Is there an investment option available that will help protect cash savings from inflation?

I Savings Bonds are low-risk investments issued by the U.S. Treasury to protect your money from losing value due to inflation. Interest rates on I bonds are adjusted regularly to keep pace with rising prices. With inflation reaching to the highest level within 40 years, many investors are looking for a place where they can put some of their cash savings and not lose purchasing power. The current I-Bonds Rate (May 2022) is 9.62%. An individual can buy up to $10,000 worth of I-Bonds annually. This is per social security number. If you have a spouse, your spouse can also buy I-Bonds up to $10,000. You can purchase an additional $5,000 when you file your tax return. As far as liquidity, one can cash I-Bonds once they have owned them for a minimum of one year. So, you will be locked in for a year. However, if you cash them in before five years, then you will lose three months of interest. I-bonds earn interest for 30 years unless you cash them out before then. One thing to know is that the interest in taxable as federal income tax unless used for qualified education expenses, but will not be taxable on the state or local level. If you are interested in purchasing I-Savings Bonds - visit the treasury direct website www.treasurydirect.gov and create an online account. You can purchase i-bonds directly through this website.  You will need a taxpayer identification number (such as a Social Security number), a U.S. address of record, a checking or savings bank account, and an email address.

Principal and interest are guaranteed by the federal government; however, they are not FDIC insured.  I Bonds’ annual interest rate is derived from a combination of a fixed rate and a variable semiannual inflation rate, which is set based on changes to the CPI-U.  There is interest rate risk and opportunity risk where I Bonds are particularly susceptible during periods of low inflation and the rare instances of deflation. The material presented is provided for informational purposes only. Nothing contained herein should be construed as a recommendation to buy or sell any securities. None of the information in this document should be considered tax advice. You should consult with your tax professional for information concerning your individual situation. Tax services are not offered through, or supervised by, the Lincoln Investment Companies.