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Don’t forget you have to pay income taxes on the money the government inflated away from you!

• thfuran 5y ago
  As opposed to a high yield savings account, which didn't give you interest in the first place but would've also been taxable if it had.
  • seibelj 5y ago
    I just think the band-aid is absurd of the government paying you interest matching inflation which they themselves caused which is then taxed to go back to the government so they can spend it and cause more inflation.
    • dragonwriter 5y ago
      Taxing it back causes deflation (or “counteracts inflation”.) They don't need to tax it to spend it, because the government has essentially infinite borrowing abiliry, so literally all taxing it back does is counteract inflation. (OTOH, giving you the inflation-indexed bond itself caused more inflation, so if your beef is with causing more inflation...)
• brewdad 5y ago
  Like a stock sale, you don't pay taxes on the interest until you cash in the bond (you can, but for most cases you shouldn't). It will be regular income rather than long-term capital gains however. A regular savings account will require you to pay taxes annually as regular income. I-Bond interest is not subject to state or local taxes, so there's a savings there compared to a savings account. If you really hate paying taxes, you can cash them tax-free if you use them to pay for qualified educational expenses. There are income limits for this that probably eliminate the typical poster to this site but for people in the right situations it can be useful.