In this insightful interview from the floor of the Fi360 Conference in Nashville, John Sullivan of 401(k) Specialist speaks with renowned economist Dr. Zvi Bodie about what he dubs “America’s best-kept investing secret”: the Series I Savings Bonds, or “I Bonds.”
Dr. Bodie explains that I Bonds are low-risk, inflation-protected savings instruments issued by the U.S. Treasury. He emphasizes their value in any personal portfolio, especially for modest-income Americans. Key benefits include:
- Government-backed with virtually no risk of default
- 30-year maturity with interest that includes:
- A fixed rate (currently 0.5%)
- Plus the rate of inflation, adjusted every 6 months
- Tax-deferred interest—taxes are paid only when bonds are cashed
- No need to hold them in a retirement account
He strongly contrasts I Bonds with more volatile stock market investments, arguing they’re a superior hedge against inflation without the risk. Despite a $10,000 annual purchase limit, Bodie says they’re ideal for emergency savings, outperforming traditional savings accounts in both yield and tax treatment.
Importantly, he offers a “litmus test” for evaluating financial advisors: Ask them what they think of I Bonds. If they dismiss or don’t recommend them, it’s a red flag—they may prioritize commissions or lack deep financial knowledge.
Dr. Bodie concludes by saying he buys them for his own grandkids, showing his confidence in their long-term value.
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