T bill or I bond
Have 50,000 in chicken money to invest. I bond or t bill? 3 or 6 month only . What profit can I make? Thanks Terry
Terry Says
First of all, you don’t make a PROFIT on “chicken money” investments like CDs, T-bills or Savings Bonds. You EARN INTEREST! (You don’t make a profit, but you never take a loss — except when the rates you earn are not high enough to offset inflation.)
I-bonds require you to hold them for 5 years, or take a penalty of 3 months loss of interest. T-bill mature in either 13 or 26 week timeframes, so you have greater liquidity.
I-bonds carry a fixed base rate, and a 6-month adjustment that reflects inflation. With T-bills you renew at maturity at whatever the rate is then — typically enough to offset inflation impact.
Please read the two articles on my home page — about T-bills and I-bonds so you can see all the differences and decide for yourself.