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Today at the bank, a woman told me to put some of my money in an account in a CD. I have no idea what a CD is. She just said it would acrue interest, no matter how much I had in it over a timespan.
Does that make sense? So basically I would be just earning money as interest by investing in a CD?
Its basically a low risk investment account. Its almost the same as a savings account. Except you have to keep it in there for a specified amount of time - 6mth, 1 year, etc. If you decide to take the money out before that time period, penalties are charged. CD's typically offer more interest than savings.. but a good money market will usually beat it (money markets are not insured though).
What is the rate you are looking at? Many online savings accounts (i.e. ing, citibank) offer some really nice rates (similar if not better than short term CDs).. and your money isn't locked in.
What is the rate you are looking at? Many online savings accounts (i.e. ing, citibank) offer some really nice rates (similar if not better than short term CDs).. and your money isn't locked in.
It's a risk free/IRA- 9 month term.
The rate is 4.31.
They waive any withdrawal penalty, after first six days account term, or the first six days following any partial withdrawal.
A four month term the rate is 4.64, no additional deposits until maturity.
Which one sounds wiser?
It sounds wiser to me to put your money in ING or some other online savings account. Your money is still liquid (meaning you won't have to pay a big penalty to get it in case of emergency) and you can add to it any time you want.
It sounds wiser to me to put your money in ING or some other online savings account. Your money is still liquid (meaning you won't have to pay a big penalty to get it in case of emergency) and you can add to it any time you want.
Actually it sounds like it would be wiser for the OP to use a bank rather than go online.
Talk to your banker. It sounds like she was telling you a safe way to earn more interest. You probably keep a fairly substantial amount of money in a checking or savings account that earns very little interest. If you put it in a CD (certificate of deposit) you can expect to earn 3%-5% which is way more than regular checking or savings. The CD's are insured just like your checking or saving up to $100,000, so the money is completely safe.
Have you done any investing? If not, it would be wiser to simply open an IRA and make sytematic deposits to that. This is for your retirement and it's money not to be touched. A CD is a wonderful instrument, but it is taxable. You didn't mention how much money you were going to put into the CD. You can get a better rate at a credit union, which is easy enough to join in today's world.
Feel free to PM me - I do a ton of investing. Good luck!!
The Roth's are tax free. If I did a CD for a 9 month term, I would be earning $1,939.50 in interest after 9 months.
Right now, I earn $.72 cents a month.
I have been offered to put 5K into the CD, or 2K IRA's...
My bank keeps pushing it, I wonder why..
Today at the bank, a woman told me to put some of my money in an account in a CD. I have no idea what a CD is. She just said it would acrue interest, no matter how much I had in it over a timespan.
Does that make sense? So basically I would be just earning money as interest by investing in a CD?
I'm assuming that you have considered paying off any debt, if you have any, because the savings from paying others interest is much greater then any profit from a cd..
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