I have about $5000 coming in from a stock sale (ESPP). My plan with it was to invest in treasury bonds (I), since the rate is really good right now (~6.69%). It changes every 6 months (https://www.treasurydirect.gov/savings-bonds/i-bonds/). I see it remaining high for the foreseeable future, but there is no guarantee.

I also have a new car loan ($38K principal, 6.69% interest rate).

PS: I just realised my interest rate and the IBond rate are the same, but these are real numbers.

Loan info:

  • principal: $38.7K
  • finance charges: $7065
  • interest rate: 6.69%
  • term: 60 months

My question - would I be better off investing in treasury bonds or paying down the loan? By better I mean having more money at the end of the 5 year period.

  • @mhoran_psprep updated (6.69%)
    – Is It Me
    Jan 4 at 13:42
  • 1
    "I see it remaining high for the foreseeable future" why? Inflation has been going down, and the i-bond interest uses a backward-looking inflation measure
    – D Stanley
    Jan 4 at 15:19
  • @DStanley was basing it on comments by the Fed. I did not know they used a backward looking measure. That's good to know, thanks!
    – Is It Me
    Jan 4 at 17:29

1 Answer 1


You are probably better off paying down the loan. That guarantees you a 6.69% return immediately since that's the effective interest savings you'll get. With an I-bond, your funds will be tied up for several months (unless you forfeit the interest), and you'll likely get less return in the future as inflation keeps going down.

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