In a rising interest rate environment EE bonds are better and safer than CDs. EE Bonds are liquid after a year and the penalty of 3 months interest is more reasonable than that of most CDs

That's my thinking.

If you are laddering, i.e., putting new money into US Savings Bonds or FDIC Guaranteed 5-year CDs (as US Government "safe" savings), this is not true. You will get new interest rates on new CDs and be rolling over old ones every five years. If you do this, it will take about 15-20 years, despending on tax bracket and state taxes, for the tax advantages to add up from US Savings bonds. (Technically, the comparison should be between laddering 5-year treasuries and EE bonds, but 5-year CDs are similar to 5-year treasuries).

I guess I misused the turn laddering. Not planning on rolling over. I like the fact that if I REALLY need the money the penalty is minimal and access to it is nation wide.

If you are just doing a lump sum, you will be better off with EE bonds if interest rates go up enough soon enough during next 5-year period to cover lower starting interest rate. But if you are looking at long term savings, mostly we drip money in slowly.

That's what i'm doing...buying x amount every year with a view towards maturity.

gnos