Comments on: Interest penalty for cashing Savings Bonds before five years http://www.savings-bond-advisor.com/interest-penalty-for-cashing-bonds-before-five-years/ Fri, 29 Aug 2008 20:54:37 +0000 http://wordpress.org/?v=2.0.4 by: Tom Adams http://www.savings-bond-advisor.com/interest-penalty-for-cashing-bonds-before-five-years/#comment-782 Mon, 28 Aug 2006 23:26:32 +0000 http://www.savings-bond-advisor.com/interest-penalty-for-cashing-bonds-before-five-years/#comment-782 Joan - the first day you can redeem your I bonds is Nov 1, 2006. At that point you will have earned 6.73% for six months and 2.01% for six months - about $1,320. The early withdrawal penalty will be three months of 2.01% and your interest earnings after penalty will be $1,164. Keep in mind a new interest rate for your I bonds will also be announced on Nov 1. It will be much higher than the 2.01% rate you're earning now. Read <a href="http://www.savings-bond-advisor.com/how-to-cash-in-a-savings-bond/" rel="nofollow" rel="nofollow">How to cash in a savings bond</a> to learn where to redeem your Savings Bonds. Joan - the first day you can redeem your I bonds is Nov 1, 2006.

At that point you will have earned 6.73% for six months and 2.01% for six months - about $1,320. The early withdrawal penalty will be three months of 2.01% and your interest earnings after penalty will be $1,164.

Keep in mind a new interest rate for your I bonds will also be announced on Nov 1. It will be much higher than the 2.01% rate you're earning now.

Read How to cash in a savings bond to learn where to redeem your Savings Bonds.

]]> by: Joan Mihay http://www.savings-bond-advisor.com/interest-penalty-for-cashing-bonds-before-five-years/#comment-781 Mon, 28 Aug 2006 19:32:41 +0000 http://www.savings-bond-advisor.com/interest-penalty-for-cashing-bonds-before-five-years/#comment-781 I wish to redeem bonds bought 17 November 2005. When is the first date I can redeem than and have the penalty based on the current rate and not on the one in effect last November? Can I redeem tham at my bank? I bought $30,000 I Bonds on 17 November 2005. What would their value before penalty on September 1,2006, and how much would the penalty to be deducted from that be? I wish to redeem bonds bought 17 November 2005. When is the first date I can redeem than and have the penalty based on the current rate and not on the one in effect last November?

Can I redeem tham at my bank?

I bought $30,000 I Bonds on 17 November 2005. What would their value before penalty on September 1,2006, and how much would the penalty to be deducted from that be?

]]> by: Tom Adams http://www.savings-bond-advisor.com/interest-penalty-for-cashing-bonds-before-five-years/#comment-144 Wed, 22 Feb 2006 18:44:03 +0000 http://www.savings-bond-advisor.com/interest-penalty-for-cashing-bonds-before-five-years/#comment-144 If you redeem on March 1, you lose the interest for Dec, Jan, and Feb. For those three months, I bonds issued in October of any year earned an inflation component of 3.58% while I bonds issued in November of any year earned an inflation component of 5.69%. Because rates for each individual bond are adjusted on a six-month cycle, I bonds issued in October don't begin to earn the inflation rate announced on November 1 until April. If the fixed rate on your October and November I bonds is the same, it would make more sense to redeem the October issues. If you redeem on March 1, you lose the interest for Dec, Jan, and Feb.

For those three months, I bonds issued in October of any year earned an inflation component of 3.58% while I bonds issued in November of any year earned an inflation component of 5.69%.

Because rates for each individual bond are adjusted on a six-month cycle, I bonds issued in October don't begin to earn the inflation rate announced on November 1 until April.

If the fixed rate on your October and November I bonds is the same, it would make more sense to redeem the October issues.

]]> by: tom wilson http://www.savings-bond-advisor.com/interest-penalty-for-cashing-bonds-before-five-years/#comment-143 Wed, 22 Feb 2006 18:33:33 +0000 http://www.savings-bond-advisor.com/interest-penalty-for-cashing-bonds-before-five-years/#comment-143 If i have I bonds that I want to cash on 3/1 that is less than 5 years old. Am I correct that I lose the last 3 months interest. If so, which 3 months interest will I lose in this example, is it March, February and January's interst, or is it Feb, Jan and December'05? Also, Is there a way to determine what the interest rate is for the 3 months being unearned. For example, if I want to choose between bonds that have the same Fixed rate, but some were purchased in October and some November am I correct to assume that they are on different cycles and the rate different may be substantial if there was a large uptick in the inflation component? If i have I bonds that I want to cash on 3/1 that is less than 5 years old. Am I correct that I lose the last 3 months interest. If so, which 3 months interest will I lose in this example, is it March, February and January's interst, or is it Feb, Jan and December'05?

Also, Is there a way to determine what the interest rate is for the 3 months being unearned. For example, if I want to choose between bonds that have the same Fixed rate, but some were purchased in October and some November am I correct to assume that they are on different cycles and the rate different may be substantial if there was a large uptick in the inflation component?

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