I'm debating with my self to invest in a 5 year cd which I found maximum pays 3.55% or Ibonds. Ibonds currently pays 9.62% and in my opinion the inflation is going to come down gradually not suddenly so 9.62% rate also will come down gradually , may be next year they might declare 6% and following year 5% and so on.
Now in 5 year cd @3.55 × 5 , so that's total of 17.55% and let's say with ibonds 8% for next 12 months and than ave 7% following 12 months, 5.5% average following 12 months so in 3 years my total return is already more than (8+7+5=20%) 5 years cd. And the 2 years money left in I bonds whatever I make is my extra profit. One more thing about early withdrawal penalty. In 5 year cd its 180 days of interest whereas in ibonds its 3 months of interest in case if I ever need money.
Please share your thoughts on this strategy.