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I would like to preserve the principle on some retirement money that I have, so I am looking to invest the principle into either CDs or safe bonds like Treasury Bill, Bonds or Munis that are AAA rated. I am looking to preserve the principle for the long term and just reinvest the interest in stock.

It looks like I can get a 1yr CD for 6.5% which is higher than any Treasury investments that I can find. I also looked at tax free Muni bonds but I don't think that I am in a high enough tax bracket for Munis to be better than the CD rate. I have always read that investing in CDs was not a good investment choice because returns are so low. But for a safe investment I do not see bonds beating the CD rate. Is there any reason why I shouldn't put the money in CDs rather than bonds? Thanks for your help!!
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