I’ve grown a bit restless with my high yield savngs account (HYSA). Over the last few quarters I switched from CIT Bank and GreenState Credit Union over to OpenBank. My CD term with Greenstate ended. At about the same time, CIT Bank informed me they were dropping the interest rate on my HYSA to 3.75%. I shopped around and found that OpenBank was offering 4.10%. I don’t like rate chasing. However, since I was moving my Greenstate CD money I decided to also transfer my CIT savings account to Openbank.

Two months ago, OpenBank announced they were also dropping their HYSA rate to 3.8%. Disappointing. I’m well aware that the difference between earning 4.10% and 3.8% is not much. On $10,000 the difference would be about $30. So, why bother looking up rates?

IBonds, CDs… really?

I recently suffered a pretty gnarly injury – an unstable Lisfranc. In laymen’s terms, I snapped a ligament in my foot that holds it together and a few bones to boot. (Pun intended, ha!). I had to have surgery to repair my foot. As I recover I’m pretty much bed bound. This has given me plenty of time to think about the low interest I am earning, and cruise the internet in search of interest rate opportunities.

Having to keep my foot elevated for most of the day for several weeks has given me a lot of time to over think things like interest rates I could be earning. So, I started snooping around and found that IBonds are currently offering a 4.26% interest rate. It was one of the best rates I could find. Especially coupled with the benefits of an IBond, so I decided to buy in. My current objective is to hold the IBonds for at least a 12 month period. I’ll revisit my IBond purchase in a year and decide to go from there.

How do IBonds work again…?

The US Treasury Department sells IBonds at Treasurydirect.gov . The website as a whole has gone through a major upgrade. This site used to look like one of those websites where you might just fall for buying counterfeit event tickets.

IBonds are made up of a fixed interest rate (currently .90%) and a variable interest rate based on the semiannual inflation rate (currently 1.67%). You drop these into a formula the Treasury uses and bam you get the current rate! 4.26%. After you purchase an IBond the variable interest rate can change every May 1st and November 1st. The fixed part of the rate stays… fixed until you redeem to the bond or 30 years, when an IBond matures.

You can buy an IBond starting at $25. $10,000 is the max per social security number or employer identification number. There are ways to get around this limit: you can purchase IBonds as gifts, through your business, trust, in your kid’s names, and you can use your tax refund to buy IBonds (only online, paper IBonds went away in January 2025). There are all sorts of fun shenanigans to get around the $10,000 per social security number max. However, at a 4.26% interest rate, I’m not wholly interested in buying a lot in IBonds right now.

Time and Taxes

After purchasing an IBond, that money is locked up for the first 12 months. If you redeem the bond before 5 years, the most recent 3 months of interest are held back as a penalty. Also, as mentioned before, IBonds keep their fixed rate until the bond is redeemed or for 30 years. Which ever comes first.

Also, IBond interest is taxed federally at your ordinary tax rate. IBond interest IS exempt from state and local taxes. This makes IBonds appealing to those in high income tax brackets living in states like: California, New York, Hawaii or New Jersey to name a few. Taxes also aren’t owed on these bonds until the year you redeem them or when they mature in 30 years. IBonds offer the opportunity for tax deferred growth as long as they’re held and haven’t matured.

4.3% CD

I also came across another option with a slightly higher interest rate offered at Genisys Credit Union. This 7 month CD is offering a 4.3% interest rate as of Wednesday July 15, 2026. I really like this option because at 7 months it doesn’t feel like a long term commitment. Plus, if interest rates change or our cash needs change I can reevaluate where to deploy that cash.

You have to be a member to bank here and purchase products like CDs. If you don’t live in a Genisys Credit Union Area or have eligibility via a family member, fear not. A $5 donation to the Arthritis Foundation or the Paint Creek’s Center for the Arts gets you membership.

Genisys Credit Union is NCUA insured, so it’s a safe place to stash cash. When a credit union is NCUA insured it means its backed by the federal government. Same for when a bank is FDIC insured.

Though its a nice yield, there are no tax benefits from bank issued CDs.

Psuedo Banks offering high yields

A word of caution; Be careful of fintech “banking-as-a-Service” or banking middleware services. The most infamous was Synapse FInancial Technologies collapse that left thousands of depositers without their money. People were lured to apps built on Synapse’s middleware. The apps offered high interest rates and/or untraditional usability like making crypto easier to use. However, the underlying structure of Synapse was not FDIC or NCUA insured and not regulated. There was very poor recordkeeping on top of it. It’s unclear if depositers will ever get back what they put in. I personally have avoided these middlemen banking services. I prefer working directly with banks and credit unions. Call me old fasioned. ¯\(ツ)/¯

IBonds and High Yield CDs

I’m not ditching my HYSA. I’m just taking some cash I can tie up for 6+ months and reallocating to earn more interest. Sure, there’s an argument to be made that I’m spending a lot of time chasing a few bucks. However, given my injury and recovery, I have time to spend on that chase.

If you’re looking for a little extra yield on cash revisit IBonds or the Genisys Credit Union CD. Let me know if you see anything else tempting out there!

Cheers!

Mrs. Moneyaire