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It is a good deal. I wouldn't bother chasing minor differences in rates. However, if this is not your liquid asset (since you are tying it up for 3 months), you should consider an I Bond. You're tied down for 12 months, but the yield is substantially higher at 4.80%. Check out:
TREASURY DIRECT # |
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The minimum term of ownership is ONE YEAR, the maximum term of ownership is 30 YEARS. You lose the last three months interest if you cash out before five years, but with rising interest rates, it makes up for the difference in no time. The current rate is 4.80%, last year the rate was only about 3.80%.
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I BONDS use the accrual method, with interest being added to the bond monthly. It’s the interest rates that are adjusted semi-annually. The fixed interest rate is set every six months and determines what the fixed rate of interest each bond will return that is purchased in that six month time frame. The inflation rate is adjusted every six months, which determines how much additional interest is added to the underlying fixed bond rate.
Further info here: http://www.publicdebt.treas.gov/sav/sbirate2.htm # |
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