Want to earn some interest? It may sound like someone is offering you something illicit in the midst of the economic crisis but if you choose to buy an I Series bond, you can earn  4.84% through October 31, 2008 for an investment as low as $0 for a paper bond or $25 for an electronic version.  This isn’t a short term investment either, but you can earn interest on your money – the full amount. If you keep the bond for more than a year but less than five you lose 3months worth of interest. The interest on the bonds are not subject to state and local taxes but are subject to federal tax.

This is something that will make people want to add a few of these to their portfolios… “Can I ever lose money in I Bonds? No. They are U.S. Treasury securities backed by the U.S. Government. I Bonds even protect you from the effects of severe deflation—the earnings rate can’t go below zero and the redemption value of your I Bonds can’t decline.”

There is a fixed rate of return for the life of the bond. There are tax benefits for education, even if the bonds are not purchased specifically for educational purposes. Bonds purchased electronically do not have to be in the denominations that are offered on the paper bonds.

The purchase limit for each individual per year is $5000. This would be a good way to add to your nest egg and have an easily liquidated cash product available for you.

I have mentioned I bonds before, but with the plunging Dow, this financial instrument is definitely something you can add to your investment portfolio for as little as $25 online or $50 for a paper bond.