What Is the Penalty for Withdrawing from I Bonds Early?
Learn about early withdrawal penalties for I bonds, including interest forfeiture before 5 years and no penalties after 5 years.
Video transcript
If you withdraw from I bonds before 5 years, you forfeit the last 3 months' interest. For example, if you cash out after 18 months, you receive the first 15 months' interest. After 5 years, there are no penalties for withdrawal.
Questions and answers
Can I withdraw my I bonds anytime without penalty?
You can withdraw I bonds anytime, but if you redeem them before 5 years, you forfeit the last 3 months' interest as a penalty.
What happens if I cash out I bonds after 5 years?
After 5 years, there are no penalties for withdrawing from I bonds, and you receive full interest accrued.
How much interest do I lose if I withdraw I bonds early?
If you withdraw I bonds early, you lose the last 3 months of interest earned before the withdrawal date.
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