Thinking of purchasing I Bonds -- couple questions

YodaRules in NC

YodaRules in NC

New Member
Location
Close to Lizard Lick, North Carolina
Have my "emergency funds" parked in ROTH with my credit union earning less than 1% and laddered so $6,500 can be withdrawn (with no penalty) as $13K now and $6.5 K annually for next 3 years. Interest on ROTH is taxable both Federal and State. Thinking of taking out the $13K and purchasing $10K I Bond now and another $3K in January (adding $2K from Money Market account). I understand future interest on Bonds are taxable Federal but not State.

My questions are...... can I purchase four $2.5K at one time with the $10K (in the event something happens down the road and I need some funds -- which I do not anticipate)? After 5 years, should I cash in some bonds, am I correct is assuming there will be no taxes at that time?

If it helps, I'm 71 in relatively good health, live in a 55+ apartments, and able to pay all bills with my monthly income with a small amount left over.

Thanks to all who take the time to direct me.
 

YodaRules in NC said:
My questions are...... can I purchase four $2.5K at one time with the $10K (in the event something happens down the road and I need some funds -- which I do not anticipate)?
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That's a really good question. I don't know, this year was the first time I ever bought an I bond and I thought the purchase would result in a bunch of little i bonds but apparently it is just one big i bond.

But, the good news for me if I encounter your scenario of wanting to cash out just some, is that according to their FAQ it appears to be able to cash out a partial amount of an i bond:

How much can I cash at one time?​

Electronic bonds in TreasuryDirectYou can cash a minimum of $25 or any amount above that in 1-cent increments. If you cash only a portion of the bond's value, you must leave at least $25 in the TreasuryDirect account. Redemptions are comprised of principal and interest. (In a partial redemption, we pay interest only on the partial amount you cash.)
 

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