I Bonds at 6.73%?

Can someone explain what I’m missing? I can get I Bonds paying 6.73%, buy a minimum of $50 and only have to hold them a year? Am I correct? Why would anyone buy a CD at a bank, or any other kind of Treasury bill or savings bond?
Bank of America, for example, pays 1.78% for a 1-year CD, 3.73% on more than $10,000. E-Trade pays 4.63%
So I’m stupid, what am I missing?

2 thoughts on “I Bonds at 6.73%?

  1. If you redeem the I bond within the first 5 years you forfeit the 3 most recent months’ interest so you wouldn’t be getting 6.73% if you held them for a year, more like 5%.

  2. Five percent is still better than 1.78% and you can buy into them at $50 a shot. Sounds pretty good to me. Are the tax advantages any different?

Comments are closed.