I Bonds

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An inflation-indexed savings bond offered by the U.S. government. Series I bonds pay a fixed interest rate that is lower than the rate for EE savings bonds, but they also pay a variable rate that increases with inflation (as measured by the Consumer Price Index) and is recalculated semiannually. Series I bonds pay interest for up to 30 years, but there is a penalty equivalent to 3 months of earnings for redeeming the bond before 5 years.