General Question

seekingwolf's avatar

What are good CD rates? What bank should I go to?

Asked by seekingwolf (9940 points ) March 4th, 2013

I recently inherited a sum of money from a relative of mine who died last year.

I already have savings and don’t need to spend any of these money so I want to put it into a certificate of deposit for a while.

I’m new to this. My current bank offers a 9 month one with a APY of. 40%. I don’t know how often it’s compounded though.

Please help.

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5 Answers

JLeslie's avatar

You should be able to find a better rate than that. Some savings accounts are .9% now. As you shop for rates I would suggest not locking up the money for more than 2 years because it looks like the economy is starting to move, maybe rates will rise a little.

gailcalled's avatar

@seekingwolf: What state do you live in? CD interest rates are all crappy. There are some more profitable yet safe areas to park your money if you have $3000 or more.

If you still live in NYS, check out the Vanguard New York State Long Term triple tax free bond fund. VNYTX is the symbol at Vanguard.com.

seekingwolf's avatar

I’m still in NY, yep. I have not looked into bonds. I will check out that site.

And yeah, I don’t plan to put it away for more than 2 years. I was thinking 9 months to 18 months. I have an “emergency” savings account so even if my car died tomorrow I will not need this money. I will be taking off work for a month for a surgery but my savings will be able to cover that. So I can definitely put this money away for a while.

How do bonds work?

gailcalled's avatar

Read about the Vanguard bond fund at its site. It’s too complicated for me to explain it here, but the fund buys lots of bonds. Then you buy into a piece of the fund. It allows you to write checks if you want. See about when and how to withdraw without penalties. If you can leave it alone for tthe 18 months, the interest will be re-invested and thus compounded.

What’s a municipal bond and how does it work?

What’s a municipal bond fund?

tedibear's avatar

@gailcalled is right, CD rates are bad everywhere. Any rate you find will be well under the rate of inflation so you will be losing money. Definitely look into some other options. You can use a CD or savings account to park your money until you decide.

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