<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by VolleyballFerd:
What I'm asking is whether getting a second 3 month penalty (assuming the new bonds will be cashed before 5 years) outweigh the value of the extra miles?</font>
The second penalty hardly matters. If you time the purchase right (pgary's web site has details) you'll earn double interest for over 2 months. That practically cancels out the penalty: you certainly don't lose 1/4 of 4.66%, or any calculation along those lines. The miles more than make up for the amount that you do lose, even if you value miles very conservatively.
More significant is the fact that new I-bonds have a lower fixed rate than older ones. The longer you hold them, the bigger a drain this becomes.
--ss