Series I bonds are worth a buy

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Are you unhappy with the low interest rates on savings and CDs? The federal government could help you temporarily earn close to 2 percent on your money.

In the past, I’ve spoken with great enthusiasm about Series I U.S. savings bonds. Throughout the late 1990s and early last decade, they were a phenomenal deal. If you bought I bonds during the sweet spot, I advise you to hold those notes for the full 30-year term.

Series I bonds have a two-part interest rate. There’s a fixed rate that today sits at zero. Then there’s a floating rate based on inflation — that’s what the “I” in Series I stands for. During the next six months, that floating rate is .88 percent, which is 1.76 percent annualized over 12 months.

So at this point, it does make sense to take money you would otherwise put in savings or CDs and buy Series I savings bonds at SavingsBonds.gov.

Just know that the rate resets every six months. So what I recommend today could change six months down the road. But if you like the sound of this deal, jump on it now.

With Series I bonds, you face a 90-day interest penalty if you cash them in before five years, much like with a CD. (The minimum hold period is 12 months.)

But paying that penalty could be worth it if CD and savings rates take a jump shortly down the road. Though that’s not likely, nobody really knows what the future has in store. You will need to see what the reset rates on your Series I bonds look like and then decide if you want to bail or stay put.

I’ll be here to give you more guidance as the future unfolds.