A guaranteed way to beat inflation temporarily crashed a Treasury website

The demand to buy US Series I savings bonds this week has been so great that it temporarily crashed the Treasury web site where those bonds are purchased. That could mean some investors’ requests may not be processed in time to lock in the bond’s 9.62% rate by the October 28 deadline.

TreasuryDirect.gov was alerting users to that possibility on Thursday, citing “unprecedented” volumes. “We cannot guarantee that your bond purchase will be completed before this deadline if your account or purchase requires additional customer support for issues such as identity verification.”

Treasury said Thursday it has since fixed the underlying technical issues and has more than doubled the connectivity capacity of the site to allow more customers to successfully set up accounts and purchase bonds. But, a Treasury official noted, there might still be some intermittent issues depending on traffic in the next two days.

To give an idea of how big the surge in traffic has been, the official said: “In the final days of the rate window, TreasuryDirect.gov has gone from an average number of concurrent visitors of a few thousand to being one of the most visited websites in the federal government.”

The historically high rate on the I Bond, which is determined by a formula based partly on changes to the Consumer Price Index, resets every six months. It is next scheduled to do so on November 1.

It’s not surprising that demand for the inflation-protected savings bond soared in the past week, given that it’s virtually impossible to find any investment that offers a 9.62% return these days, let alone a “safe” one.

There are restrictions on just how much you can invest in an I Bond, however. Individuals may only purchase up to $10,000 in I Bonds electronically in a calendar year. (For married couples, each spouse can purchase their own I Bond for a total investment per year of up to $20,000.) In addition, you may purchase up to a $5,000 paper I Bond if you use your federal tax refund to buy it.

The catch with I Bonds, which you can hold on to for up to 30 years, is this: You may not cash it out in the first year. And to get the full amount of interest, you have to hold the bond for at least five years. Otherwise, you will sacrifice three months of interest.

So while it’s not a liquid investment right away, it’s a good place to park cash you’re not going to need for the next 12 months, if only to preserve its buying power in today’s high inflationary environment.

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