Scott
I-bonds are a good alternative. But you have to be aware of the restrictions. All can be found on the website, but to summarize: a) you cannot cash them until 6 months have expired, b) if you cash them out before the first five years, you lose 3 months worht of interest..If you hold them, as you cite in your post, for only 1 year, you will not get 4.4%, you will get 3 / 12 months worth of interest deducted from it , c) as you know, these bonds depend on the inflation rate as measured by the overall Consumer Price Index...d) the amount you can cash out at time is, i believe, limited to $1,000.
The new interest rate will be set in the next coming months. And it should be lower than 4.4% since inflation has been trending down recently.
However, they are exempt from local and state taxes, which is always good.
The bottom line is that If you tend to use this money on a regular basis (every couple of months), then this vehicle may not be for you. However, if your expected use of the money is no less than a couple of years, this is a very good "i can sleep well at night knowing that the inflation boogie-man wont hurt me" investment.
I personally will invest in some money in i-bonds for my kids' education fund.
jazzcom, you should read my last post on this thread if you are thinking about investing money in risky certificates. remember the truest of truisms " There is no such thing as a free lunch". Ask yourself this question, Do Mexico,DR,Argentinca,etc pay high interest rates beacuse they like us and they think we are sexy?
mondongo