TreasuryDirect Site Hits Snags; New Rate Set for I Bonds

A Treasury Department spokesperson sent a brief comment about the site problems: "The Bureau of the Fiscal Service is aware some users are experiencing intermittent access with the Treasury Direct system on Friday, April 28th. We are monitoring the situation closely and working to address any issues."

Whatever issues TreasuryDirect may have encountered Friday, they appeared to have paled in comparison to the repeated site crashes and long phone wait times that investors experienced over many days in October as they rushed to buy I bonds before the attractive 9.62% interest rate in effect at the time was reset on Nov. 1.

A department spokesman told ThinkAdvisor earlier this month that the agency had added enhancements to avoid the crashes and slowdowns that consumers faced in October. These include adding self-service for password reset and bank account changes, adding staff to service centers to reduce call wait times during high-volume periods, increasing site capacity and adding a "waiting room" function to support larger volumes of users if needed leading up to the rate change.

New I Bond Interest Rate

The new 4.30% I bond interest rate, which reflects softening inflation, includes a 0.90% fixed rate that won't change for those bonds. The inflation-linked element of the rate will last for six months from the purchase date, then update with the Treasury Department's next inflation adjustment.

The Treasury Department sets new rates every six months, with the inflation portion linked to government consumer price data. The government often set the fixed rate at 0%, but when the department adjusted the I bond interest rate in November to reflect cooler inflation, it boosted the fixed-rate component to 0.40%.

Early Announcement

Journalist David Enna, whose Tipswatch website covers I bonds and Treasury Inflation-Protected Securities, posted Friday that the 0.90% fixed rate — the highest I bond fixed rate since November 2007 — is "great news."

He was surprised that the department posted the rate Friday rather than the expected 10 a.m. ET Monday, saying it was the first time the new rate was posted early in the 12 years he has covered I bonds.

"A few minutes later, the TreasuryDirect site went down, possibly because of the 'what the hell?' factor driving traffic. But I was able to return to the site a bit later and it loaded, with the same information," he wrote, noting that the new inflation-linked rate comes to 3.38%. The fixed rate makes the bonds "very attractive," he said.

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