Re: TIPS - What happens if you need to sell them
Ah ha, you now see the problem with TIPS. *I-Savings bonds are a bit more flexable. *
From the treasury website:
You can cash Series I bonds after 12 months. When you cash the bonds, you will receive the original investment plus the earnings. However, I Bonds are meant to be longer-term investments. So, if you redeem an I Bond within the first five years, there is a 3-month earnings penalty. For example, if you redeem an I Bond after 18-months, you'll get 15 months of earnings.
The 3-month earnings penalty would be cheaper than transaction costs of TIPS. *