Ask Terry Questions How is I-Bond Interest Calculated? Learn here!!

How is I-Bond Interest Calculated? Learn here!!

By Terry Savage on November 14, 2022 | Chicken Money

Is this correct that the new “Fixed Rate 0.4%” applies only to NEW I-Bond purchases from Nov 1? New 11/1 purchases = 6.89% Older “rollover” purchases are 6.48%. Please VIEW YouTube video of our I-Bond friend – Jennifer Lammer; specifically time 1:10 to 2:02 https://youtu.be/K0zAD_xiRwo?t=70 Yes, that is a very SMALL difference, but I think it is an interesting distinction.

Terry Says

Thanks for your post. The calculations of interest on I-bonds take into account not only the 3-month potential penalty, but a delayed posting of actual interest until after the initial 3-month holding period is completed. So a “strange number” shows up as interest earned and it doesn’t show up until the 5th month.

I’m absolutely fascinated by the videos created by Jennifer Lammers explaining all of this. Her latest is magnificent, explaining how interest on I-bonds is calculated, when it is added to your principal, and how the potential early cash-in penalty is reflected. If you’re interested in the nitty-gritty of I-bonds, I am posting the link to her latest video here (and be sure to watch her other fascinating videos).
https://www.youtube.com/watch?v=K0zAD_xiRwo&t=70s

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