Totally tax free bonds AAA insured

[outtarentals]

Today I called Schwab to check on the safety of some Private Auction Rate bonds I've been investing in. They are auctioned every week in $25K increments, and they are one of the few totally tax free and AMT free investments out there. They've fluctuated between 3.4% - 3.9% for the past 6 months and Schwab sweeps the interest into their money market sweep fund, currently at around 4%.

Schwab assured me today that they are insured by SSA Financial - one of the few big bond insurance companies who have just been re-rated as AAA. I was getting concerned about the rumors of bond insurance companies having problems. It will be interesting to see what the yield is next week and how this latest interest rate cut by the Feds will influence the yield. The CD rates are so bad right now, and taxable, so I think I'll keep the money there for the moment. Does anyone have any input on these?

[twaddle]

For some reason, they're not discussed here much. Good thread at fatwallet, though:

Retail Cash Management Products FAQ

[outtarentals]

Thanks for that info, Twaddle. I'll read through it - maybe not quite as safe as I thought!