With the interest rate on I bonds now down to 4.3 percent compared to the 9.62 percent offered last year, financial advisors see them as better long-term investments, writes Imani Moise for The Wall Street Journal.

The new rate will be valid for I bonds bought for the six months starting April 28.

At the same time, the fixed-rate component of I bonds also increased to 0.9 percent from 0.4 percent, their highest rate since 2007.

I bonds are inflation-adjusted Series I savings bonds that are backed by the United States government. Their interest rate is calculated by combining a fixed rate and an inflation adjustment that is set anew every six months based on economic data. The fixed-rate portion does not change with inflation.

The higher fixed rate is the element that makes this newest I bond issue interesting to long-term investors, particularly considering that the rate has been at or close to 0 percent for most of the last decade. The new rate also applies to the same six-month period.

“This is a great way to hedge against future rate uncertainty,” said Eric Pepper, a financial planner at Northbrook Financial.

I bonds mature in 30 years and they have a 12-month lockup period. Investors who decide to cash out in the first five years have to pay a penalty equal to three months of interest.

And while they will be more popular with long-term investors, I bonds are expected to be less interesting to shorter-term investors considering that rising interest rates are creating more alternatives for achieving higher yields.

Fred Hubler, CEO and Chief Wealth Strategist at CCWMG and forbes.com contributor, sees cash as a bond proxy for some allocations. “With savings rates online over 4% in some places,” says Hubler, “we are increasing our cash allocation, and we are not alone. Private equity has accumulated one of the largest cash allocations in history. This proves to me they want dry powder to take advantage of market dislocations, and we are following suit with our clients.”

To reach more about cash as an asset class, visit forbes.com

“From a short-term investor’s point of view, the I bond is no longer a slam dunk,” said Ken Tumin, founder of DepositAccounts.com.

Read more about I Bonds in The Wall Street Journal.