The Treasury Department recently announced that the new Series I bond rate will be 4%, effective for the next six months. While this rate is lower than previous offerings, financial experts argue that these bonds remain a valuable tool for protecting savings against inflation.
Series I bonds combine a fixed interest rate with an inflation-adjusted rate, making them attractive for long-term savings. Investors purchasing these bonds can lock in rates that adjust semi-annually based on inflation, offering stability in uncertain economic times. Despite the reduced yield, the bonds provide a guaranteed return that outpaces inflation, making them a prudent choice for conservative investors.
Experts recommend considering Series I bonds as part of a diversified portfolio, especially for those seeking to safeguard cash reserves. Although the current rate may not be as enticing, the inflation-protection feature ensures that purchasing power is preserved over time.
— new from Barron’s