Should I early redeem a CD to reinvest in an iBond?

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guppyguy
Posts: 463
Joined: Tue Jan 30, 2018 3:24 pm

Should I early redeem a CD to reinvest in an iBond?

Post by guppyguy »

I currently hold a $10,000 CD- 0.65% with Marcus/GS with a potential early penalty withdrawal fee of 270 days. It matures 10/16/2021.

I am considering redeeming the above and purchasing $10K worth of I-Bonds. I already own I-Bonds so I'm familiar with them as an investment and do NOT need the funds anytime soon, hence the 1 year holding requirement is not an issue.

My question is, with I-Bonds now yielding 0% fixed + 3.54% inflation for the next six months, doesn't it make sense for me to convert? I know we are only talking like $100 difference here, but that appears to be free money sitting on the floor.
lakpr
Posts: 11517
Joined: Fri Mar 18, 2011 9:59 am

Re: Should I early redeem a CD to reinvest in an iBond?

Post by lakpr »

Yes. I would, if I were in your shoes.
bhtomj
Posts: 194
Joined: Wed Mar 21, 2012 10:45 am
Location: Lakewood, CA

Re: Should I early redeem a CD to reinvest in an iBond?

Post by bhtomj »

Your CD matures in the last month of the current I-Bond rate. You have until 10-29-2021 to get the current 3.54% rate. At that time we will also know the new November rate.

But I would still cash in the CD now.
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