With inflation raging and volatility in the stock market persisting, you better believe I jumped at the chance to join in on the newest personal finance craze: Bonds, baby, bonds! With rates of nearly 10%, Series I Bonds make a lot of sense for Millennial investors. And in a bit of marketing luck, what better name for a bond product offering to our self-centered generation than I Bonds? Investors adding bonds to their portfolio for the first time (*raises hand*), though, will be greeted with a very un-Millennial user experience on the truly awful Treasury Direct Website. I mean, look at this hot piece of garbage:

Forging a First-Time Bond

Awful website aside, the time is now to forge a bond with bonds for the first time in my investing life. Who knew there was a (mostly) risk-free way to earn some sweet, sweet yield, courtesy of the kind folks at the United States Government? Behold, the Series I Bond.

When it comes to my portfolio, I’ve always been all gas (equities) and no f***ing brakes (bonds). Can you blame me? As a vaguely 30-something year-old, I’ve grown up in an anti-bond environment, where the 40% of a 60/40 portfolio has returned next to nothing. As such, I’ve eschewed the Target Date Funds and taken the bumpier ride with Vanguard’s total stock market fund, VTSAX. But with interest rates rising and stocks shrinking, it makes sense for Millennials to lock in some yield.

There’s only one problem with my new enthusiasm for the I Bond allocation: the buying process is incredibly archaic via an ancient website, with no alternative solution. The only way to purchase Series I Bonds online is through the crappy Treasury Direct website. And boy, is it crappy.

The nostalgia of purchasing Series I Bonds on Treasury Direct

While brokerage houses continue to update their user interfaces and make their products less intimidating to the masses (the beloved gambling app, Robinhood, comes to mind), a visit to the Treasury Direct website is like going back in time. In fact, browsing the invaluable and endlessly entertaining Wayback Machine reveals that the site, as it appears now, is virtually unchanged from a screenshot in November 2002. There’s no reason for a bond product, backed by the full faith and credit of the U.S. Gubment, to be made exclusively available on what appears to be a Geocities website. One of my favorite site features is manually entering my account password by clicking the letters of a digital keyboard with my mouse, one-by-one. Takes me back to a simpler time.

Nostalgia isn’t always a good thing, and when it comes to matters of your net worth, you’d like to see a little growth over a period of nearly 20 years. It’s only fair to expect the same out of the investment vehicles you utilize in getting there. Sure, mere months ago, speculative investors cited the reasoning “difficult to buy” as a positive when it came to obscure shitcoin purchases. But the reality is that most people will give up when something is needlessly difficult and frustratingly inefficient.

Don’t let the Treasury Direct website deter you. Despite the difficulty, now is still a good time to buy Series I Bonds. And don’t take it from me. Take it from nearly the entire personal finance community.

Why is everyone touting Series I Bonds all the sudden?

If you’ve kept tabs on the FIRE blogosphere over the last few months (NERD!), you’ve likely seen a very strange phenomena: personal finance bloggers all hawking the same investment product… without receiving an affiliate commission! That’s how you know you’ve stumbled upon something special. Here’s a small sampling of the great I Bond migration over the last year and a half:

• How Series I Savings Bonds Work (awealthofcommonsense.com) – Ben Carlson concurs with my rant, noting that “The Treasury Direct website looks like it was created in 1997 and is not the greatest user experience.”
• I Bonds are My Bonds – Slightly Early Retirement (steveark.com)
• How, When, and Why to Buy I Bonds – Physician on FIRE
• Buying I Bonds As Part Of My Emergency Fund Strategy – Financial Panther – In some instances, as detailed in this post, the awful Treasury direct website is unable to verify personal information automatically upon the creation of an account. Another needless deterrent rears its ugly head.
• I Bond Returns: Almost Too Good To Be True – Financial Samurai
• Series I savings bonds: A safe investment with a high return (getrichslowly.org)
• Any Interest? – HumbleDollar – Shoutout to HumbleDollar for getting in on the ground floor when inflation had yet to hike I Bond rates above 2%, and doing so against the grain at the height of Meme Mania in February 2021.

And those are just a sampling of the smart personal finance folks who have hopped on the Bondwagon. So why is everyone touting I Bonds all the sudden?

A brief Series I Bond overview

If you’re too lazy to click any of the above links, which explain the ins and outs much better than I’ll attempt to, I’ll give a brief synopsis here. As of last month, the 6-month yield on Series I Bonds is 9.62%, as compared to double-digit year-to-date losses in the market. But there are a few strings attached. The big catch is that you only lock in the current yield for six months, and there’s no telling whether the next rate will be higher or lower (the May-October rate increased from the previous 6-month rate of 7.12%). This rate is tied to inflation via the Consumer Price Index, which means these high rates are the direct result of something universally loathed. The I literally stands for Inflation. Hence, the sudden run on I Bonds and the inflation protection they provide versus a simple cash position.

Speaking of cash, you are required to hold I Bonds for a full year, so if you’re funding this investment with a portion of your emergency fund, you won’t have access to it for a full 12 months. That isn’t too long of a commitment, but it can be a problem in the event of, oh I don’t know, an emergency. Don’t invest anything you absolutely need, but if you’re hoarding a large emergency fund and will have plenty leftover, you can stash up to $10,000 per year in I Bonds. After a year, you can cash in should you so desire, but doing so before a period of five years will cost you three months-worth of that sweet, sweet yield. Ideally this is a longer-term investment with a five-year plus time horizon, but you do have some flexibility in a pinch.

Don’t let the Treasury Direct Website deter you from buying I Bonds

Lastly, and most unfortunately, you have to use that awful Treasury Direct website to buy these bonds electronically. There is no ETF offering or mainstream brokerage account from which to purchase. It’s Treasury Direct or bust. For the Mint and Personal Capital diehards such as myself, this can be an issue when tracking your various accounts. As you might have guessed, the Treasury Direct website is clearly incapable of linking to the alien software of your favorite budgeting site. My workaround is to simply list the bonds under “property” and update as appropriate. Not a huge deal, but still another minor annoyance. Which, I suppose, sounds like par for the course for the U.S. government.

The recent stock slump means now is a good time to buy the dip. But there’s no telling when the dip will stop dipping. Series I Bonds are a great way to gain some bond exposure in an otherwise equity-dense portfolio.