I've been buying Series I savings bonds with my Visa and Mastercard for a while now. If you purchase them with Discover, I have been told that you do not get the cash back. (That is unverified info.) I've gotten miles from these purchases with no problems.

These are Series I bonds, so they have a fixed rate (currently 3%) and an inflation rate (effectively currently 2.92%). The rates are combined to give you the 5.92% rate. These rates are based upon a 6-month lag and are set twice per year in May and November. Therefore, the currently rates are based upon Nov 2000 - Apr 2000.

When you purchase a bond, the fixed rate is set for the life of the bond (up to 30 years). The inflation rate varies as inflation moves around. Why is this important? The current fixed rate of 3% will almost certainly go down next month when it is reset; therefore, it is in your best interest to buy these bonds this month rather than next month if you have the money available. This allows you to lock in the 3% rate.

What if the fixed rate rises a few years down the road? You can always redeem the bonds after 6 months and forego the 3 months interest to lock in the new higher rate. If 5 years have passed, there is no penalty.

This option on future interest rates is one of the most valuable features of the bond.

Sorry for the lengthy post. I sort of do this stuff for a living. Note that few financial planners will ever steer you towards savings bonds since they can't earn a commission. (Some of the better ones will, though.)