Here’s another idea for S. I apologize for length, it’s really not very complicated.
I’m assuming that since S bought I Bond he has no immediate need for money. If he has more $$ he doesn’t need any time soon, try Fidelity Investment website. It can be another investment firm website (eg Fidelity, TD Ameritrade, etc) but I’m saying Fidelity only because S can create a guest acct using made up credentials that is good for 30 days for the sole purpose of checking out CDs sold by Fidelity. Once in click on Investment Products, then Fixed Income, Bonds & CDs, then click on search investments. Then click on CDs and ladders.
S could choose from a wide range of CDs and maturities. For example there is currently a Wells Fargo CD with 9 month maturity at 2.9% APR. These CDs are referred to as brokered CDs (CDs sold by brokers.) It’s my understanding that banks pay brokers to sell these CDs, so there’s is no charge/fee to buy these CDs.
Next to any CD note if issuing bank is FDIC insured. Also note if a CD is “yes” call protected meaning in case of Wells Fargo 9 mo CD , S gets 2.9 % APR for 9 months as opposed to say Ally Bank‘s 3 year CD at a rate of 3.55 % APR. Ally’s CD is “NO” meaning it’s not call protected meaning if rates drop, this 3.55 APR rate could drop.
Negatives:
the CD rates are APR, not APY, meaning these rates do not compound; In a short term CD, the difference between APR and APY is negligible especially if the CD amt is not that great.
if S needs $$ before maturity, he could sell CD, but at a possible loss, or gain depending at where rates go. S should be sure he absolutely will not need to access funds before maturity. There may be a fee for selling before maturity?
Just like I Bonds, you cannot withdraw interest during CD term and interest may only be paid annually, semi annually.
Positives
When buying CD, S can set up to have money (principal/interest) automatically dumped into a Fidelity money market acct upon maturity where it will stay until S acts (eg wants to withdraw money or buy another CD).
Also at maturity there is no grace period that ends and then locks in and renews CD automatically which may be problematic if S forgets to act during grace period.