re: Fixed income: Bonds versus CDs

quote:

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As for bank CDs, I don't quite see the liquidity problem.
Maybe I'm not experienced enough with all of the CD options.
But in the past, early forfeiture of a CD penalizes you 3 months interest.

Does the fact that there is a penalty at all suck? Sure.
But calculate out what 3 months interest is and let me know how much that will sting based on needing to break the contract. My guess is that it would feel like pennies.

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Yep. I just entered that market. Penalty isn't bad at all, and that's assuming I'll need to tap the CD which is highly unlikely.