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Is it Time to Sell Your I-Bonds? Thumbnail

Is it Time to Sell Your I-Bonds?

Posted by John Posey

Did you buy some I-bonds in the past year or more – maybe when yields were north of 9%? Well, those I-bond rates have since cooled off to 4.3% from May to October and are scheduled to reset to 4.36% in November. If you have held I-bonds for more than one year, you may make a redemption (and forfeit interest from the previous 3 months – see previous post, Series I Savings Bonds for more info on the details).

With approximately one-year rates on CDs and treasuries ranging near 5.5% or better as of October 2023, there are some materially better yields in other cash equivalent securities. It would be wise to start shopping around for alternatives if you have I-bonds that have been held for over a year.  

Here are a few other questions that may be passing through your mind on occasion:

Are the rate hikes over? I doubt it. It seems quite probable future hikes are on the way, however, I wouldn’t expect it to be as nearly as aggressive as we experienced in the past 18 months. With that said, I think the Fed would like to level out rates as soon as inflation shows strong evidence of staying under control to hopefully avert an overtightening that could cause a recession.

Is a recession on the near horizon? I don’t know, ask me again in 6 months to a year :) . Each day that passes without strong evidence of economic carnage, I get less convicted that it’s coming. That certainly doesn’t mean it isn’t – my market forecasting skills are suspect at best. 

Wise investors know all too well that tough times eventually pass. Whether you profit from that fundamental truth is rooted in discipline.

Advisory services offered through Plains Advisory LLC, an investment adviser registered with the State of Nebraska. Insurance products and services are offered and sold separately through John Posey, a licensed insurance agent. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Any information provided is designed to provide general information on the subjects covered, it is not, however, intended to provide specific legal, tax, financial or investing advice and cannot be used to avoid tax penalties or to promote, market, or recommend any plan or arrangement. Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness.  All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.