The majority of savings rates are not adjusted for inflation. This means that when inflation rates rise, your interest basically gets eaten by the market. One exception to this rule is Series I Bonds, a government bond that is actually indexed by inflation. Here’s an overview of these bonds.

The Basics of Series I Bonds
Series I bonds were created in the late 90s with the express purpose of protecting the owner from inflation. You can purchase a variety of denominations of Series I bonds, notably: $50, $75, $100, $200, $500, $1,000, and $5,000. Investors can purchase Series I bonds at face value.

There are minimums and maximums, however. Investors can purchase a minimum of $50 Series I bonds, and a maximum of $5,000 in Series I bonds annually.  However, you can purchase $5,000 in paper bonds and $5,000 in electronic bonds in one calendar year.

Restrictions and Limitations
You must wait at least one year before you cash in Series I bonds. It’s best to wait at least five years before cashing in your bond, because if you cash in a bond before five years, you have to pay a three month penalty.

You must purchase electronic Series I bonds through TreasuryDirect.  I Bonds offer great interest rates that steadily stay above the inflation rate. This means you are guaranteed to make a good return on your Series I bonds.

Series I Bonds: Slow and Steady Returns
Series I bonds will have fixed rates set by the Fed. Individuals and corporations can purchase Series I bonds, as long as the purchaser is a U.S. resident with a Social Security number.

Series I bonds make a great conservative investment for people who want to ensure that they gain steady returns on their money.

Related posts:

1. For Better Interest, Choose Savings Bonds Over Traditional Savings Rates

Post: Stay Ahead of Inflation with Series I Savings Bonds and Savings Rates taken from: Ratelines.com