This graph (pdf below) shows the “expected inflation,” the I Bond Base rate and the TIPS base rate plotted over time. A useful rule-of-thumb is "Expected inflation” is the difference between the 10-year T-Bill and the 10-year TIPS rates.
TIPS = Treasury Inflation Protected Securities. Similar to US Treasuries in that they are backed by the US Government but unlike Treasuries, the principal and interest payments are adjusted to reflect the effects of inflation.
I Bonds were once sold and redeemed solely as a paper security, but now they're also available in electronic form. If you redeem I Bonds within the first 5 years, you'll forfeit the 3 most recent months' interest; after 5 years, you won't be penalized.
DISCLAIMER: Answers & my words are general in nature, are not meant as specific investment advice, and do not necessarily represent the opinion of anyone but Kirk. Individuals should consult with their own advisors for specific investment advice. I update my reading on this index monthly in my newsletter [ see http://xrl.us... for a FREE sample of my newsletter and information about how to get on my emailing list.]
I own TIPS and I cover them in my newsletter.