Chetney,

Your idea goes straight to a point that I've made a couple of times in the past to friends. Essentially, it's possible to treat savings bonds like a bank account as long as you work out the issue of the 6 month holding period.

One way is to take your "emergency fund", i.e., the 3-6 months of money meant to tide you over in case you lose your job and put 1/12 of that into savings bonds each month. The idea is to not get caught with all your money tied up in savings bonds and be out of a job. You can tailor how much you put into the savings bonds based upon how the probability of your needing the money over the next few months. Then, you can just roll the money out every 6 months and into new savings bonds.

(Note that by spreading the money out, you are never more than 6 months from having all of your money, and you should have about half of your emergency fund in the bank at any time. Since my emergency fund is supposed to last me 6 months, that should be safe for me.)

You can clearly follow the same strategy for any periodic payments that you have. The key is to know your finances well enough that you don't get caught short in any given month. (There's no way to get that money out earlier than 6 months that I know of.)