126 - Series I Bonds: My Inflation Protected Emergency Fund

Mental Models discussed in this podcast: Inflation Emergency Fund Please review and rate the podcast If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience.  Follow me on Twitter and YouTube Twitter Handle: @TreyHenninger YouTube Channel: DIY Investing Support the Podcast on Patreon This is a podcast supported by listeners like you. If you'd like to support this podcast and help me to continue creating great investing content, please consider becoming a Patron at DIYInvesting.org/Patron. Show Outline The full show notes for this episode are available at https://www.diyinvesting.org/Episode126 Series I Bonds Current Yield: 7.12% (through April 2022) Re-rates every 6 months according to an inflation index (not sure which one) Combination of a fixed rate (currently 0%) and a variable interest rate.  Maximum of $10k/year per person.  On a calendary year basis. Available for purchase on TreasuryDirect.gov Emergency Fund Need Liquidity Principal protection Normally lacks inflation protection (nice to have, not a need) My plan: 50% savings account 50% Series I Bonds Take a few years to move into the I Bonds slowly to limit liquidity risks Normal recommendation is 3-6 months of expenses. I like 12 months as a long-term goal.    Summary: Series I Bonds are an inflation protected security issued by the United States Government to individual US Citizens. These non-marketable securities offer interest rates comparable to inflation and are an ideal asset to include in an emergency fund.