Naive question regarding I-bond contributions

[afr]

My wife and I contributed 20k in December '21 to our I-bond accounts and are planning to contribute 20k this year. We currently have 10k in an AMEX online saving account accruing 0.6% and 3k in regular bank saving account. Should I just wait until we accumulate 20k or just contribute what we have at this point in time for our 2022 contributions?

[rob]

Since it's 10K each... why not do one of you for 10K now then later for the other (or have both do 5 if you want)....

[exodusNH]

My wife and I contributed 20k in December '21 to our I-bond accounts and are planning to contribute 20k this year. We currently have 10k in an AMEX online saving account accruing 0.6% and 3k in regular bank saving account. Should I just wait until we accumulate 20k or just contribute what we have at this point in time for our 2022 contributions?

Unless that $10k is part of your emergency fund, just do it now. Why not earn 16x the interest for 5 minutes of time?

[afr]

My wife and I contributed 20k in December '21 to our I-bond accounts and are planning to contribute 20k this year. We currently have 10k in an AMEX online saving account accruing 0.6% and 3k in regular bank saving account. Should I just wait until we accumulate 20k or just contribute what we have at this point in time for our 2022 contributions?

Unless that $10k is part of your emergency fund, just do it now. Why not earn 16x the interest for 5 minutes of time?

That 10k is our emergency fund. But I’d rather have it earning 9.6% rather than 0.6%.

[exodusNH]

My wife and I contributed 20k in December '21 to our I-bond accounts and are planning to contribute 20k this year. We currently have 10k in an AMEX online saving account accruing 0.6% and 3k in regular bank saving account. Should I just wait until we accumulate 20k or just contribute what we have at this point in time for our 2022 contributions?

Unless that $10k is part of your emergency fund, just do it now. Why not earn 16x the interest for 5 minutes of time?

That 10k is our emergency fund. But I’d rather have it earning 9.6% rather than 0.6%.

Well, you'll lock it up for 12 months if you put it in now.

[GerryL]

My wife and I contributed 20k in December '21 to our I-bond accounts and are planning to contribute 20k this year. We currently have 10k in an AMEX online saving account accruing 0.6% and 3k in regular bank saving account. Should I just wait until we accumulate 20k or just contribute what we have at this point in time for our 2022 contributions?

Unless that $10k is part of your emergency fund, just do it now. Why not earn 16x the interest for 5 minutes of time?

That 10k is our emergency fund. But I’d rather have it earning 9.6% rather than 0.6%.

But is it a relatively small portion of your emergency fund ... or a LARGE portion? As you know, once you buy the I bond, you will not have access to that money for a year. An emergency fund should be accessible. The nature of emergencies is that you can't schedule them for next year.

[LittleMaggieMae]

well, you have thru the end of Oct 2022 to buy I-bonds and get 6 months of 9%(or whatever it is...) on the Ibonds.

How much will you have saved up by say Oct 1st, 2022 towards the 20K you plan buy in I-Bonds? (you probably don't want to wait til the last minute in October 2022 to buy your bonds - I suspect there will be another "rush" as "new to Ibonds" people try to lock in the 9+% rate for six months... )

You indicate that the 10K (and I assume the 3K in a savings account) is your EF... I assume that's a couple months of expenses. maybe less. I wouldn't want to tie up that money for a year...

Remember that no matter when you buy Ibonds between now and October 31st - you will get 6 months of the current interest rate - which will start in the month you purchase the Ibond(s).

The only advantage to buying now - is that the clock starts ticking on the 12 months hold period.

[afr]

Gotcha!! Thanks for the replies.

[kolarson]

OP said they bought 20k last year. Once those bonds are 12 months old that is their emergency fund.

[GMCZ71]

OP said they bought 20k last year. Once those bonds are 12 months old that is their emergency fund.

Plus 1 on that.
Also you can buy smaller amounts each month starting now, making it like a ladder.

[LadyGeek]

This thread is now in the Personal Investments forum (investment help).

[Raspberry-503]

Yes remember that you cannot access your money for the first 12 months, and 3 months interest after that for the first 5 years. What if you buy iBonds now and have an emergency in July? Neither the Dec 21 or the current purchase will be liquid. If you have other funds you may be OK
You could wait till October to reduce the window until the Dec 2021 bonds become liquid, but what if you get an emergency in November? If you can rely on credit cards, etc... you may still choose to do so, the iBonds earning may be offset by credit card fees so you'd be gambling that you won't have an emergency.