Are I Bonds Right for You?
I came across this article about I Bonds and felt like it was worth sharing.
Like the article explains, I Bonds (otherwise known as Series I Savings Bonds) aren't a fit for everyone, but in certain situations and especially with high inflation, they could be worth considering.
I Bonds are 30 year bonds issued by the U.S. Treasury that pay interest based on two factors: a fixed rate of return, and a variable inflation rate that is calculated twice per year and is based on the CPI-U. Each individual investor can only purchase $10,000 of them (and they are purchased directly from the U.S. Treasury), but they can also purchase up to $5,000 more if you choose to do so with your tax refund. Also, if you have a revocable living trust you could also purchase an additional $10,000.
You have to hold them at least a year, and if you hold redeem them within the first five years there is a penalty of three months interest. But as you'll see in the article, even if you don't hold them to maturity I Bonds could make sense in this high-inflationary environment. While this is a purchase you would have to make directly, I'm always happy and available to discuss the pros and cons of I Bonds and your individual situation.
More information about I Bonds from the U.S. Treasury website.