ABQ financial expert: How I-Bonds can benefit you when inflation is high

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ALBUQUERQUE, N.M. — The stock market can be challenging to get a grasp on – but doing so may help with securing your finances and your future.

If you have a 401(k), those are directly tied to the stock market and fluctuations can have an impact on your retirement.

Inflation also ties into your finances with, of course, rising prices, but it’s also making for a great time to take advantage of Series-I bonds that you can invest in as a way to benefit from inflation.

Series-I bonds are securities are backed by the U.S. government and can be purchased through the Treasury’s website. As of October 12, they’re yielding 9.62%, which can only be obtained if you purchase the bond by the end of October.

The only catch is you have to hold on to that bond for 12 months, meaning you can’t touch the money during that time, but the yield is locked in for six of those months. Then, at the end of those six months, the yield will reset.

You can contribute as little as $25 if you invest in an electronic I-bond while paper I-bonds are available in $50, $100, $200, $500 or $1000 amounts. In a year, you can buy up to $10,000 in electronic I-bonds and up to $5,000 in paper-I bonds (with your tax refund, according to the U.S. Treasury).

While you can cash in your I-bond after 12 months, you will lose the last three months of interest. That also applies to any cash-in done after less than 5 years of holding the bond. If you don’t cash it in at all, the I-Bond lasts for 30 years and will continue accruing interest in that time.

The U.S. Treasury website offers more information, including how often a bond earns interest and how to purchase bonds.

You can also watch the video above to hear what David Hicks, of Oakmont Advisory Group, has to say about those bonds.