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Author: jbking Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35400  
Subject: Re: Buying Bonds now?? Date: 1/9/2002 2:58 PM
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Greetings avagias,

So would it be a good idea for me to put some of my savings into I-Bonds?

Depends on what you call long term.

Are there any drawbacks I should be aware of?

Well, http://www.savingsbonds.gov/sav/sbicash.htm notes these points:
"You can cash your I Bond any time after six months and get your original investment plus earnings. However, I Bonds are meant to be longer term investments, so if you cash a bond within the first five years, you'll forfeit three months' worth of earnings. "

Thus, for the first 6 months it isn't liquid and after for the next 4.5 years you'd get a penalty that means it isn't really earning the whole percentage you saw as well as the total rate of return changing every 6 months I believe.

Any advantages/disadvantages?? Any info on this topic would be much appredicated

Tax-deferral would be one upside of I-bonds. http://news.morningstar.com/news/MS/Article/0,1299,4227,00.html has more notes and links about I-bonds although it does require registration on Morningstar's site I believe.

HTH,
JB
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