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    Veteran Member domina's Avatar
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    Default money advice

    Thinking of putting some cash into CDs (1-yr, 3-yr, and maybe 5-yr?), what banks/ credit unions would you recommend i do this with?

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    Featured Member Vamp's Avatar
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    Thumbs up Re: money advice

    If you feel the most comfortable with CDs, do not let anyone talk you out of them. When you go to a financial institution they will try to tell you about other "wonderful" investment options.
    Start where you are comfortable and educate yourself about other options if you have haven't already. I tell my own clients, if you don't understand something don't sign up for it. There may be a much greater risk involved than you realize.

    I would suggest rate and penalty shopping local regional banks and credit unions.
    They are more likely to have rate specials.

    Not all CD penalties are created equal. Some are a percentage of the CD, others it is the interest, etc.
    No one plans on withdrawing funds, but who wants to loose a hunk of the original investment if you do?

    Also by calling them you will see how good or awful their customer service is.
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    Default Re: money advice

    If you have quite a bit to invest I'd diversify. You don't make shit off CDs.

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    Featured Member Vamp's Avatar
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    Default Re: money advice

    That isnt always true....

    I have seen banks offer 5% specials here in the past year. Some banks are looking to increase their cash on deposits to shore up their capitol ratios.
    These specials usually have a small window of oppurtunity. Which is why it is important to rate shop and let banks know you are rate shopping.

    You also do not loose anything with a good CD.

    Im not agaisnt other investments at all. But I think too often people jump into them without understanding the risks and loose ALOT.
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    Default Re: money advice

    Quote Originally Posted by Vamp View Post
    That isnt always true....

    I have seen banks offer 5% specials here in the past year. Some banks are looking to increase their cash on deposits to shore up their capitol ratios.
    These specials usually have a small window of oppurtunity. Which is why it is important to rate shop and let banks know you are rate shopping.

    You also do not loose anything with a good CD.

    Im not agaisnt other investments at all. But I think too often people jump into them without understanding the risks and loose ALOT.
    But you must look at the rate of inflation every year and if the cd rates don't beat it then it's like a glorified savings account.
    “Cook for him like a housewife, fuck him good like a nympho….pay the rent and the car note, he invests in me like crypto”

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    Default Re: money advice

    A 3% loss to possible inflation, is nothing compared to 10%-50% loss from an investment gone bad or a 5%-10% loss due to fees from a brokage account or fund.

    Im just playing devil's advocate here. All of these issues should be considered.
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    Default Re: money advice

    Totally feel ya Vamp

    Which is why it's important to diversify investments like Michelle11 mentioned. And do a little research/educate oneself before investing.

    CDs are the best way to start because they're like the safest ways to invest because you don't lose anything especially if your cd rate is higher than the inflation rate. But I'd definitely spread some of that money around to other investment avenues as well and keep a diversified portfolio this way a loss doesn't hit as hard and it's easier to recoup.
    Last edited by miss.a.p1600; 01-03-2015 at 11:16 AM.
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    Default Re: money advice

    Quote Originally Posted by Vamp View Post
    A 3% loss to possible inflation, is nothing compared to 10%-50% loss from an investment gone bad or a 5%-10% loss due to fees from a brokage account or fund.

    Im just playing devil's advocate here. All of these issues should be considered.
    I've been investing for 25 years and own mutliple properties. 5% is a joke. If you only have say a few thousand ok, then there's really nothing there to diversify but if you have around 20,000 I would.

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    Default Re: money advice

    Quote Originally Posted by miss.a.p1600 View Post
    Totally feel ya Vamp

    Which is why it's important to diversify investments like Michelle11 mentioned. And do a little research/educate oneself before investing.

    CDs are the best way to start because they're like the safest ways to invest because you don't lose anything especially if your cd rate is higher than the inflation rate. But I'd definitely spread some of that money around to other investment avenues as well and keep a diversified portfolio this way a loss doesn't hit as hard and it's easier to recoup.
    Exactly if you have at least 25,000 go to fidelity. They will help you.

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    Default Re: money advice

    I used Fidelity and they provide a variety of CDs with various maturity dates and interest rates. Generally, the farther out the maturity date, the more interest you earn. However, beware of any fees incurred for cashing out the CD before its maturity date.

    I also agree with above comments regarding diversification. If you are thinking of investing your entire savings into CDs, then you risk being "penny wise, but pound foolish." On the other hand, if you are thinking of only investing a portion of your savings into CDs while investing the remaining amount into various other assets such as individual stocks (not my cup of tea), stock mutual funds or ETFs (my cup of tea), bond mutual funds or ETFs, real estate, gold, etc., then you avoid putting your eggs all in one basket. In such instance, if you invested all of your savings in CDs, then you may miss out on potential market crashes, but will also risk missing out on major bull market runs like that experienced these past few years. There are a lot of investors who are sorry they kept all of their savings in CDs while missing out on one of the greatest stock market runs in the last half century.

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