If you're going to get Ibonds, do it before April 27, after that, rates nosedive

[progree]

Buyers rush to get in on I savings bonds before rates plummet in May of 2023, USA Today, 4/18/23

If you buy I Bonds issued in April, you'll lock in the attractive 6.89% that applies for six months after your purchase

If you wait, you'll likely start out with an annualized rate of 3.79% for inflation-indexed bonds issued from May through October, according to Daniel Pederson, a Michigan-based savings bond expert and founder of www.BondHelper.com. We won't know the exact rate until May 1 when the Treasury's Bureau of the Fiscal Service announces the new rates.

... Buying an I Bond before April 27 means you could end up with an annualized rate of around 5.34% for the first 12 months. With compounding it would inch up, closer to 5.39%. The actual rate could be higher or lower. As I reported in an earlier column in March, April 27 is the last day someone can purchase an I Bond and have it issued by April 30,

[but consider alternatives] Several online banks for instance are offering one-year certificates of deposit with annual percentage yields between 5% and 5.25%, said Ken Tumin, who founded DepositAccounts which is now part of LendingTree. The site tracks and compares bank rates. Several brick-and-mortar banks and credit unions are also running promotional CDs with terms around one year and rates above 4%.

MORE: https://www.msn.com/en-us/money/markets/buyers-rush-to-get-in-on-i-savings-bonds-before-rates-plummet-in-may-of-2023/ar-AA1a19Cr

Warning: some banks are cutting their CD rates a bit, you might think about locking in a 3 year or 5 year or longer.

When comparing, remember that a CD in a taxable account is taxed by both federal, state, and local. Whereas an Ibond is taxed by federal, but not by state or local. (I don't think you can have an IBond in an IRA or 401k)

The purchase of Ibonds directly is limited to $10,000 / year. There's also an option of buying an additional $5,000 with your tax refund, but that ship has sailed, at least as far as getting the 6.89% rate.

Always remember that the Ibond rate you land is good only for 6 months. After that, it gets a new rate every 6 months.

And you canNOT sell/redeem/whatever an Ibond for an entire year, no matter what, no matter your circumstances. After that, its a 3 months interest penalty for redeeming before 5 years, which isn't bad (some people go crazy at the idea of paying a penalty, even though it usually only reduces their effective rate only marginally).