How many of you think CD accounts are a good way to save money?
@theproperator (2429)
United States
March 17, 2007 9:19pm CST
A CD (Certificate of Deposit) is a type of account you can open at a bank and put a fixed amount of money in for a certain length of time. You get a guarenteed intrest rate for that time. The bad part is that you can't take the money out (like for an emergency) without paying a penilty. The good part is that it is pretty much a no-risk investment, since it is insured like a regular savings account would be.
Has anyone here bought CD? Did you get a good interest rate?
1 person likes this
3 responses
@Kicker55 (243)
• United States
22 Mar 07
Cd's are nice but not sufficient. If you just want to save money, then get a savings account, because a cd is the same thing except you can't take your money out for a period of time.
If you want to make real money with a cd, then you need to put in a lot of money. By a lot of money I mean 100,000 or so which could earn you 5,000 each quarter from interest from a 5% interest rate. I'm not sure what best interest rate is, but I'm pretty sure it's not 5%, maybe 4% or close to that.
Another thing to consider is inflation, keeping your money in a savings account or a cd hurts your money in the long run as it will grow slower than inflation. Keep 20,000 in a savings account for 20 years, and that 20,000 is considerably weak as 20,000 20 years from now could be like having 3,000 now a days with inflation.
The best way in my mind is to go grab an annuity, stock market, real estate or something like that. A no risk cd could end up killing your money in the long run.
:-P
@theproperator (2429)
• United States
22 Mar 07
Well, CDs are still better than savings accounts, which are getting about 1%-2% interest tops at the moment. I have about half my savings in a money market (basically a savings account, getting about 1.75% interest) and the other half in CDs, which are earning 5%.
I know I should spice up my portfolio, but I am both lazy and a little scared, since I don't really know how to go about it.
@Kicker55 (243)
• United States
23 Mar 07
Why don't you go buy an annuity or a mutual fund? Their is really no risk their, of course their is risk, but you will make an average of 7-9% probably with those. Otherwise, you buy a cd or put your money into the bank and you are actually losing purchasing power with your money. Inflation grows at a higher percent then the interest on a savings account and the interest on a cd.
If you want to buy a cd, then buy it with a huge sum of money like 100,000 or more. Otherwise it's almost like a waste and by the time your money comes back, it's purchasing power could be weaker.
My two cents, good luck.
:-P
1 person likes this
@musicman6 (2406)
• United States
2 Sep 07
Kicker55 has a good point here, that not even I had thought of, invest in something that gains in value, as time goes on,plus when you sell, sell for a profit! One thing that comes to mind is real estate, it's constantly going up in value! Does anybody else have any mind?
1 person likes this
@Tir_Na_nOg (508)
• Ireland
19 Mar 07
Here in Ireland our government introduced and government incentive saving scheme five years ago. It was introduced as a means of encouraging more people to save money. The maximum amount that could be saved in the scheme was €259 per month. For this we received 25% of what we had invested plus interest. The scheme is now closed and I am now continuing to save my money in a similar scheme. I only have to leave it for a maximum of three months and then I can withdraw amounts as I wish. There is also a good interest rate on it so I will probably leave it there until I retire.
1 person likes this
@theproperator (2429)
• United States
19 Mar 07
Wow, that's a heck of an incentive. I get a match from my company on money I put in my 403k account (retirement) but the interest it has been getting has not been good.
@VotreAmie (3028)
• United States
2 May 07
I have heard about these Certificate of Deposit accounts and I wanted to try one as I find that it is a good idea. As you say it's a guaranteed interest rate as long as you don't withdraw the money for a certain period of time. But until now I never go the chance to open one. I'm interested in this matter and I will read the other answers to your post. Thank you for starting this discussion.
