Can I-bonds work as a tier of my emergency savings?

I-bonds can serve as a deeper tier of emergency savings, not your front-line cash. Issued by the U.S. Treasury, they earn a fixed rate plus an inflation-adjusted rate that resets twice a year, so they protect purchasing power against inflation. The catches: you can't redeem them at all in the first 12 months, and if you cash out before 5 years you forfeit the last 3 months of interest. There's also an annual purchase limit of $10,000 per person electronically. That lock-up means I-bonds shouldn't hold money you might need this month — keep your first 3–6 months in liquid savings. But for the layer of reserves beyond your immediate cushion, I-bonds offer inflation protection plus the same federal-government safety as Treasuries, with interest exempt from state and local tax.