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My understanding is you cannot cash out in under 12 months without losing the interest, and if you cash out between 1-5 years, you lose the last quarterly interest payout. Interest rates are recalculated every 6 months (November and April?). I believe that the yield / rate depends on the date you purchase the bond and which 6-month window it falls within. The rate then adjusts every 6 months based on the next window's rate.
They paid 9% plus about 1.5 years ago, but quickly fell to 5% plus (current rate). At 5% I'd rather park my cash in an online money market that is liquid and earn a similar return.
Yes, we bought our bonds in October 2022 at the 9% rate but currently it was 3.~ something so we cashed them in and will get a 5+% rate elsewhere in CD's. The interest did not begin posting until month 5 as they withhold 3 months of interest and month 4 of interest gets posted in month 5. So when you log in and see the total amount there, that is what you will get if you cash out before the 5yr. period, so 3 months are forfeited.
Yes, we bought our bonds in October 2022 at the 9% rate but currently it was 3.~ something so we cashed them in and will get a 5+% rate elsewhere in CD's. The interest did not begin posting until month 5 as they withhold 3 months of interest and month 4 of interest gets posted in month 5. So when you log in and see the total amount there, that is what you will get if you cash out before the 5yr. period, so 3 months are forfeited.
The advantage of I bonds is they will always keep your purchasing power and hover above inflation. The current one has that 1.3% fixed rate too. Additionally, you don't pay state tax on interest, only federal. Most importantly, all these CD and savings rates became significant only during the past two or so years. I use Barclay OS account, which is at 4.35% now, but was half a percent not too long ago. I bonds are for longer time frames and good as a place to hide money from oneself.
My understanding is you cannot cash out in under 12 months without losing the interest, and if you cash out between 1-5 years, you lose the last quarterly interest payout.
They can’t be cashed at all within the first year. You lose the last 3 months interest(not quarter), if cashed within 5 years.
They can’t be cashed at all within the first year. You lose the last 3 months interest(not quarter), if cashed within 5 years.
Ok. They seem like a good cash preservation tool during a market downturn, but a poor investment longer term. As we've seen the past couple of years. If you sat in I-bonds you missed out in 2023's stock market double-digit returns.
Ok. They seem like a good cash preservation tool during a market downturn, but a poor investment longer term. As we've seen the past couple of years. If you sat in I-bonds you missed out in 2023's stock market double-digit returns.
Only compared to those who realized the gains (e.g. cashed their stocks).
Ok. They seem like a good cash preservation tool during a market downturn, but a poor investment longer term. As we've seen the past couple of years. If you sat in I-bonds you missed out in 2023's stock market double-digit returns.
You shouldn’t be *sitting* investment funds in Ibonds. My Ibond funds came out of my savings account - money I’d not be putting into the market. I certainly didn’t miss out on anything since the Ibonds have returned far more than my savings account rate.
Last edited by ChessieMom; 12-11-2023 at 09:53 AM..
Why is that? Are you saying the stock market won't hold those gains?
It's been known to go up and down without having to report to anyone. Stock market is supposed to represent growth and health of the economy. At least it says so on the brochure. We all know that it's really a tool for the big boys to stash their money around, but we don't have any access to the first row seats.
We have been investing in I Bonds for the twins education needs. This is separate from our other investments as far as our future needs.
Thanks for everyone’s input. We are pretty well versed with the I Bonds but we learned a little more with everyone’s helpful input.
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