Learn me I-Bonds

....this author at PBS is talking about them as an inflation-proof investment vehicle that you can put another $10K/yr into (above your IRA and 401K) . Is he overstating their benefits? do you know of any negatives that he's not listing?

http://www.pbs.org/newshour/rundown/2013/05/the-one-safe-investment-and-why-you-never-hear-about-it-from-financial-advisors.html

I have no clue. I know there are now insurance backed options in my 401k at work. What they do is take out insurance on the lump of change you have at 48 in the account and guarantee you a continued benefit for as long as you live. Like a paycheck.

Edit: ok. They aren't what I thought they were. Google to the rescue.

IIRC he isn't overstating the benefits, however how inflation-proof they are depends on how close your personal inflation rate is to the inflation measurement used to determine the inflation component of the I-Bond interest rate payment.

That said, IMHO they are one of the better savings-type accounts available at the moment. Most CDs etc pay less than the inflation rate used for the I-Bond.

OK, that's good to know

I think they only look good because we're is a really weird financial situation, historically, with rates so low.
The do appear to be unique in the fact that they're essentially a variable time bond. You buy the bond and you decide when it's time to cash it in. That is odd and I see where it could be potentially useful. I didn't read through the full government site, but does the interest compound, or does it just sit? The answer to that really makes all the difference in whether these are a reasonable investment or not.
Edit: I checked, the interest does accrue and is added to the principal semi annually. Honestly, if you're looking for a risk free way to tread water with some of your money, this might make sense. Other things to note are that you pay federal tax on the interest once they are cashed in, but not state or local tax. Additionally, you may not have to pay that tax if the proceeds are used for education which is a nice little loop hole.
These might also make a fairly nice emergency fund if you'll have a little time until you need the money. Set aside $10k and it will always be there waiting.

The Series I bonds are a good safe investment but are not a "get rich quick" investment. You need to hold them for a long time to get the most benefit.

My wife started buying a $100 Series EE bond (cost =$50) every payday back in 1983 and continued to do so until she retired in 2003. Any purchased before 1996 have a guaranteed 4% interest rate, after that they went to the inflation based rate. Some of the early ones she purchased will mature this year and are now worth 4.5 times what she paid for them.

Investment advisors won't tell you about them because they don't make any money off your purchase.

"Reward for risk" is the thing to keep in mind. These are very low risk and therefore very low reward. They do protect your capital, but they won't increase it much, if any in real terms, over their life. Whether they make sense for you depends on your age and your appetite for risk.

When you say "above your IRA and 401k" do you mean they are also tax deferred investments like those two. 'Cause I don't think they are, but I could be wrong.

What I mean is that we don't have 401Ks, and the Roth IRA is limited to saving a small amount of money ($5k/yr???)....I'm just looking at alternatives to put a little more money into.

Yes, they're taxable.