Senators introduce bipartisan legislation to protect savings from inflation

Inflation is at 8.3 percent in the United States. On Tuesday, U.S. Sens. Mark Warner of Virginia and Deb Fischer of Nebraska introduced the Savings Security Act.

The legislators hope the bill will assist Americans in protecting savings accounts from the changes in inflation by increasing the use of I Bonds.

According to a press release, Series I Savings Bonds were created for consumers to invest their savings in something not affected by inflation, but also earn a reasonable rate of return, and be backed by the full faith and credit of the federal government.

“The American people are scrambling for ways to protect their earnings from rampant inflation,” Fischer said in the press release. “I Bonds are one option consumers should be able to leverage. Arbitrary purchasing caps on I Bonds, however, are shortchanging the public from better utilizing the program. Our bill would raise the annual purchasing cap to ensure working families can insulate a greater portion of their savings from the pain of sky-high inflation.”

Series I Bonds, only available via Treasurydirect.gov or through your federal income tax return, were created in 1998 by the U.S. Treasury, and can earn monthly interest for 30 years, or until the saver cashes out.

The Treasury Department now caps annual purchases of I Bonds at $15,000 per person, which includes $10,000 per person per year in electric I Bonds, and an additional $5,000 per person per year in paper-issued I Bonds are purchased through a federal income tax return, according to a press release. The legislation would require the Treasury Secretary to raise the annual cap to $30,000 per person when the CPI-U is more than 3.5 percent. However, the Savings Security Act does not change the $5,000 per person paper I Bond cap.

“We need to take an all-encompassing approach to help families facing high costs,” Warner said. “In tandem with our inflation-fighting efforts, and intervention from the Federal Reserve, this legislation would allow Americans to better shield their finances from the unpredictability of inflation and offer peace of mind during difficult economic times.”