This site is free and I hope to keep it that way. Some readers have suggested having a way to contribute. I welcome donations, any amount. And FYI, ads on this site pay for about one visit to Costco.

PayPal link / Venmo link

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Follow Tipswatch on X for updates on daily Treasury auctions and real yield trends (when I am not traveling).

Feel free to post comments or questions below. If it is your first-ever comment, it will have to wait for moderation. After that, your comments will automatically appear. Please stay on topic and avoid political tirades. NOTE: Comment threads can only be three responses deep. If you see that you cannot respond, create a new comment and reference the topic.

David Enna is a financial journalist, not a financial adviser. He is not selling or profiting from any investment discussed. I Bonds and TIPS are not “get rich” investments; they are best used for capital preservation and inflation protection. They can be purchased through the Treasury or other providers without fees, commissions or carrying charges. Please do your own research before investing.

Posted in Cash alternatives, EE Bonds, Estate planning, I Bond, Taxes | 53 Comments

Schwab analysts weigh in on bond-market disruptions

Posted on August 30, 2026 by Tipswatch

By David Enna, Tipswatch.com

I am posting this Schwab podcast as an add-on to my Friday article, “Secretary Bessent, take note: Treasury yields are not ‘too high’.”

Note that the podcast focuses on Bessent’s actions and the bond market’s reaction. It was recorded before Kevin Warsh spoke Friday in Jackson Hole.

The podcast was recorded Wednesday and posted Friday. It reinforces several of the ideas I presented in my Friday article. A few excerpts:

Collin Martin, Schwab’s head of fixed income research and strategy:

So what Bessent is proposing is an increase in the size of the liquidity buyback operations that are already underway. But it seems like the increase in the buyback operation is less about managing liquidity and more about the Treasury just trying to buy more bonds in an attempt to lower yields. …

Is a fix even necessary? So the question is, are yields high? If we look at the last 15 years or so or 16 years, yes, they are high. You know, the 30-year Treasury yield touched 5.3%. That’s, I think, what probably resulted in the intervention. The 10-year Treasury yield has been touching 4.7% for the past few weeks. That’s high relative to the past handful of years. It’s not high relative to history. …

The real fix, if we want to really rein in Treasury yields, a lot of it comes down to fiscal issues. And that doesn’t appear to be anything that either side of the aisle wants to address. … That’s not something that Bessent can fix. That’s something that Congress needs to fix.

Liz Ann Sonders, Schwab’s chief investment strategist:

Doesn’t this throw a wrinkle into the way the Fed needs to think about their monetary policy? … Is the Treasury now doing something that’s a bit at odds with what the Fed’s goals are?

Martin:

There’s been a discussion first with the Fed about a potential credibility issue. And I don’t think we’re there yet, because we know that there’s members that think they might need to hike rates to bring inflation in. But if the data say the Fed should hike, and it doesn’t, I think the Fed risks losing credibility. …

And if the markets think that Treasury is losing credibility, if they’re doing this kind of as a rash decision … then there is a Treasury credibility issue. And do long-term yields rise because investors need to demand or want higher yields to compensate for all that uncertainty?

…. Give it a listen.

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Donate? This site is free and I hope to keep it that way. Some readers have suggested having a way to contribute. I welcome donations, any amount. And FYI, ads on this site pay for about one visit to Costco.

PayPal link / Venmo link

—————————

Follow Tipswatch on X for updates on daily Treasury auctions and real yield trends (when I am not traveling).

Feel free to post comments or questions below. If it is your first-ever comment, it will have to wait for moderation. After that, your comments will automatically appear. Please stay on topic and avoid political tirades. NOTE: Comment threads can only be three responses deep. If you see that you cannot respond, create a new comment and reference the topic.

David Enna is a financial journalist, not a financial adviser. He is not selling or profiting from any investment discussed. I Bonds and TIPS are not “get rich” investments; they are best used for capital preservation and inflation protection. They can be purchased through the Treasury or other providers without fees, commissions or carrying charges. Please do your own research before investing.

Posted in Federal Reserve, Inflation, Tariffs | Tagged , , , , , , | 18 Comments

Secretary Bessent, take note: Treasury yields are not ‘too high’

Posted on August 28, 2026 by Tipswatch

Plus: Reaction to Kevin Warsh’s speech at Jackson Hole.

By David Enna, Tipswatch.com

A week ago, Treasury Secretary Scott Bessent announced plans to double the Treasury’s buy-back of long-term U.S. debt, up from $2 billion to $4 billion a week through the fall. And bigger buy-backs could be coming.

Bessent

The announcement, coming one day before the Treasury’s auction of a reopened 30-year TIPS, managed to drop long-term yields by 9 or 10 basis points. The effect lasted a few hours. The market quickly noticed the “drop in the bucket” amount and moved yields higher.

Why would the Treasury do this? In my opinion, it was an attempt to shift borrowing costs from the long-term (5.18%) to short-term (3.80%) to help the U.S. finance a massive (and fast-growing) federal deficit. The fiscal 2025 federal deficit was $1.75 trillion and that will grow to about $1.9 trillion in fiscal 2026.

And, in theory, the buy-backs could nudge long-term yields a bit lower, a long-time goal of the Trump administration.

This led to a savage analysis from renowned investor Stanley Druckenmiller in a Wall Street Journal op-ed titled, “Let the Bond Market Speak.” (Gift link.) Druckenmiller, it should be noted, has been a mentor to both Bessent and Federal Reserve Chairman Kevin Warsh. I advise reading the entire op-ed, but here are some excerpts:

The market’s verdict was swift and correct: This wasn’t liquidity management, it was price management—and a mistake far larger than $4 billion suggests. …

Inflation is 3% to 4% and has been above the Fed’s target since 2021. Unemployment is 4.1%, full employment by any definition. The deficit is running near 6% of gross domestic product, a number America has never before produced in peacetime at full employment. The national debt crossed $40 trillion the same week Treasury intervened. Net interest will exceed $1.1 trillion this fiscal year, more than the defense budget. …

The long-term Treasury yield is the most important price in the world. It is also the only fiscal disciplinarian the U.S. has left. …

Governments defending prices against fundamentals always lose. The only variable is how much they spend before conceding. The U.S. shouldn’t put itself on the wrong side of that trade.

Please, no more manipulation

I started writing Tipswatch in March 2011, just before the Federal Reserve launched into a decade of on-and-off bond-buying known as quantitative easing. QE is outright bond-market manipulation. This is not a conspiracy theory; it is the admitted goal of QE — to force interest rates down (and spur the economy higher).

What was the effect of this QE? It pushed real yields deeply negative and nominal yields down to as low as 0.52% on the 10-year note in August 2020. This manipulation, combined with supply shortages, lavish government spending, and generous U.S. stimulus checks, sent U.S. inflation soaring to a 40-year high less than two years later.

Here is the trend in the 10-year nominal yield over the last 56 years.

Click on image for larger version.

Note that the current 10-year yield of around 4.7% is actually historically low, if you remove the decade of quantitative easing. To make this perfectly clear, I created these charts of 5-, 10-and 30-year nominal yields removing the decade-plus of QE manipulation:

Click on the images for a larger version.

These three charts demonstrate that the mid-2026 longer-term nominal yields are solidly in the “normal” range, especially at a time of eternally increasing federal deficits, along with a relatively solid U.S. economy and strong demand for corporate financing for the AI buildout.

This is not the time for the Treasury to interfere, unless the real motive is to lower U.S. borrowing costs to pay for even higher deficit spending.

As a side note, Bessent’s move struck at the world’s confidence in the U.S. dollar, with the dollar index losing about 0.5% of its value since Aug. 18. More significantly, the buy-back announcement caused a surge in alternative currencies like Bitcoin, up 24% since Aug. 18.

If anyone wants to offer a conspiracy theory on this, I am willing to listen.

Is inflation a factor?

Certainly. Those very high interest rates of the 1980s brought the pain needed to bring down exceptionally high inflation after the oil shock of 1973. Annual U.S. inflation rose to 13.5% in 1980. The high interest rates imposed by Fed Chairman Paul Volcker (he took that role in late 1979) broke the inflation trend, with the annual rate falling to 3.2% by 1983. Here is the trend in July-to-July annual inflation from 1971 to 2026:

The main point of this chart is to show that today’s annual inflation rate of 3.4% is certainly not “low” and the bond market reflects this in the cost of borrowing.

Chairman Warsh’s dilemma

At his last news conference on July 25, Fed Chairman Kevin Warsh said he wants to limit the Fed’s forward guidance and let the financial markets set the way. He said:

Monetary policy matters not just by what we say or even what we do; monetary policy matters by how it affects the real economy. And these prices that we see in financial markets is one of the many ways in which it affects the real economy. We’ll be continuing to watch that market information, see how it responds to incoming events, and that can help inform our decision-making when we meet in seven or eight weeks. …

I was comforted that markets in the inter-meeting period weren’t reacting to us. They weren’t reacting to dots or to speeches. They appeared more than ever to be reacting to real-time events.

Warsh also wants to reduce the Fed’s balance sheet built through years of aggressive QE, and that means the Treasury buy-backs are working in the opposite direction from his goal.

The problem for Warsh is that Bessent’s initiative came without any actual “market” justification, except to benefit the Treasury by moving borrowing costs to lower-yielding T-bills, where the Federal Reserve has control over rates.

And there is the problem. Is Warsh now facing pressure to hold short-term rates stable, or even to lower them, to accommodate the Treasury’s gambit? From a Reuters report today:

Many investors say Bessent is fighting the wrong fight. They say strong growth, sticky inflation, likely Fed hikes and heavy bond supply, including from AI-driven corporate borrowing, are what’s pushing yields up, along with a widening fiscal premium tied to the deficit — ⁠not market dysfunction. …

Warsh has long criticized the Fed’s large-scale asset purchases, arguing such interventions should be reserved for genuine market dysfunction, ​with rate policy driving the employment and inflation mandates.

Update: Warsh at Jackson Hole

I just finished watching Kevin Warsh speaking at the Jackson Hole Economic Policy Symposium. My immediate reaction was that this was a good speech: somewhat specific, somewhat hawkish, and a strong statement that fighting inflation is the priority. Read the full text here.

For example, Warsh was very specific about the Fed’s favored measure of inflation (as opposed to his past attractions to alternative measures):

The Fed’s price-stability objective of 2 percent, as measured by the personal consumption expenditures (PCE) price index, is a firm, fixed target.” …

And he added this:

“The Fed’s preferred measure of inflation, the 12-month change in the PCE price index, stands at 3.7 percent, while the six-month change is 4.1 percent. … And while this summer’s PCE and CPI readings were better than expected, they do not tell me that underlying trends have meaningfully improved.”

And that the economy can handle higher interest rates:

Credit and loan markets are showing few signs of policy restraint. Certain sectors—like housing and agriculture—are showing strains. But, on balance, I would be hard pressed to describe broad financial conditions as restrictive.

Maybe I am reading too much into this, but did he give Bessent a soft slap in the face with this?

“Short-term interest rates are the predominant tool to achieve the dual mandate. Unconventional policies to spur economic activity may suit genuine crises but should otherwise be used sparingly, if at all.”

And concluded with this:

There is one signal nobody can miss: The responsibility for 65 months of sustained, elevated inflation sits squarely with the central bank. And that is where it belongs.

Here is my standard: We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do. That’s our job . . . our mandate . . . and our charge to keep.

If the stock and bond markets were looking for “future guidance,” they didn’t get it. But they did get the specific and strongly-stated goal of hitting the Fed’s inflation goal.

Conclusion

Even though longer-term Treasury yields are reaching 15- to 20-year highs, those yields can be considered “normal” if you remove 10-plus years of bond market manipulation by the Federal Reserve.

What Bessent is planning is not quantitative easing; it is shifting U.S. debt from long-term to short-term, and an attempt to nudge long-term yields down.

This is not the time for a new course of manipulation by the Treasury. It is the time for Congress and the president to get serious about reducing the upward trend in the federal deficit, whether by spending cuts, tax increases, or more probably … both.

And that won’t happen in 2026.

Also read: Federal Reserve is losing credibility, at the worst possible time

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Donate? This site is free and I hope to keep it that way. Some readers have suggested having a way to contribute. I welcome donations, any amount. And FYI, ads on this site pay for about one visit to Costco.

PayPal link / Venmo link

—————————

Follow Tipswatch on X for updates on daily Treasury auctions and real yield trends (when I am not traveling).

Feel free to post comments or questions below. If it is your first-ever comment, it will have to wait for moderation. After that, your comments will automatically appear. Please stay on topic and avoid political tirades. NOTE: Comment threads can only be three responses deep. If you see that you cannot respond, create a new comment and reference the topic.

David Enna is a financial journalist, not a financial adviser. He is not selling or profiting from any investment discussed. I Bonds and TIPS are not “get rich” investments; they are best used for capital preservation and inflation protection. They can be purchased through the Treasury or other providers without fees, commissions or carrying charges. Please do your own research before investing.

Posted in Federal Reserve, Inflation, Treasury Bills | Tagged , , | 24 Comments

30-year TIPS reopening gets real yield of 2.973%, highest in nearly 25 years

Posted on August 20, 2026 by Tipswatch

By David Enna, Tipswatch.com

The Treasury’s auction of $8 billion in a reopened 30-year TIPS, CUSIP 912810US5, generated a real yield to maturity of 2.973%, highest for this term since October 2001. While that’s historic, the real yield fell just shy of the 3% milestone, thanks to bond-market intervention by Treasury Secretary Scott Bessent.

Bessent on Wednesday announced the Treasury is doubling its buy-backs of long-term Treasurys, shifting the debt burden to short-term T-bills with much lower yields. That briefly pushed 30-year nominal and real yields down about 9 basis points. Yields recovered a bit Thursday morning as the bond market reacted with skepticism.

No 29- to 30-year TIPS has auctioned with a real yield of 3%+ since October 2001, when a 30-year, 6-month issue got a yield of 3.465%. Soon after, the Treasury suspended issuing 30-year TIPS until February 2010. Today’s real yield was the highest since the resumption of the 30-year.

Definition: The “real yield to maturity” of a TIPS is its yield above future U.S. inflation, over the term of the TIPS. So a real yield of 2.973% means an investment in this TIPS would provide a return that exceeds official U.S. inflation by 2.973% for 29 years, 6 months.

Real yields have been moving higher in 2026, mostly prompted by the inflation shock of the war in Iran, plus intensifying government and corporate borrowing needs. I call the surge a “self-inflicted wound,” as shown in this chart of 30-year real yields over the last two years:

Click on image for larger version.

Pricing

CUSIP 912810US5’s coupon rate of 2.375% was set at its originating auction on February 19, which resulted in a real yield to maturity of 2.473%. Because the real yield at today’s auction was dramatically higher, the unadjusted price was discounted to 88.317050, a remarkable fall in just 6 months. This TIPS will carry an inflation index of 1.03055 on the settlement date of August 31. With that information, we can calculate the cost of a $10,000 par value purchase at today’s auction:

  • Par value: $10,000.
  • Principal purchased on settlement date: $10,000 x 1.03055 =$10,305.50.
  • Cost of investment: $10,305.50 x 0.88317050 = $9,101.51.
  • + accrued interest of $10.64.

In summary, an investor purchasing $10,000 par value at this auction paid $9,101.51 for $10,305.50 of principal on the settlement date. From then on, the investor will earn accruals matching official future inflation, plus an annual coupon rate of 2.375% paid on inflation-adjusted principal.

Inflation breakeven rate

I was driving through the N.C. mountains at the auction’s close, so I will have to estimate the 30-year nominal bond yield at 5.23%, giving this TIPS an inflation breakeven rate of 2.26%, in line with recent trends. (I hope for our nation inflation averages only 2.26% over the next 30 years, but I am skeptical.)

Here is the trend in the 30-year inflation breakeven rate over the last two years showing the solid trend in the range of 2.20% to 2.30%:

Click on image for larger version.

Thoughts

Investors at today’s auction got cheated out of a few basis points through Bessent’s tilt at the long-term bond windmill. It amounted to about $2 billion a week in additional bond buying at the longer term, a drop in the ocean of debt. The immediate effect was to weaken the U.S. dollar, which is potentially inflationary. That’s why oil prices and bitcoin moved higher today.

Bessent’s move also puts pressure on Federal Reserve Chairman Kevin Warsh to hold short-term rates stable (or lower) for as long as possible, to allow the Treasury to refinance long-term debt at lower yields. Will Warsh play along?

My feeling is that investors at today’s auction got a very attractive long-term TIPS, especially if held to maturity. That amounts to a near-zero-risk return of 2.973% over inflation for nearly 30 years.

Here is a history of auctions of this term over the last 5 years:

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• Now is an ideal time to build a TIPS ladder

• Confused by TIPS? Read my Q&A on TIPS

• TIPS in depth: Understand the language

• TIPS on the secondary market: Things to consider

• TIPS investor: Don’t over-think the threat of deflation

• Upcoming schedule of TIPS auctions

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Donate? This site is free and I hope to keep it that way. Some readers have suggested having a way to contribute. I welcome donations, any amount. And FYI, ads on this site pay for about one visit to Costco.

PayPal link / Venmo link

—————————

Follow Tipswatch on X for updates on daily Treasury auctions and real yield trends (when I am not traveling).

Feel free to post comments or questions below. If it is your first-ever comment, it will have to wait for moderation. After that, your comments will automatically appear. Please stay on topic and avoid political tirades. NOTE: Comment threads can only be three responses deep. If you see that you cannot respond, create a new comment and reference the topic.

David Enna is a financial journalist, not a financial adviser. He is not selling or profiting from any investment discussed. I Bonds and TIPS are not “get rich” investments; they are best used for capital preservation and inflation protection. They can be purchased through the Treasury or other providers without fees, commissions or carrying charges. Please do your own research before investing.

Posted in Federal Reserve, Inflation, Investing in TIPS, Tariffs, TreasuryDirect | Tagged , , , , , , | 28 Comments

TreasuryDirect is launching a controversial login system

Posted on August 17, 2026 by Tipswatch

And it will be mandatory after October 28

By David Enna, Tipswatch.com

Over the weekend, TreasuryDirect began sending out emails alerting investors it is changing its login system to ID.me, a government-verified but somewhat controversial identity provider.

The new system will go live September 13 and will become mandatory October 28. This gives users 2 1/2 months to get set up on ID.me, a process that can be tedious, difficult and honestly, a little scary.

Some Tipswatch readers and Boglehead forum users are incensed by this change and some are threatening to withdraw all investments from TreasuryDirect, a process that would launch a time-consuming process for traditional Treasury investments and a nasty potential tax hit for redeemed savings bonds. Here are some of the comments, for and against:

Biometric data/facial recognition/fingerprint ID, whatever, stored in corporate or government computers, gives me the creeps. An invasion of privacy, and my wife and I have studiously avoided it. … If this is the going to be the only way to do online business with TreasuryDirect, we’re going to have to reconsider whether to remain I Bond customers.

I think this mandate may cause many savings bond holders to exit savings bonds. It could be TD’s intent to get rid of savings bonds.

To me, this will be a simpler login process that is more consistent with other Agencies. Most Agencies are moving to this.

I use login.gov for Social Security. I started setting up an ID.me for the IRS but I stopped when I realized what the process involved.

I’ve had it. I will be cashing out my I bonds.

I’m actually looking forward to the change because, currently, TD (Treasury Direct) has a less convenient login system than virtually every other website I use. TD forces you to check your email for a one-time code that needs to be copy-pasted every time you want to log in, which no other website does.

If you ever logged into the Social Security web site, IRS.GOV, or EFTPS then you would likely already have an ID.ME account. It’s not a big deal.

I too am livid about this. Neither my spouse nor I were ever able to get ID.me to work.

Why the controversy?

ID.me is a private corporation focusing on identify verification but has a sideline in offering shopping deals. The company was founded in 2010 as TroopSwap, a daily deal website with a focus on the American military. In 2013, the company rebranded as ID.me with the goal of providing a secure identity verification network.

The U.S. government also uses its own system, login.gov, for verification. But it has been expanding use of ID.me for sites like the Social Security Administration, Veterans Administration and the IRS. From the ID.me Wikipedia page:

As part of its identification system, the company collects a wide range of personal information, including photographs and identification documents. The company verifies information by sending it to a number of “government agencies, telecommunications networks, financial institutions” and other companies which the company trusts and considers reliable.

The Wiki reference to “companies which the company trusts and considers reliable,” could be outdated. I could not find further information.

The IRS converted to ID.me for logins in 2022. This is from the ID.me help page:

Taxpayers and tax professionals will be able to prove their identity with ID.me by uploading government documents, taking a video selfie, and filling out personal information. Once complete, taxpayers can access the IRS application for which they verified.

Uploading government documents? Photos of your passport or driver’s license? Video selfie? Personal information? All going to a private company that possibly shares information with companies “which the company trusts and considers reliable”?

That’s the core point of the criticism: ID.me is a private company collecting your personal data, including your image. And it has a shopping service on the side?

The ACLU has been campaigning against use of ID.me on essential government sites, saying, “Forcing people to use private ID-verification to access tax accounts or other government services raises serious privacy and equity issues.”

The ACLU in 2022 published “Three Key Problems with the Government’s Use of a Flawed Facial Recognition Service.” It includes:

Even if you do have reliable internet access, that’s no guarantee that the ID.me system will work. ID.me appears to be nearly universally reviled by users for its poor service and difficult verification process. …

ID.me collects a rich stew of highly sensitive personal information about millions of Americans, including biometric data (face and voice prints), government documents, and things like your social security number, military service record, and data from “telecommunications networks, credit card bureaus, [and] financial institutions.”

Overreaction?

TreasuryDirect gives us the positive spin:

The new login process, ID.me, is a more standardized, secure way of logging in. It uses a government-verified method to verify your identity, which protects your sensitive personal and financial information from identity theft and unauthorized access. By using ID.me, you gain a trusted, convenient, and highly secure digital credential that allows you to safely access multiple government services without needing separate accounts.

I have accounts with login.gov, which can be used on the Medicare site, and ID.me, which is needed to make and track estimated tax payments to the IRS. As I recall, I spent weeks fussing over creation of the ID.me account, uploading personal information and having the process fail. The “video selfie” seemed to be a particular problem. My wife had similar problems.

At the time, I wasn’t paying much attention to the fact that ID.me is a private company with military connections and expanding government contracts.

I will warn everyone: If you want to continue to use TreasuryDirect and don’t have an ID.me account, begin setting that up quickly. It might work easily for you; it might not. October 28 is 2 1/2 months away.

Am I thinking of withdrawing all my money from TreasuryDirect because of this changeover? No. At this point, I can use ID.me successfully to log into the IRS site, so I will probably be fine — with the process. Not so fine with a private contractor having access to all this information, including my TreasuryDirect login.

Unless you are prepared for a withering tax hit, don’t suddenly redeem all your I Bonds from TreasuryDirect. All interest will be taxable in 2026. And if you are holding other longer-term Treasurys there, moving those investments is going to take months.

Plus: If you redeem I Bonds, you will need to log into TreasuryDirect in late January to retrieve your 1099s. You will need an ID.me account to get those 1099s, because TreasuryDirect will not be mailing them to you.

What comes next?

TreasuryDirect says this:

  • Ensure that you have two government-issued forms of identity ready when signing up for ID.me. This can be your SSN and a valid government-issued photo ID, such as driver’s license, state ID, passport or passport card. You may also be asked for photo verification using your cell phone’s camera. Note that if you already have an ID.me account, you may be asked to complete additional identity verification to meet security requirements before you can use it to access TreasuryDirect.
  • Set up your ID.me digital “Wallet” once you have an ID.me account. Your wallet securely stores your verified identity information and will make logging in quicker going forward.

Additional information, including required actions and key dates, will be provided before the transition begins.

I am a troubled by this statement: “Note that if you already have an ID.me account, you may be asked to complete additional identity verification to meet security requirements before you can use it to access TreasuryDirect.”

Really? Additional identity verification?

Also, I wonder what will happen at households with two accounts (husband/wife, for example) and potentially additional trust accounts. Will all these have to be verified separately?

Under TreasuryDirect’s current system, I can log into both of our accounts since the verification code is sent to my email address. That might not be possible with ID.me stepping into the middle of the login process. And it also means your partner may need to set up an ID.me account in the next two months.

I see many, many problems coming for TreasuryDirect users. Let’s face it: Tipswatch readers and Bogleheads are very tuned-in investors. A huge number of TreasuryDirect users are likely to go the site on or after October 28 to find they are locked out until they get ID.me set up.

The ID.me change could be the first of a series of long-rumored “upgrades” to TreasuryDirect. Get ready for a rough ride.

What do you think? Will you truly close out your account at TreasuryDirect? Have you successfully created an ID.me account? Or have you failed? Tell us in the comments section below.

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David Enna is a financial journalist, not a financial adviser. He is not selling or profiting from any investment discussed. I Bonds and TIPS are not “get rich” investments; they are best used for capital preservation and inflation protection. They can be purchased through the Treasury or other providers without fees, commissions or carrying charges. Please do your own research before investing.

Posted in I Bond, Investing in TIPS, Savings Bond, Social Security, TreasuryDirect | Tagged , , , , | 205 Comments