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For what rate would you buy a CD?
Posted on 12/2/13 at 12:27 pm
Posted on 12/2/13 at 12:27 pm
PenFed's rates have increased to 2%+ for 3-4 year CDs and 3% for 5 and over. I have noticed just a few months ago they were between .80% - 1.40%. Would anyone consider buying a CD outside of retirement? What kind of rate would be your buying point?
4
Posted on 12/2/13 at 1:44 pm to RickAstley
No. Why would you tie up money for 3-4 years for 2%?
Posted on 12/2/13 at 1:55 pm to RickAstley
quote:
For what rate would you buy a CD?
8%
Posted on 12/2/13 at 2:17 pm to reb13
quote:
8%
Maybe not that high - but, I'd need 6% for multiple years, and 8% for 5 - yeah - I'd take 8% for 5 years.
For a year, I'd go 4% to 5%, somewhere in there.
Posted on 12/2/13 at 3:09 pm to RickAstley
I quit CDs when they fell below 5% for 6 months. Long time ago.
Buy blue chip stocks and hold. Last month I made 3K. Average increase in value over the last 10 years has been just over 2K per month. I haven't taken out a calculator to figure percent per year but it's a LOT more than 1%.
I don't consider it a gamble. Over the last 30 years I have never had a net loss over a 4 month period. Of course, I'm not actually making money since I don't sell. I do DRIPS. I let it sit there. Which is what you're doing with a long term CD.
Buy blue chip stocks and hold. Last month I made 3K. Average increase in value over the last 10 years has been just over 2K per month. I haven't taken out a calculator to figure percent per year but it's a LOT more than 1%.
I don't consider it a gamble. Over the last 30 years I have never had a net loss over a 4 month period. Of course, I'm not actually making money since I don't sell. I do DRIPS. I let it sit there. Which is what you're doing with a long term CD.
Posted on 12/2/13 at 3:24 pm to Zach
quote:
Buy blue chip stocks and hold.
For the most part, that's what I'm doing with my non-TSP investmetns.
quote:
I do DRIPS. I let it sit there.
Yep. Time generates an incredible amount of upward pressure if you do that.
Posted on 12/2/13 at 4:37 pm to Janky
quote:
No. Why would you tie up money for 3-4 years for 2%?
I am thinking in 3-5 years I will be looking for my first house purchase. I am simply examining the best options to set aside a portion of the money I am saving for a down payment.
Posted on 12/2/13 at 4:40 pm to Zach
Thanks Zach (and everyone else), I appreciate the feedback. Buying individual stocks is one route I have not approached yet. Definitely worth considering.
Posted on 12/2/13 at 5:48 pm to RickAstley
Posted on 12/2/13 at 6:20 pm to Janky
quote:
No. Why would you tie up money for 3-4 years for 2%?
Because it would come with a put option in case rates go up, probably 6-months interest, which is better than buying 3-4 yr term bonds or a fund where he would lose principal if rates increased and he wanted/needed to sell. Really depends on what he wants to do with the money. Not like the stock market only goes one direction.
Posted on 12/2/13 at 8:34 pm to tirebiter
cd's are a waste of time for no money really.
my grandmaw made a shite ton of money with them when they were more than 4%. now shes old and the money is draining quickly.
my grandmaw made a shite ton of money with them when they were more than 4%. now shes old and the money is draining quickly.
Posted on 12/2/13 at 8:48 pm to Janky
quote:
No. Why would you tie up money for 3-4 years for 2%?
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