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I accidentally loaned all my money to the US government

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Re: I accidentally loaned all my money to the US government

#241

Post by mynameishere »

fortran77 wrote: post #185
vasco wrote: post #32

The venn diagram of internet users that read about super specific financial products, decide to buy them, while not even understanding the need to keep an emergency fund such that a move like this leaves them with under $200 in their account seems to be growing. It seems to be a weird mix of wall street cosplay and financial ineptitude.

You can take the money out of an ibond with a small penalty after a relatively short time. So it's not a huge risk if you have enough short-term credit, etc, for an emergency before the time comes when you can cash the iBond.

Seriously, what the hell. Acting like this guy is blowing his future on a roulette wheel by getting some savings bonds.

Is anybody else just sick to death of the term "emergency fund"? If you go to /r/personalfinance, every other comment is reminding people to stock up their emergency fund. Towelie says, "Don't forget to bring a towel!"

I'll tell you about my real "emergency fund": In an actual, living emergency, every single dollar I have, in every account, even my IRA, and all my credit lines combined, are my emergency fund. That's the nature of an emergency. If I empty out some specially earmarked emergency fund, I don't tell the doctor to quit taking the bullets out of my spleen because I'm tapped. "Sorry, can't touch my HYSA!" (HYSAs are another butt bug of /r/pf)

What people mean by "emergency fund" obviously is their "don't stupidly overdraft your checking account fund", but they never spell that out.

Re: I accidentally loaned all my money to the US government

#242

Post by LocalPCGuy »

smachiz wrote: post #182
delecti wrote: post #180

Earlier quoted context omitted.

Incidentally, that exact confusion is why he made the third transaction for $9,975. The refund on his second transaction will either be for $25 or $10,000, so his third transaction will either be refunded in full or not at all.

If they refund the entirety of the second transaction, logic follows a third transaction of $9,975 would be correct if you actually wanted to buy $10k. I suspect that's not what's going to happen though. OP will get a refund of $25 + $9,975.

You're forgetting there appears to be a race condition at play. The third transaction was marked as canceled because the second has not finished processing and so is still counting against the total. There is no guarantee the govt system will check that again once 2 completes (in fact, I'd be shocked if it did). And by the time both 2 and 3 process, the window to buy looks like it will be closed per the author's post.

Re: I accidentally loaned all my money to the US government

#243

Post by sacrosancty »

cmeacham98 wrote: post #94
ianai wrote: post #84

Earlier quoted context omitted.

That’s definitely a thing too often. The “middlebrow rejection” or something like that. But in this case the OP got a message saying they had exceeded the limit and would get a refund. Then they repeated the transaction at the limit for a total of 20k. From reading comments here it sounds like the author both misinterpreted things and also compulsively over deposited to test the governments software. Testing governme…

Maybe I was primed by the author because I was reading their article, but I understood it the same way they did - the entire $10k was rejected because it put them over the limit. I probably would have tried the same $9975 transaction they did.

Maybe I still don't understand but why didn't he get any I-bonds for either the $10k or the $9975 if they're only refunding the excess? What are you supposed to do if you over-pay? Wait for your refund before buying again?

Re: I accidentally loaned all my money to the US government

#244

Post by 8bitben »

gavinray wrote: post #225

Is this window the author speaks about still open? I don't know anything about money/finance. Can someone ELI5 to me if I can still get the free money from this, this year?

You missed the window to lock in the older interest rate (7.12% APY) for six months, but it is widely expected that the May rate change will increase the rate even higher.

You can still purchase I-Bonds, with the understanding that the May rate will be adjusted again in 6 months (it could go down if inflation goes down) and you won't be able to pull your funds for a minimum of one year.

It's a great option for inflation protection if you can let that money sit for awhile. https://www.treasurydirect.gov/indiv/research/indepth/ibonds...

Re: I accidentally loaned all my money to the US government

#245

Post by LocalPCGuy »

afiodorov wrote: post #93

You took one for the team. If the world ran on good software, you'd not cautiously deposit only $25 first and you'd not be tempted to stress-test the system with the $10k deposit. If the world ran on good software, the second $9.975k deposit wouldn't have bounced. Don't worry, I'll get back at them in my work by making the users suffer until they understand what good software is!

If the software was good, it would have either returned an error prior to withdrawing funds on the 2nd transaction ($10k), or the return would be $25 (and then it's fine the 3rd transaction failed). Only as a third option would the 3rd transaction be the one that is accepted after rejecting the 2nd entirely.

But lots of ways to "fix" bad software.

Re: I accidentally loaned all my money to the US government

#246

Post by cesarb »

Someone1234 wrote: post #183
jefftk wrote: post #62

> They require you to enter your password by clicking on a virtual keyboard. This pseudo-security measure actually only slows down humans, not bots, because you can still edit the value of the text field using Javascript. I don't think this is generally worth it as a security measure, but the goal is not to protect against automation. Instead, custom on-screen keyboards are attempts to thwart keyloggers.

> Instead, custom on-screen keyboards are attempts to thwart keyloggers. Commercial malware doesn't work this way. The term "keylogger" is a misnomer. "Keylogging" without context provides an unintelligible stream of garbage that might have well be from a random number generator. Most malware that I've seen either directly target the browser or the operating system, but in both cases they're looking for an unencrypte…

> Commercial malware doesn't work this way. The term "keylogger" is a misnomer.

I don't know about commercial malware, but at least in the 90s (which is when these kinds of on-screen keyboards started to appear), it was not unusual to find on a computer "infected" with malware a text file containing every key that was pressed since the malware was installed.

Yes, nowadays malware tends to be much smarter: also capturing an image of the area around the mouse pointer on every click (which is the reason some on-screen keyboards blank the keys when you click), only logging when the window has an specific title (which is the reason some online banking sites add lots of random spaces and punctuation to the window title), or even using lower-level code to hook into the browser and directly capture the form contents on submission (which is the reason several online banking sites require you to use invasive "anti-malware" plugins which attempt to prevent these kinds of hooks).

Re: I accidentally loaned all my money to the US government

#247

Post by nknealk »

gavinray wrote: post #225

Is this window the author speaks about still open? I don't know anything about money/finance. Can someone ELI5 to me if I can still get the free money from this, this year?

It’s not “free money”.

The US Government offers a special savings program called iBonds (not an apple product). Technically they’re referred to as Series I bonds.

These bonds are special. Each citizen can only purchase $10,000 per year. The thing that makes them special is that they have really favorable interest rates that are made up of two components. There’s a fixed component largely controlled by the Fed. Currently this is essential 0% though rates are rising. The second component is tied to inflation. Right now, that component is ~8% for the most recent issuance (there are two issuances per year of these bonds where they recalculate the interest rate). This rate may change if inflation goes up or down.

The bond is special because that 8% is really high compared to other risk free instruments. For example, compare that 8% to what you’re earning on your savings account. Hence why many people have taken interest in iBonds recently.

You can only purchase these instruments directly from the treasury department. Google Treasury Direct. Also there are rules about how long you have to hold them and how much interest you give up if you need to withdraw your money early. Those rules are outlined on Treasury Direct.

Re: I accidentally loaned all my money to the US government

#248

Post by LocalPCGuy »

msrenee wrote: post #218
derangedHorse wrote: post #110

Earlier quoted context omitted.

"A refund of the excess purchase" seems like it might be the whole amount of the purchase assuming the "purchase" refers to the entire purchase transaction. The wording could have been clearer though and hopefully it's just the $25 from the second purchase that's returned.

Say you go to the refrigerator store and they are selling fridges for $100 each, limit 10, or as stated in this store, limit $1000 in fridges. You give them $1100 to buy 11 fridges. They refund the excess purchase, which would be $100 or one fridge. At least that's my logic here. I feel like the excess purchase is that extra $25 plus the third transaction. But who knows, honestly? It's probably tied up in some barely…

You can describe your interpretation all you want, but the English used (excess purchase) is able to be interpreted in either way (the excess over the allowed about or a singular purchase that went over the allowed amount). There is no real way to know which is accurate in this situation unless the OP or someone who works there answers the question.

Re: I accidentally loaned all my money to the US government

#249

Post by [deleted] »

mynameishere wrote: post #241
fortran77 wrote: post #185

Earlier quoted context omitted.

You can take the money out of an ibond with a small penalty after a relatively short time. So it's not a huge risk if you have enough short-term credit, etc, for an emergency before the time comes when you can cash the iBond.

Seriously, what the hell. Acting like this guy is blowing his future on a roulette wheel by getting some savings bonds. Is anybody else just sick to death of the term "emergency fund"? If you go to /r/personalfinance, every other comment is reminding people to stock up their emergency fund. Towelie says, "Don't forget to bring a towel!" I'll tell you about my real "emergency fund": In an actual, living emergency, eve…

[deleted]

Re: I accidentally loaned all my money to the US government

#250

Post by leephillips »

adrianmonk wrote: post #240
msrenee wrote: post #13

I'm missing the logic of the second 10k. He had already exceeded the limit. Why did he think that doing it again would change the outcome? It looks to me like he was going to get the extra $25 returned to him and have 10k in bonds. It's definitely vague though.

They assumed the government's software would do this: (1) Purchase #1 for $25 successful --> reduce remaining limit from $10000 to $9975. (2) Purchase #2 for $10000 rejected and refund pending --> DO NOT reduce limit since you know the purchase didn't go through. (3) Purchase #3 for $9975 within limit --> allow purchase, reduce limit to exactly $0. Instead, at step 2, the software seems to handle the purchase by unco…

The email clearly says that the excess purchase will be refunded. He lost me here; I was mystified when he decided to purchase another $9975.
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