mat_man[at]ureach.com wrote:
- quote -

I couldn't tell who you were replying to but what product were you
buying by credit card?

I was paying with a cash back CC of 1% and buying about the 26 day
to get credit for the whole month. Don't know if the rules have
changed.

Depending on your tax bracket you may want to consider a tax exempt bond or
MM fund. As an example, for someone in the 28% a yield of 2.55% on a tax
exempt fund is the equivalent of a 3.54% yield in a taxable fund.



<me[at]privacy.net> wrote in message
news:jicua1hgf0b430jiv7f0tpcf0nf6bnfuab[at]4ax.com...
- quote -

- quote -

Interesting

I will chk it out

Like I said..... I'm going back to college and need a
safe place to put this money with no risk of loss

And it would be nice if I could get "some" income off
it

jjj_soper[at]hotmail.com wrote:
- quote -

You can get competitive rates elsewhere (but they may have minimums).

Also, with ING CDs you can actually lose part of the principal if you
withdraw too early and haven't accrued enough interest to pay the
penalty with. With my CU, you can't lose principal, but then again,
the rate is a little lower (3.6%).

Anoop

There's also ING cds as a third option. I bought a 1-year CD at 3.6%
last month and now they're offering 3.7%. Long term bonds rates may or
may not seem pretty low at maturity.

Rich Carreiro <rlcarr[at]animato.arlington.ma.us> writes:
- quote -

You could consider it an odd form of "laddering" inasmuch
as he's going to spread his locked-in "real" interest rates
across whatever the treasury is offering at the time - it
changes every six months and has been as high as the mid 3%
range (it's now a rather smallish 1.2%). (One adds in more
for the "inflation adjustment" part and comes up with a
total yield which is presently, for currently-issued iBonds,
the much more tasty sounding 4.8%. Current earning rate
today on an iBond issued 5 years ago is over 7%!).

- quote -

If current-issue fixed-rates rise substantially a year
from now, it could be worthwhile to cash in one's i-bonds,
pay the taxes and penalty, and lock in the new, higher rate.

But make sure that if you are counting on using iBonds as
any sort of emergency funds or something like that, the
iBonds that you consider to be your emergency funds are
bonds that you have purchased at least a year ago.

With respect to the idea of "laddering" them, it's probably
more in your interest to just buy as much iBonds as you plan
on having allocated to iBonds immediately (or as much, minus
whatever you need as emergency money and buy the rest a year
later when the first batch can be considered emergency money).
If rates rise substantially and it looks worthwhile to cash
out and buy again (paying taxes, possibly penalty), do so
after a year.

Bear in mind, additionally, that if you are talking about
a lot of money, iBonds may not be suitable inasmuch as
one may only buy $30,000 of them each year (or, at least,
that may force one to buy over the course of several years).




--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
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- quote -

I see

But wouldn't I want to ladder them monthly?

So that one is redeemable each month of year?

me[at]privacy.net writes:

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Yes. You'd simply do it by buying some iBonds now,
some 12 months from now, some 24 months from now, etc.

And it's not that they "come due" after 12 months, it's
that they become redeemable after 12 months. They don't
"come due" for 30 years, though they can be redeemed after
one year and can be redeemed w/o an interest penalty
after five years.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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OK

But I could "ladder: the iBonds? yes?

Have one come due every 12 months?

"anoop" <ghanwani[at]gmail.com> writes:

- quote -

Even with the penalty, you come out ahead interest-wise.
You have to be certain you won't need the money for 12 months,
though, since you cannot get it back *at all* for 12 months,
penalty or not.


--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

- quote -

Thanks for help Rich

So I 'could" cash in a bond before 5 year period if
needed.

Id just suffer a three month penalty on interest huh?

me[at]privacy.net writes:

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Yes, you could. But you can't for the first 12 months.

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Correct. The penalty will be figured right in to the
redemption value.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

me[at]privacy.net writes:

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iBonds are savings bonds, subject to all the usual savings bonds rules
(non-negotiable, can't redeem for 12 months, 3 month penalty on
redemptions before 5 years, can defer taxes on accumulated interest, etc.)

TIPS are "Treasury Inflation-Protected Securities". They are
negotiable government bonds that trade in the bond markets.
They can be bought at issue direct from the government and can
be traded via a broker in the secondary market. Selling before
maturity may result in a gain or a loss. Taxes on the interest
cannot be deferred.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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I don't know what TIPS are

- quote -

me[at]privacy.net wrote:
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Yes. This site should answer all of your questions about i-bonds.
http://www.publicdebt.treas.gov/sav/sbiinvst.htm

me[at]privacy.net writes:

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It's true for all savings bonds, be they EE or I.

- quote -

So are you talking about iBonds or TIPS?

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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Is this true of iBonds?

Note I said "I" bonds..... inflation based bonds

"Bucky" <uw_badgers[at]email.com> writes:

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And don't forget that you *cannot* cash out savings bonds
for any reason for the first 12 months after purchase.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

m...[at]privacy.net wrote:
- quote -

I would consider a 4.8% interest rate to be better than 3.0%, so yes.
Of course, the tradeoff is you have to hold i-Bonds for 5 years to
avoid penalty, whereas ING is a savings account.