Feds raising interest rate

[zx10guy]

I thought the high interest rate payout was only for the first 6 months or something like that.

[ryan stewart]

Yeah the 9.62 is the first 6 months and then the subsequent is tied to inflation, its a hedge from then on out. You HAVE to keep it for a year to get income but once you do you can sell it at any time in 1-5 years with JUST forfeiting the previous 3 months of interest. After 5 you can bail at any time

So the idea is the intro rate is profitable and then from then on out youre parking some cash in lean times where its protected against inflation and it wouldnt be worth it to keep in the market, and if inflation goes to zero cash the hell out, lose the paltry 3 months, and just be happy youre coming out ahead.

They arent a way to make a ton of money, just a really safe place to park and stay ahead of inflation.

[M_Six]

Gracias

[Pheonix]

Originally Posted by M_Six

I look into those. $10k per year per SSN means Wifey and I could stash away $20k/yr every year. Easily doable.

This seems almost too good to be true, though. I see you need to keep them at least 5 years to avoid penalties, but are there other gotchas?

You could also add another $5k if you have Federal tax refund and directly purchase it when you file taxes.
Some main limitations:
-No interest if withdrawn within 12 months.
-Last 3 months interest penalties if withdraw between 12-60 months. Fully vested after 5 years and mature after 30 years.
-Interest reset in May and November and fluctuate with inflation.
-Could only purchase online by open account via TreasuryDirect (and paper bonds with your tax refund). The banks no longer sell I Bond.
One important thing, make sure you are careful and not make any mistake when open the online account. I made a simple mistake (wrong bank routing number) and it took almost a month to get it fixed). Also, make sure you write all the account information down because it is almost impossible to get a hold of someone via phone or email.
I wish I could put more than $10k per SS per Year!
These were the rates since 1998: