According to Bodie, no investment is safer than I bonds, and they should be utilized by “every person with a Social Security number.”
Of course, no investment is perfectly safe, Bodie says. But he can’t imagine a scenario in which the U.S. government wouldn’t be able to pay. Historically, the U.S. government has never defaulted on bonds, he says. Not even during the Civil War or the American Revolution.
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Caveats to consider before buying I bonds
Even though they’re a safe investment and currently paying out impressive interest, savings bonds may not make sense for every type of saving.
Perhaps the biggest caveat of I bonds is that they typically can’t be cashed out for one year, similar to certificates of deposit (CD). That means they aren’t the best place to stash savings that you might need immediate access to, though the Treasury may make exceptions to that one-year cashout rule based on financial hardship, Bodie says. You’ll have to contact the Treasury directly to explain your situation.
