Inflation-Linked Savings Bonds (I Bonds)


DEFINITION of 'Inflation-Linked Savings Bonds (I Bonds)'

U.S. government-issued debt securities similar to regular savings bonds, except they offer an investor inflationary protection, as their yields are tied to the inflation rate.

BREAKING DOWN 'Inflation-Linked Savings Bonds (I Bonds)'

Available directly from the U.S. Treasury, these debt securities are an exceptionally low-risk investment suitable for the most risk-averse investor; they have virtually zero default risk and inflationary risk.

While relatively risk-free assets such as these usually offer some of the lowest rates of return, it is important to note that I Bonds are usually exempt from income tax. They therefore provide a more attractive after-tax return.

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  3. Inflationary Risk

    The uncertainty over the future real value (after inflation) ...
  4. Yield

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  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise ...
  6. U.S. Treasury

    Created in 1798, the United States Department of the Treasury ...
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  1. What are "I Bonds" and how can I buy them?

    The term "I Bond" is industry lingo for inflation-linked savings bonds issued by the U.S. Treasury. You've probably heard ... Read Full Answer >>
  2. Are high yield bonds a good investment?

    Bonds are rated according to their risk of default by independent credit rating agencies such as Moody's, Standard & ... Read Full Answer >>
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    The maximum Social Security disability benefit amount for a single eligible person in 2015 is $1,165 per month, but you can ... Read Full Answer >>
  4. What is the relationship between the current yield and risk?

    The general relationship between current yield and risk is that they increase in correlation to one another. A higher current ... Read Full Answer >>
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    In finance, a convertible bond represents a hybrid security that offers debt and equity features and risks. While a convertible ... Read Full Answer >>
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    Municipal bonds are backed by dedicated taxes or revenue sources related to specific projects, or by the full faith and credit ... Read Full Answer >>

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