I bonds

[Anonymous]

If you own I bonds, how do they fit in your overall financial plan? Thanks!

[Anonymous]

I really like i bonds. They have multiple benefits for us:

1) they are the bulk of our emergency fund (a safe, liquid alternative that still fits with our investment goals because...)
2) they are one the few ways of guaranteeing inflation protection plus if in the future you decide the interest rate is not competitive you can redeem them without cost
3) they allow tax-deferred investment

So basically they serve both as an emergency fund and as tax-deferred, inflation-protected bonds.

[Anonymous]

Emergency fund, definitely!

[Anonymous]

Do they have to be held 5 years to avoid penalties?

[Anonymous]

There is a fairly nominal penalty of 3 months interest if you cash them between 1 and 5 years (they can't be cashed at all before 1 year).

[Anonymous]

^^ Thanks!

[Anonymous]

Would this be a good place to hold some savings? Better than a money market account.