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Old Aug 8, 2002 | 7:12 pm
  #62  
burgerwars
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Join Date: Jul 2002
Location: Los Angeles, CA
Programs: United Premier, American Airlines
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by gloverfamily:
Which type of bond should one purchase if they are planning on cashing it in 3-months: EE or I?

It is hard for me to tell a real difference between the two. Why should I choose one over the other?

Thanks for your help!
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Probably just pick the one offering the higher interest rate (although rates change every six months). But the way inflation is, the EE bond rates should be exceeding the I bond rates for the immediate future.
Only other consideration is your credit limit and how much you wish to buy. EE bonds are limited to $15,000 of purchases per individual per year, and I bonds you're limited to $30,000.
Also, you have to hold them for six months until you can cash them. But buying them near the end of the month (but don't wait until the last few days), should get you an issue date for that month with interest starting from the first of the same month. So buying near month-end, theoretically you could hold the bonds for five months and a couple of days before you're allowed to cash them in.
One other bit of advice. Make sure you're not carrying a balance on your credit card from the previous month. The way Citibank computes interest (probably similar to AMEX), if you have a continuing balance, some large purchase (like $5,000 worth of bonds), will immediately increase your average balance, and could result in large finance charges you didn't expect. So make sure the account is paid in full for the previous billing period and the billing period you're purchasing your bond in.
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