Soaring interest rates in the U.S. have boosted the cost of everything from mortgages to credit cards, socking households still hurting from the high inflation. The silver lining? It's also significantly boosted interest rates on savings accounts and CDs.

Another investment savers may want to consider that has benefited from the upward drift in rates is Series I savings bonds, known as "I-bonds." The U.S. Department of Treasury raised the rate on I-bonds last week to 5.27%, up from 4.35% in January. 

For more on where savers can get a bigger bang for their buck, See Managing Your Money:

• 17 high-yield savings accounts offering the highest rates right now
• Highest interest rate savings accounts to open now
• Why you should open a long-term CD with interest rates on pause

I-bonds today have "a great interest rate," WalletHub CEO Odysseas Papadimitriou, the CEO of WalletHub, told CBS MoneyWatch, while noting that buyers should be comfortable holding them for at least five years. That's because an investor loses the interest generated from the bond over the three months prior to selling it if it's cashed out before the five-year mark. 

I-bonds are a good investment as long as inflation remains high, Papadimitriou said. But if the Fed continues to pause its interest rate hike like it did in September, the lure of I-bonds could vanish, he said. 

"It's very hard to predict the future," Papadimitriou said. "If someone had a crystal ball and say 'Oh look, inflation is going to keep going up for the next few years and it's not going to come down,' then maybe an I-bond is a good idea."

Typically a niche investment vehicle, I-bonds have exploded in popularity in the last two years as inflation has soared. I-bonds have a minimum amount someone must invest and a maturity date like regular bonds, but their interest rate adjusts twice a year. 

The Treasury Department changes the interest rate on November 1 and May 1, and the rate is calculated based on the rate of inflation over the previous six months. When the new interest rate is announced, it applies to every I-bond issued prior to the announcement date and is good for six months, until the next rate is set. 

Buying I-bonds can still a good option for people seeking a safe place to grow their money or if they have a major expense approaching in the next several years, such as a wedding or funding a child's college education, said Elizabeth Ayoola, a personal finance expert at NerdWallet. She added that it may only make sense if you're willing to leave your money in an I-bond for five years, given that the interest penalty vanishes at that point.

"The main key is, how long do you want your money tied up," she said. "It's also ideal for people who have a low risk tolerance and are scared that something could happen to their money in the (stock) market." 

I-bonds earn interest every month and compound it every six months. However, the interest isn't actually paid out until the bondholder cashes out the bond, or at the end of its 30-year lifetime.

In:
• Bonds
• United States Department of the Treasury

Khristopher J. Brooks

Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.

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