Why is this getting downvoted? Current return on I-bonds is 2.52%, higher than any high-yield savings that I know of. It compounds semi-annually, tracks inflation, and there are no penalties for withdrawal. Seems perfect for an emergency fund and less hassle than a CD ladder. I'm not shilling an investment product, it's available direct from the US treasury:
It's not a bad idea. I've thought about migrating to I-Bonds. I've kept it in a savings account for the liquidity, but if you are okay with having a less liquid emergency fund, go for it.
Is that correct? According to the TreasuryDirect website, you can't redeem a bond within the first year. If a bond is less than 5 years old, you pay a 3 month interest penalty.
That is correct. It's twelve months instead of six. I was mistaken. Generally speaking an emergency fund should be 3-6 months of income. I justified the illiquid period by moving a third of my fund into it at a time.
The interest "penalty" is simply not getting back the interest accrued in the prior three months.
https://www.treasurydirect.gov/indiv/research/indepth/ibonds...