I was listening to yesterday’s CH podcast earlier and he’s telling people to get out of Series I bonds now that inflation is down, even taking the 90-day penalty. I had figured to keep mine five years, not sure now.
If you’ve had the I bond for a year, there is no penalty for taking the money out. I had a few I bonds when they were paying ridiculous rates 2 years ago but have none currently. I locked in a few CDs when they were paying 5.5%, but that gravy train is over as well.
Penalty maybe the wrong word choice. He said you lose the last 90 days interest.
That’s still a penalty. Regardless, once you hold the bond a year you can cash it anytime.
I was thinking it was 5 years to avoid any penalties.
Does anyone remember when United States savings bonds were frequently given as wedding presents. The bride and groom then put the bond in their safety deposit box and kept it there until its maturity date which was usually seven years from when it was issued. Most of the ones purchased as wedding gifts for us turned out to be a bad investment but no one could have predicted in the seventies when we got married how interest rates would soar during the early eighties
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We had a stack of series E savings bonds that we bought through payroll deductions in the 70s and 80s. We cashed them in when they were 30 years old because they stopped accruing interest then. It was the original deferred tax mechanism, as you did not have to pay tax on the intrest until the bond was redeemed.
When I was in grade school, my parents would give me a dime every week or so to buy a savings bond stamp that I could stick on a form. When all the spaces were filled, the filled form could be redeemed at a bank and a savings bond would be issued to you.
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Before we married my wife was buying a few hundred a month in EE bonds, I didn’t realize it until after we were married a few years and then she stopped. They paid for almost half my kids college tuition and we still have a stack left. My son has around $18,000 in face value I bonds from when he was very young, the value today is over $40k. They’re from 2000-2005 and are paying over 2% fixed plus the variable rate, they were getting over 10% for a while when inflation exploded a couple years ago. I have $10k in face value I bonds from 2000 that have a fixed rate of over 3%.
On the I bonds, seems it might be worth it for me to cash mine in, but I haven’t yet. It would just sit in a savings account, making even less, until I figured out what to do with it. I have some home projects I’d like to do, but haven’t priced them out yet.
Then, there’s the question of whether Trump’s tariffs drive inflation back up.
If you’re going to make less just keep the I bond, money market accounts are only paying 3-4%.
I wouldn’t cash it until you see a rate you like in a CD or MM. I’ve seen 4.5% around, best you’ll do in cash I think. And if inflation jumps for any reason, you can bounce back into I funds.
I’d just keep the bond, chasing a percentage point or two doesn’t seem worth it, and if inflation does go up he’s already in the bond. Just my opinion.
My Ford Advantage money market was at 5.5 for over a year, I just checked it’s 4.8% today. Depending on when Mac bought the bond it should be a little over 3%. IMO casing 1% isn’t worth the hassle.
True, I can be silly like that at times.