If you had 100K in savings what would you do with it

[janine]

I've read a couple places that the inflation part will be 1.82% on May 1. So, even if you lose the .2% you're ahead. But, you've forever lost the .2%, so if the inflation then goes to 2.5% in November and you buy today, you'd be at 2.7% and if you bought in May, you'd only be at 2.5% (assuming it goes back to 0% fixed).. Not sure how to decide!

We have a bunch of EE bonds that were inherited, so are making decent interest now. Good enough to call it part of our emergency fund.

Is there any penalty to selling these or is it liquid like cash. I have my savings in a high yield bank account (whopping .9%), so that's why these instruments hadn't been too appealing so far. Plus I work at a firm where all must be disclosed investing can at times be more pain than it's worth.

Thanks for all the feedback though, very helpful.

[sste]

Yes, check out that link I posted. There is a penalty for selling in the first five years - - it is more significant if you sell in the first year, if you sell in years 2-4 it is pretty minor. For this reason, we are gradually shifting our "extra padding" emergency money to i-bonds rather than making it the core of our emergency fund. I would aim to shift in small yearly increments or every other year to lessen the liquidity concerns. Once you are outside of the five year holding period there is no penalty.

[KrisM]

Is there any penalty to selling these or is it liquid like cash. I have my savings in a high yield bank account (whopping .9%), so that's why these instruments hadn't been too appealing so far. Plus I work at a firm where all must be disclosed investing can at times be more pain than it's worth.

Thanks for all the feedback though, very helpful.

You can cash them in after 1 year, so not a good place to tie up all your money at once. After 1 year and before 5 years, you will lose 3 months of interest if you cash them in. After that, you're good to go.