A last-minute rush for anything, including I Bonds, can easily trip you up these days as the universe tries to recover from the pandemic.
Some delay or disaster lurks when you're standing in line for coffee, trying to get a prescription filled for a loved one and yes, even aiming to be sensible by opening an account online for inflation-adjusted Series I U.S. savings bonds.
Many systems, including TreasuryDirect, aren't up to date or ready to handle high demand.
Some faced trouble logging into the TreasuryDirect.gov site on Wednesday, including after 9 p.m. Wednesday evening.
“Due to exceptionally high traffic, the TreasuryDirect website has experienced intermittent slowdowns today. We are in the process of adding to the system’s service capacity and taking other steps in the hopes of resolving the issues quickly,” according to a statement emailed to the Free Press Wednesday night by the Treasury Department.
Consider this a warning in case you're aiming to buy I Bonds in the last days before an Oct. 28 deadline. Many people have no trouble at all but others face some ridiculously frustrating holdups.
Steve Economy, of Brighton Township, got a firsthand look at both sides of the I Bond saga.
In early October, he tried to open an account for himself but kept getting locked out. He still doesn't have his own account. And now it's going to take weeks for him to get the papework in order to prove his identity and go through the process ahead to actually open up an account.
When it came to opening up a TreasuryDirect account for his wife, the system worked, no problem at all.
Economy, who is 83 and now retired, once served as a senior vice president for the Wayne County Airport Authority. He has the same address as his wife, the same bank account. He has had the same bank account, he says, since he "got out of college, which was a long time ago."
He isn't sure why he ran into any snags.
Like many things these days, it's extremely tough to get answers when something goes wrong. And like the phone lines for the Internal Revenue Service, you're looking at extremely long wait times if you need to talk about an issue relating to savings bonds with the Treasury.
Last week, Economy says he waited three hours and 15 minutes before someone picked up the phone at Treasury.
"I figured I'd wait them out," said Economy, who has a home office and just stayed on the line, keeping busy through the day while he was waiting. He had made calls on those bonds earlier, gave up too soon and didn't get through at all.
"If I wasn't retired, how does anybody sit on the phone for that long?"
"You can't talk to a human being and you've got to wait hours. Then, you can't get a straight answer. It's like the system is messed up. It's not a well-working system. There's got to be a better way to streamline it."
The number to call to address TreasuryDirect issues is 844-284-2676 Monday through Friday 8 a.m. to 5 p.m. Eastern time. If you call later in the day, you might hear a message that the office is no longer accepting calls for the day due to the number of customers holding and the limited time remaining before the workday ends.
In the end, Economy discovered that he was one of a limited group of people you read about on social media who faced a massive bureaucratic headache. They're required to file additional paperwork to prove their identity before they can open a TreasuryDirect account. To do so, you must fill out Form 5444 , which is designed to prevent fraud when opening the online TreasuryDirect account.
The process involves going to go to a bank or credit union to get a seal or stamp of a notary or a "signature guaranteed" seal or stamp to verify your identity.
Many times, people are able to open the online TreasuryDirect account without this additonal step but it's not always the case.
You can't buy I Bonds unless you're able to open an online account. (During the tax season, you can direct a tax refund toward I Bonds if you file a Form 8888 when you file the tax return.)
What's even more frustrating, Economy was told that it could take up to 13 weeks to get through the process involved with double checking one's identity.
"That's over three months," he recalls telling the TreasuryDirect employee on the line.
"She said, 'Well, I know.' "
But waiting that long wouldn't work, if you're out to get the best rate.
What happens if you buy in November?
What happens if you wait?
Savers are looking at a deadline of Oct. 28 to open an account online at TreasuryDirect.gov to snag an annualized rate of 9.62%for a six-month period after the initial issue date of the I Bonds.Interest is compounded semi-annually.
I Bonds can be bought online in any denomination from $25 to $10,000. The limit is $10,000 per person each calendar year.
If the I Bonds end up being issued from November through April 2023, the initial annualized rate will drop to around 6.48% for the first six months after the purchase. You'd lose out on that higher rate by waiting or delaying.
Most people want to buy by Oct. 28 so they can end up with a rate of about 8% over 12 months, after combining the 9.62% rate for the first six months and the new 6.48% annualized rate for the next six months.
Those who have an existing TreasuryDirect account online might not face any issues with the deadline. But those trying to open new accounts at the last minute might, if they run into issues where they must prove their identity.
John Rizzo, senior spokesperson, public affairs for the U.S. Department of the Treasury, said many savers will be able to open an account on Oct. 28, pass authentication, validate their bank account and purchase the bonds that same day.
But if there are ID issues, it's going to be a problem.
If a customer attempts to open an account now but encounters an issue with having their identity verified, Rizzo said, it will be challenging to resolve the issue before Oct. 28.
He added: "We cannot open accounts over the phone. Current regulations require that the customer open their own account. TreasuryDirect cannot do it on their behalf."
Buy a gift?
Economy thinks he found a workaround. A second Treasury employee on the line suggested that his wife could buy him I Bonds and then "gift" the $10,000 in I Bonds to him. He will still need to verify his identity to open his own online account so the bonds can ultimately be shifted to his account.
His wife did buy the I Bonds as a "gift" for her husband and he plans to verify his identity to get the online account open. And $20,000 was deducted from their checking account for his-and-hers I Bonds —- as they wanted.
Unfortunately, another big headache cropped up in that process.
Economy said an extra $10,000 was deducted from their checking account but it shouldn't have been. "They took two $10,000 payments for my gift out of the same account," he said.
Economy doesn't know how that happened but he's expecting that it could take months to get that extra $10,000 back.
"I couldn’t make this up," Economy said.
To "gift" a bond, you need the recipient’s full name and Social Security number when you buy the bonds. And you're eventually going to need their TreasuryDirect account number. The person who is to receive the bonds will need to have a TreasuryDirect account but an account isn't needed immediately when you buy those bonds.
The TreasuryDirect site notes: "You must hold the savings bonds in your account for at least five business days before you deliver them to the gift recipient. That five-day hold lets us be sure that the money for the gift has successfully gone through the banking system."
Gift bonds count toward the annual $10,000 limit of the recipient, not the giver, according to Treasury. If you know someone is buying I Bonds on their own — or other relatives might be buying them for the same child — you need to pay attention to the annual limit and coordinate purchases.
Online system — and inexperienced customers — can be a bad mix
The Treasury Department unveiled a more friendly design in October for the online system with bigger print and more boxes of information. Treasury said it continues to make efforts to improve the customer experience through TreasuryDirect. Additional improvements could be ahead.
But right now, some still experience headaches and confusion.
The site notes in its announcements: "Heavy volume is slowing our response time to calls on the phone and cases sent by mail. You can call us from 8 a.m. to 5 p.m. ET, Monday through Friday. Please expect long wait times if you need an agent. Cases you send by mail may take us as long as 13 weeks to process. Processing of FS Form 5444, for account authorization, currently takes about eight weeks."
Treasury is working to improve processing times for Form 5444, Rizzo said. But currently, he said, it may take several weeks to process due to high demand.
Another update at TreasuryDirect online: "If you’ve had trouble accessing your account, please try again. Recent changes we made may enable you to log in now."
Virginia Democrat U.S. Rep. Abigail Spanberger complained to Treasury Secretary Janet Yellen in the summer about “red tape and outdated systems” that present roadblocks for everyday savers trying to buy inflation-indexed savings bonds online.
“While I understand the need to protect against fraud, this complicated process prevents Americans from opening these accounts,” Spanberger wrote, noting that some investors may give up or “miss out on weeks of accruing interest.”
It is a do-it-yourself online project to open an account and then transfer the money you need out of a checking or savings account to buy I Bonds. Many people have no problem at all — and that's a good thing because some tell stories of long, frustrating delays when they try to resolve problems by calling the Treasury Department.
Some have seen glitches and need to get their TreasuryDirect accounts unlocked; others had trouble resetting passwords. Some don't understand how the system works. Some very unlucky souls need to go through a long process to verify their identity before they can open an account.
Sometimes, you can try to avoid trouble spots on your own.
One key tip: Savers will want to link their TreasuryDirect accounts to bank accounts that they expect to keep open for some time.
Some savers have run into problems when they've closed checking or savings accounts that were connected to TreasuryDirect accounts, said Ken Tumin, founder ofDepositAccounts,which is part of LendingTree and tracks and compares bank rates.
Tumin said he had a problem with his TreasuryDirect account when the checking account that he had used was closed due to inactivity.
"I then had to go to my local bank to get a special signature guarantee on the TreasuryDirect form to link a new checking account to my TreasuryDirect account," he said.
"It took a couple of months for the new link to be created," he said. Others have had to do something similar when opening TreasuryDirect accounts if TreasuryDirect can’t verify the new user.
Much information is available online but it can take time to research it. Unlike years ago, no one at your bank can fill out forms and process the purchase of I Bonds.
Savers have not been able to walk into a bank to buy paper savings bonds — both the old-fashioned Series EE and the much-talked-about Series I bonds — since January 2012, as the Treasury stopped sales at banks and became more dependent on its online system.
Some grandparents and others who liked to buy savings bonds as gifts found the online system rather clunky early on. But the social media uproar only hit lately as the big rush to buy I Bonds began when everyone started worrying about inflation again.
Savings bonds haven't been a hot topic for years. As inflation took off, though, many learned about how I Bonds could offer higher interest rates than regular savings accounts or certificates of deposit.
The 9.62% rate, which applies to new I Bonds bought this year from May through October, grabbed headlines in the spring and summer. Many people already opened accounts earlier this year and got that rate. Older I Bonds also ultimately end up getting the 9.62% annualized rate for six months, as the inflation adjustments take place for those bonds.
More than $24 billion in I Bonds were sold via TreasuryDirect during this year through Oct. 14, according to the Treasury's data.That's up from about $5 billion in 2021. That amount is net of any returned money that is over the limit allowed for purchase in a year.
More: I Bonds took off with inflationI Bonds can bring big deals for savers: Why you should buy before Oct. 28
The surge took place because interest rates on I Bonds rose substantially as inflation increased. "And it creates a significant, much higher than normal volume," said Daniel Pederson, a Monroe-based savings bond expert and founder ofwww.BondHelper.com.
Some questions and glitches can be rather simple to fix — if it didn't take so long to get someone on the phone.
One reader wasn't clear that you just don't click on "Step 1" to start to open an account. Instead, you must scroll down past where the website lists steps 1 through 3 and then spot the "Apply Now" button at the bottom. You click on "Apply Now" to start the process to open an account.
Another saver, Jeffrey Miller, of Commerce Township, said he opened his TreasuryDirect account in late September. But he could not see the $10,000 to buy the I Bonds actually being transferred out of his bank account to the bonds.
"I thought it would be automatic once the application was complete," said Miller, 75.
It wasn't but he couldn't find an easy answer.
He called six times but couldn't get through. He sent emails but the emails only generated an automatic response, saying that Treasury was busy.
Finally, he got through after waiting about 90 minutes on one call. He learned that he just missed one step in the process. He did not authorize the purchase by opening up the "Buy Direct" screen to key in the amount and finalize the purchase. "You fill in the amount, there's some conditions that you agree to, and fire away," said Miller, who worked in the insurance industry before retiring.
"Hopefully, it's been done," he said.
It was a fairly simple issue that could be resolved if someone was able to get on the phone with him.
"They have system problems, which shows up in customer service, long delays, no responses," Miller said.
Again, the online process should work for many who have bank accounts, routing numbers for their banks, Social Secuirty numbers and other information on hand. It has worked fine for many savers who are comfortable making purchases online. Don't let some horror stories discourage you from trying to open an account — or just listen to buzz on social media saying this doesn't work for anyone.
But — like a lot of things these days — give yourself time to read into the details and don't expect that everything runs smoothly all the time, either.
ContactSusan Tompor:stompor@freepress.com.Follow her on Twitter@tompor. To subscribe, please go tofreep.com/specialoffer.Read more onbusinessand sign up for ourbusiness newsletter.
