It may be time to redeem (some of) your ibonds

[ohgillian]

I'm about to redeem the i-bonds I bought in July 2021 and wanted to pass along a helpful resource that I found.

The i-bonds I bought in 7/21 are now earning 3.38% interest. Actually, they've been earning that for 3 few months. When you redeem i-bonds you've held less than 5 years, you forfeit the last 3 months of interest earnings. Because of that, I believe the advice is generally: when the rate goes down below what you could get elsewhere, wait 3 months and then redeem -- because if you're going to lose 3 months of interest, you want to lose 3 months of low interest. 

I am not explaining this super well, but this article has a calculator down near the bottom to help you figure out when you may want to redeem. FWIW, it is only now time to consider redeeming i-bonds from 7/21, so if you bought yours later it's probably not time yet.  [ETA: Inaccurate, I think]

www.yourtreasurydirect.com/learn/when_to_sell_ibonds

^^ don't let this URL fool you; it's not the official treasury direct site 

[shaynaatl]

We sold all of ours last year, since rates aren't superior anymore.

[ohgillian]

Oct 4, 2023 15:48:36 GMT -5 shaynaatl said:

We sold all of ours last year, since rates aren't superior anymore.

Thanks for saying this. It's possible I'm mis-understanding how the staggered timing of interest rates works so I'll check all of the rest of ours again.

[chpmnk1015]

So, just coming back to this post now.. I did my bonds last Sept.. really i should wait until to Dec to sell?

[gt7301b]

Oct 20, 2023 7:42:06 GMT -5 chpmnk1015 said:

So, just coming back to this post now.. I did my bonds last Sept.. really i should wait until to Dec to sell?

If you bought them in Sept you would have to wait the year and then add on the three months so you lose the three months after Sept at ~3 percent rather than the higher rate you purchased the bonds.

[steamboat185]

Oct 20, 2023 7:42:06 GMT -5 chpmnk1015 said:

So, just coming back to this post now.. I did my bonds last Sept.. really i should wait until to Dec to sell?

Don’t forget when you buy them that is when the rate locks in for 6 months. When we checked a few months ago we were just getting into the highest rates due to the 6month delay.

[lucybrown]

I just cashed ours in and out then into CDs with higher interest. Thanks for the nudge.

[mainelyfoolish]

Is anyone considering selling and re-buying I-bonds with the current higher fixed rate? (I know I can only re-buy only $10k per year no matter how much I cash out.)

I bought I-bonds in 10/21 and 1/22 because of the high inflation interest rate. Now that inflation is lower, these bonds with a 0% fixed rate are not very attractive. But, if the fixed rate goes up over 1% in November, I am thinking of re-buying the yearly maximum as part of my longer-term e-fund.