What’s your recommendation for CD term

LinkedIn boringdude
Jun 10 17 Comments

I’ve quite a bit of money sitting in my savings account laying eggs. I’d rather they lay interest and so plan to make them CDs.

With a high possibility of an interest cut, what do you think would be an ideal CD term?

Too short may result in low interest rates when the CD matures due to fed cut, while too long not only is a longer commitment but also will miss out on future raises. Besides the yield differences between one and five is not much.


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TOP 17 Comments
  • Amazon kudobear
    Wealthfront pays 2.5 with one million dollar insurance.
    Jun 10 4
  • Bayer / IT Genie_22
    Make sure to check Ally Bank 2.20% and Wealthfront 2.51% saving accounts. They beat most CD rates and it’s just a saving account lol

    Think Ally Bank 12month cd is 2.60%
    Jun 10 3
    • LinkedIn boringdude
      Yes but the rates will change with fed rate cuts. So you don’t get to hold on to the high interest rates
      Jun 10
    • Bayer / IT Genie_22
      Your saving account isn’t supposed to make you money. It’s supposed to just be sitting there for a rainy day. Your actual investment money is not in a savings account and/or cds.
      Jun 10
    • Amazon GoGoJ
      If you account for a minimum of 2% inflation rate yoy, you are losing money if your savings account doesn't give you at least 2% returns.
      Jun 11
  • Google base22
    Seems like OP want a guaranteed return without risk even to the degree of rate cut. Saving account is your best bet then.
    Jun 10 5
    • LinkedIn boringdude
      My point is why not a two or three year CD to lock in the current high interest rates
      Jun 10
    • Amazon kudobear
      Yeah personally I think anything below 5% return is losing money. Putting money in sp 500 is much much better than savings account imo
      Jun 10
    • Google base22
      Then do it. What’s the problem
      Jun 10
    • Bayer / IT Genie_22
      OP, look at 12month CD rate from Ally for example it is better than most 2 or 3yr CDs and only really gets beat by some 5yr CDs.
      Jun 10
    • Zillow Group uYVG45
      Rates have fallen quite a bit this year. That fed cut you are referring to has already been priced in upto 0.5% (50 bps). Best bet is to ladder -- spread some across a few terms (1 yr, 2 yr) etc.

      If any of these terms are new to you, read up and you will know how to put your savings to work.

      There are no guarantees about anything. If you want to preserve capital, CDs are a good bet. Most brokers offer CDs too, which you can sell in the open mkt if you decide to get out.
      Jun 10
  • New / Other

    New Other

    Did stuff. Hustled hard. Retired
    This is a lot of thinking going on for a marginal 0.25% decrease in rates.

    On $100k this is $250 for an entire year.

    And no, @uYVG45, while mortgage rates have fallen, Fed funds rates (which govern CDs, savings etc) haven’t.
    Jun 11 0
  • New / Strategy

    New Strategy

    Tesla Motors, BMW, Robert Bosch
    NFCU is 3.1%
    Jun 10 0