Putting Money Into CDs?
 

How many of you are investing your money in CDs and how have you done with them? Taken money out too early? Five years can be a long time to store money away... What's your interest rate? And any other thoughts or comments... would be appreciated.

how much money? Ing direct electronic orange has 3.4% for over 100K which is better than most cds are doing now.

http://home.ingdirect.com/products/p...ElectricOrange

I've been reading about this a little lately and the consensus seems to be that CDs are typically best for older people that want low risk investments. But, I don't know much about it first hand.

1# get a "Roth" IRA

Right now my CD options are bringing in as much as a roth. The other thin is I need to be able to get at my money from time to time, so Im going at 1 year ones.

precious metals

CDs are stupid, especially now a days, you get 3% now? that doesn't even cover inflation, so you actually end up losing $$ each year...

Do what's called a ladder. buy 1,2,3,4 and 5 year cd's in equal amounts then roll over the latest into a 5 year. Soon you will be getting 5 year rates on the whole thing but won't have the liquidity issue.

:2 cents:

No point opening a CD when you can still get nearly 4% on an online savings account with instant access and no withdrawl penalties.

Where can you get 4% for a basic savings account?

woj, can you explain more about how you lose money due to inflation? I don't get that, I did read about that. But I didn't understand it. I figured anything is better than 1% which is what most savings accounts offer. I thought all only offered 1%. I'm not one to take risks, that's why I was looking to open a CD.

if inflation is 4% per year and you only get 3% from your CD your money isn't making enough to cover yearly inflation rates so you lose 1%. think of it this way, buying a house 20 years ago compared to today is totally different. with $100,000 dollars you could buy a mansion in the past, but can barely buy a trailer home nowadays with that. that's inflation.

Here is the thing. if you don't plan on reinvesting or needing that money, and it is just going to sit in your savings account of 1% then a CD is better than just letting it sit in your savings account. CD's are a really low risk investment but don't give you much in return. I would try finding a money market account to put your money in. The rates online are the same or sometimes better than CD's and money market accounts are very liquid, they let you right checks and withdraw money without any penalties. Check out E-Trades money market account.

Thanks. I actually do understand what inflation is, but not how it pertains to a CD. It's still hard to understand why it's possible not to earn any money with a CD if inflation goes up. If the CD is for 3.50% and I keep it in for a year I will make a small gain. How can it not make money if inflation rises during that same year? I'm still going to make interest off this money.

Yes, you are correct. You still make 3.50% from the balance of your CD. The poster who was talking about inflation is just looking at it in a more advanced way, suggesting he would want to put his money in investment vehicles that make more than the yearly inflation rate. If your not concerned about inflation then just ignore what he posted.

Again though, you should check out money market bank accounts. They give you about 3-4% interest on your balance and it's just like a regular checking or savings account at a bank. For a 3.5% interest for a CD you would have to get 5 years or longer terms, not very liquid if you need the money all of a sudden.

this is about 3.5% and is a savings account.

http://home.ingdirect.com/products/products.asp?s=EOHP

exactly. But the problem is the real inflation rate is near 12 to 15% or higher.

No CDs for me. I shop @ itunes :)

j/k
Savings account at http://www.kaupthingedge.com pays a whopping 5.65% here in Germany. Even better rates in the UK I believe.

Sure you wont get 4% on a basic online savings account.

I guess i thought you were referring to a fairly reasonable amount that you wanted to put away but, just not for 5 years. There are still online savings accounts that will get you circa 4% if you qualify for those tiers.

If you got 5 years time frame..
Just go with a 5 year corporate bond ... AAA ratings something like Exxxon debt or Lockheed Martin! (im actully not sure if they have AAA or not but you can check with your investment advisor)

You should get 5% yield +.

Putting your money into a CD is a dumb fucking idea. You won't even offset the inflation. See the link in my signature, a much better idea.

I don't buy CDs or have a savings, 3-4% returns? LOLOLOL

I am up 23% with the Stock Market this year and 14% last year....

Of course but, the stock- market really isnt the place for a persons emergency reserve or shorter term savings though. I think thats what this guy was getting at.

Currency is not synonymous with wealth. Inflation is created to confiscate wealth from you. And today the real rate of inflation is over 10%. So if your money is not making more than than that, you are losing wealth.

getting 3.5% right now from capitalone.com

i get 3.3% from wamu.com

and I alsio have a 5.1% high interest checking at a local credit union

Well, your "emergency reserve" shouldn't really be invested in anything.

hm...
it's a pity that % decreases all the time

Seriously - the last place you want to turn for financial advice is GFY.

BofA has nice options with short term, no penalty CD's that I have been using for a couple years.

I haven't had a CD in 25 years. I keep my liquid money in a money market and non-liquid in real estate. The MM rates have been decent and there are times when I need to move money around FAST so having it in a MM and not a CD has probably saved whatever .5% interest the CD makes over the MM.

I just put a little money away for my niece's 1st birthday for her college fund for 3 years at 4.05%