No. of Recommendations: 3
Since I Bonds are only a couple of years old, historic comparisons are difficult. However, if the rates from a year ago are anything to go by, they compare favorably with CDs. Remember, they're exempt from state and local income tax.

Something else to think about is liquidity. After an initial six-month holding period, you can cash I Bonds at any time. If you cash them before five years, you give up the last three months of interest, still a lot less than you'd pay for cashing out a five-year CD early.
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