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Old 12-30-2008, 02:10 PM
 
Location: NJ
2,111 posts, read 7,354,693 times
Reputation: 996

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You could have gotten 5 year CD's at a rate of 5% plus. Now, most 5 year CD's are at 4% or lower. OMG
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Old 12-30-2008, 02:18 PM
 
Location: WA
5,472 posts, read 21,917,936 times
Reputation: 6157
Yes, I bought a brokerage 2-year CD a few weeks ago with a 4.3 rate and went to buy another this week and found to get the same rate the term is much longer.
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Old 12-30-2008, 02:23 PM
 
28,453 posts, read 73,510,312 times
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Not a surprise. I have been getting better rates from GNMA funds for years. CDs are just silly -- they don't have any real upside for the purchaser.
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Old 12-30-2008, 07:29 PM
 
Location: Cary, NC
1,036 posts, read 3,727,213 times
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Ummm... of course they are lower. What happens when the government starts offering money for (nearly) free?

Its great, to get us out of debt our government is encouraging us to 1) take on more debt and 2) not save.
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Old 01-01-2009, 07:27 AM
 
706 posts, read 1,188,095 times
Reputation: 438
Quote:
Originally Posted by chet everett View Post
Not a surprise. I have been getting better rates from GNMA funds for years. CDs are just silly -- they don't have any real upside for the purchaser.
Would have much rather had $100,000 in 12 mth CD's in 2008 than in equities.
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Old 01-01-2009, 07:33 AM
 
Location: Where the sun likes to shine!!
20,521 posts, read 27,050,294 times
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Yeah the savers are being punished for doing things "right". The rates are pitiful. They are trying to get people back into stocks. Yeah right. Not yet!
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Old 01-01-2009, 03:53 PM
 
Location: Los Angeles Area
3,306 posts, read 3,558,423 times
Reputation: 592
Quote:
Originally Posted by chet everett View Post
Not a surprise. I have been getting better rates from GNMA funds for years. CDs are just silly -- they don't have any real upside for the purchaser.
Your statement is silly. The issue here is risk, looking at the return in isolation makes little sense. Right now where else are you going to put your money to reduce risk? Even bonds are looking risky right now..(both government and otherwise). If you don't have multiple millions and want to park some of your money someplace with little risk than CDs can make prefect sense, especially right now.

One of the biggest failures when common folk invest is assessing their risk tolerance. When things look good they invest in high risk investments and unload them it drops, the exact opposite of what you should do. They do this because they can't handle the risk associate with the investments, most every day investors would actually do better if they just stuck their money into CDs, federal bonds and other low risk investments. In short there is plenty of upside, when you consider the full picture.


Anyhow, as for as the rates you need to think about the real rate and not the nominal rate. 5% 1 year ago is actually less in real terms than 4% today! Inflation is nonexistent right now! A CD 1 year ago was making around 1% in real terms! Today, a CD is making 3.5~4% in real terms!

So, the reality is that the rates on CDs are doing better today then 1 year ago!! The rates should actually be much lower, but banks are hunger for capital so rates are doing very well in real terms

By the way, ignoring inflation (like ignoring risk) is one of the biggest mistakes people make with their financial thinking.
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Old 01-01-2009, 06:21 PM
 
Location: Lousiana
7 posts, read 15,762 times
Reputation: 13
Lightbulb more to come......

Quote:
Originally Posted by taurus430 View Post
You could have gotten 5 year CD's at a rate of 5% plus. Now, most 5 year CD's are at 4% or lower. OMG
I have worked in banking for 27 years. It is difficult to watch, as those good banks are fighting to keep the new business coming in. While the bad performers are fighting to stay in business all the while luring customers away with high rates on CD's ( that they are loosing money on). Yes 4% is high! Most consumers are not seeing the big picture! Banks want to help the consumer, but the consumer is so busy chasing the proverbial carrot that they don't see that banks are looking to help those who are "relationship" customers! I see it daily, the bank will work to save a "relationship" customer, but not a "single" account holder. It is a two way street!, you need to make money and so does the bank. No you will not get rich OR retire investing in CD'S *Pay attention consumers find a bank that fits your needs, be smart with your finances,( don't over extend your self, pay your bills on time) know your banker ( it helps when YOU need something!) Remember, to the big banks ( paying those high rates 4%) you are just a number! " Do you know who your banker is????"
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Old 01-01-2009, 06:44 PM
 
Location: Lousiana
7 posts, read 15,762 times
Reputation: 13
Default your kidding right?

Quote:
Originally Posted by younglisa7 View Post
Yeah the savers are being punished for doing things "right". The rates are pitiful. They are trying to get people back into stocks. Yeah right. Not yet!

STOCKS are worse than CD's! If you are "the saver" then you have rewarded your self! Congratulations! , You are better off then most of middle America, that has no savings! Who thought that OOOO!, I want that now! Instant gratification! WHAT???? WAIT?, save and buy when I have the money!? Why, when I can charge it, pay interest on it and have it ALL NOW!!!! That is what society has done! Stocks are a way for you the consumer to be involved in a company that you belive will do well enough to reward you!!, or cost you for taking a risk on them when then have done porely. That is a choice, just like YOUR choice to save. Sorry that you see this as a "PUNISHMENT" for having the comon sense to "SAVE"
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Old 01-01-2009, 07:08 PM
 
Location: Lousiana
7 posts, read 15,762 times
Reputation: 13
Quote:
Originally Posted by rcarrillo View Post
mmm... of course they are lower. What happens when the government starts offering money for (nearly) free?

Its great, to get us out of debt our government is encouraging us to 1) take on more debt and 2) not save.
BUT, if consumers were not so materialistic! we would not need to continue to barrow money, to pay and RE-PAY for the "things" that we need to own so badley!!! It is our responsiblity as consumers to take charge of our own finances. The government is not to be blamed for consumers ignorance. I have not heard ONE consumer step up and "say Government Agency ABC held a gun to my head and made me take this loan thay "I" could not aford "OR" that "I" did not understand. Yes they are encouraging us to take on the debt, that is how these companies will survive. This goes for the smallest items to the over priced houses, cars, etc... If you ( companies) hang it out there, you should not be surprise when someone ( good credit or bad) reaches out grabs it and takes it! Oh! so sorry, you wanted EVERYONE to pay it back as agreed? LOL!LOL!
Thank you CORPORATE AMERICA for providing consumers with such horrible products, that has cost EVERYONE!! Take a stand consumers, save and buy it when you have "SAVED" the cash to pay for it! Then buy it!
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