Need a safe place to put your cash without worrying about inflation? According to retirement consultant Zvi Bodie, “[Inflation-protected U.S. savings bonds (or I bonds)] are the best kept secret in America.” I bonds are rarely discussed because you can only purchase $10,000 per year and financial advisers cannot collect a commission or charge any related expenses. They are available exclusively from the U.S. government (see TreasuryDirect.gov).
Economists say there’s no such thing as a free lunch, but I bonds offer a guarantee from the U.S. government that you can recover your original capital plus any increases in the official cost of living along the way. The only catch is that this isn’t an all-you-can-eat buffet: The maximum purchase is $10,000 per year per account holder (unless you elect to take your tax refund in the form of an I bond).
Introduced in 1998, I bonds were conceived to provide primarily small savers with a positive long-term return after inflation. Their yield consists of a fixed rate for the 30-year life of the bond and an inflation rate, which adjusts semiannually. The current 3.54% applies to I bonds issued until Nov. 1, 2021 and will reset every six months unless the official government rate of inflation stays constant.
Please see the full article, published in the WSJ, for more information.