CDs Vs. Savings Account - Tilted Forum Project Discussion Community

jorgelito · 09-24-2005, 12:47 AM

So, I was thinking of opening up some CDs cause I have all this extra cash to park. But when looked into it, I found the rates to be not very competitive. The CDs (1 yr) seemed comparable with some savings account. So then, why would I bother with a CD if I could get a similar return but with better liquidity?

I guess cause the rate's locked in with the CD but honestly, I don't think rates will be going down soon (say within a year or so). Some of the CDs were 4.2 but I was thinking of opening a Savings with EmigrantDirect with a rate of 4%.

I guess .2% is fairly negligible and I get liquidity with the savings. But then agian, I don't really need liquidity.

Anyone got any ideas?

Martian · 09-24-2005, 04:18 AM

It really depends on how much you're putting into it. On $10 000, for example, that 0.2% adds up to a whole $20, not really worth worrying about. But on $50 000 it starts to add up a bit more, the 0.2% being now worth $100, all assuming simple interest. Also worth considering is that banks often only insure up to a certain amount; around here it's generally $60 000, so if it's more than that I'd have to go with an insured investment.

Astrocloud · 09-24-2005, 07:06 AM

If you have a permanent life insurance policy -why not just park the money there until you need it? You'll have better interest rates and more control.

09-24-2005, 12:47 AM	#1 (permalink)
jorgelito All important elusive independent swing voter... Location: People's Republic of KKKalifornia	CDs Vs. Savings Account So, I was thinking of opening up some CDs cause I have all this extra cash to park. But when looked into it, I found the rates to be not very competitive. The CDs (1 yr) seemed comparable with some savings account. So then, why would I bother with a CD if I could get a similar return but with better liquidity? I guess cause the rate's locked in with the CD but honestly, I don't think rates will be going down soon (say within a year or so). Some of the CDs were 4.2 but I was thinking of opening a Savings with EmigrantDirect with a rate of 4%. I guess .2% is fairly negligible and I get liquidity with the savings. But then agian, I don't really need liquidity. Anyone got any ideas?

09-24-2005, 04:18 AM	#2 (permalink)
Martian Young Crumudgeon Location: Canada	It really depends on how much you're putting into it. On $10 000, for example, that 0.2% adds up to a whole $20, not really worth worrying about. But on $50 000 it starts to add up a bit more, the 0.2% being now worth $100, all assuming simple interest. Also worth considering is that banks often only insure up to a certain amount; around here it's generally $60 000, so if it's more than that I'd have to go with an insured investment. __________________ I wake up in the morning more tired than before I slept I get through cryin' and I'm sadder than before I wept I get through thinkin' now, and the thoughts have left my head I get through speakin' and I can't remember, not a word that I said - Ben Harper, Show Me A Little Shame

09-24-2005, 07:06 AM	#3 (permalink)
Astrocloud Apocalypse Nerd	If you have a permanent life insurance policy -why not just park the money there until you need it? You'll have better interest rates and more control.