UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev | Next
Author: ortman Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35351  
Subject: Re: Is laddering CD's best? Or I-bonds? Date: 8/5/2000 2:57 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
However, if I can get about the same interest rate on rotating CD's as an illiquid I- bond,

I-Bonds are completely liquid after 6 months. You don't ladder I-Bonds, as you can hold them for up to 30 years.

In a sense, the I-Bonds would make your cash more liquid then laddering the same funds in CD's.


and given that we do not know what the future will bring, maybe the I-bonds interest rate won't be much higher than the rate of inflation.

The return on I-Bond return is broken into two components - a fixed return and an inflation based modifyer. So, you'll be earning a fixed amount over the rate of inflation for up to 30 years (at least the government listed rate of inflation.)

Even though I-bonds are at a good interet rate right now, maybe they will be at a less than wonderful rate in the future and then I would be stuck, so, maybe CD's are best?

Most of your questions would be answered by the US Savings Bonds site:

http://www.publicdebt.treas.gov/sav/sbiinvst.htm

Also keep in mind - interest on CD's will be taxed every year. Interest on I-Bonds will be tax deferred until you actually cash the bonds in.

If so, any opinions on which CD's are best? Any opinions on Schwab's CD's?

CD's are essentially fungible items - as all are FDIC insured. Given that, the best CD is the one which pays the most interest.

-Ortman

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev | Next

Announcements

Post of the Day:
Value Hounds

Mylan Transitioning from Generics
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement