Series 1 savings bonds
I just opened an account on Treasury-Direct. I purchased $5,000. Series 1 savings bond Immediately. And for future I have automatic purchase each month of $200. I will get 6.89% It says on line that your money is locked up for 1 year. Redemptions before 5 years incur an interest penalty. The interest rate can fall if inflation does. Can you explain the 1 year & 5 year difference better. I thought I would only need it in there for 1 year.
Terry Says
If you redeem the bonds before 5 years, there is a 3 months loss of interest penalty.
Read this: https://www.terrysavage.com/i-bonds-everything-you-must-know/
Also, you will get 6 months of 6.89% interest on any bonds purchased before May 1, 2023. On that date the rate will change for bonds purchased subsequently. We’ll know the new rate on May 1st.
