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Author: Foolferlove 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 35400  
Subject: Re: What is wrong with I bonds for short term in Date: 5/7/2003 12:54 PM
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Question - what is wrong with purchasing I bonds as a short term investment ?

Nothing at all! I think I-bonds today make a great short term investment. Making a 3.5% return (that is exempt from state/local taxes) is not shabby compared to 1-year CDs. Plus, if you don't turn out to actually NEED to cash them in, you can hold them for longer if you wish, or cash them in for EE bonds if the situation warrants.

I recently convinced a friend who had $20,000 saved up for a new car in one or two years to buy $20,000 worth of I-bonds. She'll get a good interest rate, and she managed to get 1% cash back, increasing her effective yield (credit card purchases will be terminated eventually, so don't count on this for the future).

In short, I think I-bonds make a great 1-2 year investment.
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