Comments on: Does the new I bond rate have you worried? http://www.savings-bond-advisor.com/does-the-new-i-bond-rate-have-you-worried/ Thu, 18 Mar 2010 07:00:10 +0000 http://wordpress.org/?v=2.0.4 by: Dan http://www.savings-bond-advisor.com/does-the-new-i-bond-rate-have-you-worried/#comment-342 Mon, 15 May 2006 16:08:14 +0000 http://www.savings-bond-advisor.com/does-the-new-i-bond-rate-have-you-worried/#comment-342 It's also worth mentioning that, when you're finally able to redeem, it's the LAST three months worth of interest that is sacrificed to early redemption penalty. So at the 12-month mark, if the new fixed rate at that time is significantly better, you could just cash out those 1% fixed rate I-bonds and replace with the new. Your only sacrifice would be 3 months of interest at the lower rate and an extra year before you can withdraw penalty-free. It's also worth mentioning that, when you're finally able to redeem, it's the LAST three months worth of interest that is sacrificed to early redemption penalty.

So at the 12-month mark, if the new fixed rate at that time is significantly better, you could just cash out those 1% fixed rate I-bonds and replace with the new. Your only sacrifice would be 3 months of interest at the lower rate and an extra year before you can withdraw penalty-free.

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