Compared to most other saving strategies, series I savings bonds offer far better protection against inflation.
The U.S. government backs series I savings bonds. Therefore, if the U.S. government keeps honoring its debt, there’s no chance of default.
I-Bonds are not subject to state income taxes but are liable to federal income tax when cashed in. Additionally, investors may occasionally be tax-free if they use I-Bonds for education.
If you want to use this money as your emergency fund, this could be an issue because you usually want to access your emergency fund immediately.
The variable interest rate on I-Bonds is both a pro and a con. When inflation is high, you can enjoy a much higher interest rate that keeps up with inflation.
There are limitations on the amount of I-Bonds you can purchase in a calendar year. Anyone with a social security number can buy up to $10,000 in I-Bonds annually.