What are Series I Bonds? and what is current rate?
I Series Bonds are savings bonds issued by the US Government that earn interest based on combining a fixed rate and an inflation rate (CPI index). Currently the fixed rate is 0.0%, However the inflation rate is 9.62%. More details can be found here: https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm
5 Important things to know about Series I Bonds?
can't be purchased through a broker, must be purchased from https://www.treasurydirect.gov (the user experience is very poor as website is very old)
can only by $10,000 of bonds per year (but can buy as gifts for others and minors)
the interest rate is set every 6 months for the next 6 months ( May and October)
the bond matures in 30 years, but you can redeem after 5 years without any penalty (the penalty if before 5 years is the last 3 months of interest
Federally taxable, but exempt from state and local income tax
Your personal inflation may be different
Additional way to Hedge
If you have more than $10,000 that you want to protect against inflation, you can invest in Real Estate (physical property or REITs) because housing is around 30% of Consumer Annual Expenditures (the largest category) making it a reasonable hedge.
Related Posts:
REIT Investing Basics - https://www.unpackinvesting.com/2022/04/reit-investing.html
How much does the average American spend - https://www.unpackinvesting.com/2021/08/spending-too-much-or-too-little_0645791283.html
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