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Thumb of Michigan | Just a theoretical question. Asking for someone else.
Lets say someone has $1000 (for example) that can be parked for 5 yrs.
The investment has to be safe. And simple: person doesn't want stock, bonds, or other traded equities. No funds or ETF's can be bought.
Would you recommend a 5 yr CD, or recommend an I bond? Or, something else with insurance or a Govt guarantee?
My bias is that inflation is probably going up, so therefore an I bond will at least keep up with that. But if I'm wrong, theres no floor in the I bond return either.
The problems with a CD (in my mind) is that they won't return enough to keep up with inflation if inflation does happen. The return is than putting the cash under a mattress, but not much better.
TIA | |
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I bond vs CD
