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Author: benhancockjr 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 35397  
Subject: Re: CDs? Bonds? Notes? - Where should my money g Date: 2/24/2005 4:03 PM
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Well I'm sure others will be along shortly with much more sage advice; however, I'll take a stab.

We recently sold our home and paid off most of our debt. Our auto loan is at 0% with 53 months left, so we'd like to use this FREE money to earn some interest while the loan is still open.

Is the auto loan the only debt you have? If so, great! Otherwise, you may be better off paying down any deby you have, particularly credit card debt.

We've tucked away the next 18mos or so of payments in an EmigrantDirect MMA earning 3.04% APY.

Just opened an account with Emmigrant as well. Certainly no argument there.

You may also want to consider I-bonds. They're currently paying 3.62% and are exempt from state and local taxes. You must hold them for at least a year, and you forfeit 3 months interest if you cash them within 5 years. The rate of return on i-bonds adjusts twice a year. There are two components to the interest rate: a fixed rate (currently 1% I think) and the variable rate that is adjusted for inflation (I believe this is closely tied to the CPI).
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