Share your insights or perspective on the financial matter presented in the input.

Where do I-Bonds fit into personal finance plans?
tl,dr: I-bonds do not fit well into most personal finance plans. First the questions (succinct reference): I like your thought process weighing your liquidity and risk versus your return.  This is very important.  However, I think you might be sidetracked a bit by I-Bonds.  I-Bonds are not generally good for personal investment as they are not marketable when necessary, have redemption penalties and hold lower overall yields in general.  Finally, they are significantly harder to trade as you can buy and hold a TIPS ETF and get exposure to all maturities and get the current competitive rate all in one purchase. Inflation protection is in general an interesting problem.  While inflation-protected bonds sound like they are great for inflation protection (after all it is in the name), they may not be the best instruments for long/medium term protection.  It is really important to remember that inflation protected bonds have significantly lower returns and one form of inflation protection is to just have more money in the future.  TIPS really protect against large inflation changes as normal bonds have the future expected inflation already baked in their higher rates. Also, when you own a stock you own part of a company and inflation will increase the value of the company relative to the inflated currency.  Foreign stocks can give even more protection if you think inflation in your local currency is going to be higher then the foreign currency.  Stocks in the past have had significantly higher return overall than inflation protected bonds but have higher risk as well. As a medium term, low-risk portfolio, it is worth looking into some combination of TIPS, normal bonds and a small to medium allocation of local/foreign stocks all done through low-fee mutual funds or index ETFs.