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Illiquid in the sense that it takes a few days to liquidate. One can always get back their original investment with no penalties.
by halbritt 8y ago
Illiquid in the sense that it takes a few days to liquidate. One can always get back their original investment with no penalties.
- oplav 8y agoIs that correct? According to the TreasuryDirect website, you can't redeem a bond within the first year. If a bond is less than 5 years old, you pay a 3 month interest penalty. https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iredeem.htm https://www.treasurydirect.gov/indiv/research/indepth/ibonds...
- halbritt 8y agoThat is correct. It's twelve months instead of six. I was mistaken. Generally speaking an emergency fund should be 3-6 months of income. I justified the illiquid period by moving a third of my fund into it at a time. The interest "penalty" is simply not getting back the interest accrued in the prior three months.