These days, a yield north of 4% on a safe place to park your cash is a pretty good deal. So Series I savings bonds, which are offering a 4.26% composite rate on newly issued bonds, are worth a look. And because their interest rate adjusts based on inflation, they're especially useful if you want to hedge against rising prices. In April, consumer prices rose at an annual rate of 3.8%, the highest level in nearly three years.
At TreasuryDirect.gov, you can purchase I bonds for a minimum of $25, with an annual limit of $10,000 per person. Backed by the full faith and credit of the U.S. government, I bonds offer an interest rate that has two components: A fixed rate that lasts the life of the bond and an inflation rate that resets every six months based on changes in the consumer price index. Together, they form the composite rate.
