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re: are cd's a good idea?
Posted on 8/22/16 at 8:26 pm to mandevilletiger34
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."
3
Posted on 8/22/16 at 8:36 pm to GoldenD
quote:Fair point.
However at this time mortgages were also likely in the 8-10% range.
Posted on 8/23/16 at 5:34 am to GoldenD
quote:
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."
I long for those old days because I'm hitting those "done borrowing, time to save and draw interest days." But I sure appreciated those low interest rates in recent years. My dad was always a cash guy. Bought everything - houses, cars, boats - with cash. If he didn't have the cash for it, he didn't buy it. CDs were the riskiest investments he ever made. He lived off of interest for a long time. Post-Katrina, he's had to go deep into his principal, though he has enough to last his lifetime. Back in the early 90s I tried to sell him on index funds. At the time he said it was fine for me, but he didn't have enough years left to take risks with his money.
Geez - the money he'd have now if he listened to me. Those high interest rates were very kind to a guy like him though.This post was edited on 8/23/16 at 5:35 am
Posted on 8/23/16 at 12:05 pm to GoldenD
quote:
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."
5-6%? Try 14%+ on a 1 year CD at some S&Ls (early 80's). And I think the first time that I got a 30 year fixed rate under 10% was around 1986 or so.
You dang young whippersnappers!
But we understand your point. Also, one has to look at real interest rates, so include inflation as you look at the various rates.
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