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Subject:  Re: CDs vs. Bonds Date:  6/16/2000  4:27 PM
Author:  jtmitch Number:  4213 of 20599

I have only recently started building a "ladder" in preparation for retirement and I am not the world's expert. I have some Treasuries and some CD's. I have no corporate bonds. Since I have only Treasuries among the bonds, one advantage there is that the interest is free from state tax. The advantage of CD's, as I see it, is that they are easier to buy. When you buy bonds you are paying someone a spread or, if going through Treasury Direct, you have to wait for the auctions although there is no spread. With CD's you buy them when you want. Another CD advantage (at least with one bank where I have bought some) is that you can specify your desired maturity date (down to a particular day you would like it to mature) rather than having it mature at the predetermined date of the bond. This is great for building ladders.

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