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are cd's a good idea?
Posted on 8/22/16 at 7:57 pm
Posted on 8/22/16 at 7:57 pm
i always heard my grandparents talking about cd's coming due...is this something worth putting some money into?
9
Posted on 8/22/16 at 8:24 pm to mandevilletiger34
The return on CDs right now is so low that I would only look at them if I was a very conservative investor with no appetite for risk. Even then, I'd probably look elsewhere.
In the not so distant past, CDs offered a decent rate of return with little to no risk (depending on the issuer).
Off tangent, but we will have the fed to thank when a lot of people like your grandparents lose money when interest rates rise because they've had to chase yield in other instruments.
In the not so distant past, CDs offered a decent rate of return with little to no risk (depending on the issuer).
Off tangent, but we will have the fed to thank when a lot of people like your grandparents lose money when interest rates rise because they've had to chase yield in other instruments.
Posted on 8/22/16 at 8:26 pm to mandevilletiger34
No, the rate on CDs are in the 1-2% range. This doesn't even beat the long term inflation rate so you're effectively losing money by putting money there that you can't readily access for whatever the term. If you just want a temporary place to "save" money, then look into one of the high yield online savings like Capital One 360 at ~0.7% interest. At least the money is always liquid.
Your grandparents are probably remembering a time when CDs yielded 5-6%. However at this time mortgages were also likely in the 8-10% range. People don't always acknowledge the big picture when talking about "The good ole days."
Your grandparents are probably remembering a time when CDs yielded 5-6%. However at this time mortgages were also likely in the 8-10% range. People don't always acknowledge the big picture when talking about "The good ole days."
Posted on 8/22/16 at 8:36 pm to mandevilletiger34
Guaranteed loser for their stated duration. Slightly better than cash.
Posted on 8/22/16 at 9:33 pm to mandevilletiger34
In light of the fact that the national average rate on a 36 month CD is less than half a percent and Ally is offering 1% for a normal savings account, I have no idea why anyone would ever consider it.
Posted on 8/23/16 at 7:13 am to mandevilletiger34
High interest savings accounts. "It's your money, use it when you need it".
Posted on 8/23/16 at 9:18 am to mandevilletiger34
quote:
i always heard my grandparents talking about cd's coming due...is this something worth putting some money into?
Posted on 8/23/16 at 11:00 am to mandevilletiger34
I don't want anything to do with a Certificate of Depreciation
Posted on 8/23/16 at 12:12 pm to mandevilletiger34
As others have said, with interest rates so low, they're not good investments. However, it may be worthwhile to throw your emergency fund into a CD at a local credit union (assuming their rates are higher than what you can find with online savings accounts). This allows the emergency fund to keep up with inflation a bit better than with a regular savings account. The downside is that you'll forfeit some interest if you need to pull the money prior to maturity.
That's about the only way that I'd see it as worthwhile to have a CD right now.
That's about the only way that I'd see it as worthwhile to have a CD right now.
Posted on 8/23/16 at 5:59 pm to mandevilletiger34
CDs - Tying up your money at a rate barely over zero? Why bother?
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