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JLeslie's avatar

Would you buy a CD now?

Asked by JLeslie (59833points) March 14th, 2017 from iPhone

CD rates are going up. My bank will give me 1.25% for 18 months. If I search I can find a better rate, but doing it with my bank is easy.

I wonder how fast the rates will continue to rise?

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16 Answers

CWOTUS's avatar

Oh, sure. No doubt. With all this cash lying around and cluttering up the place, what better use for it do I have?

elbanditoroso's avatar

You can get money markets at 1.25 with more flexibility (purepoint financial). I wouldn’t lock in a CD at this point.

You can 1 year CDs (Live Oak Bank) at 1.35% today, too.

zenvelo's avatar

Based on current Fed expectations, you can expect a rate increase now, and two more before the end of the year.

A money market account that dynamically increases interest rates are a better vehicle in a time of increasing rates. A CD that locks you in at a rate for a period of time is better when rates are falling.

Cruiser's avatar

I am holding out locking up any of my companies funds until rates surpass 3% then I will begin to lock up monies in 6 mo – 1 year – 18 mo increments to ensure some monies will be regularly maturing and available if need be. Personal funds I am currently all in in the stock market and mutual funds. Keeping a very watchful eye on Trump and his policies though. As long as he doesn’t renege on his loosening of regs specifically banking regs I expect this rally will continue for at least the rest of this year.

ragingloli's avatar

Why would I want to buy an obsolete audio format?

Lightlyseared's avatar

What’s a CD?

zenvelo's avatar

^^^^ Certificate of Deposit.

JLeslie's avatar

@elbanditoroso I saw the good rates at Live Oak Bank, and might consider that in addition. The guy who takes care of my bank account called me with the 1.25, and then I googled a little and the one you mentioned.

Where are you seeing Money Markets at that rate?

@Cruiser I should probably be more in the stock market than I am. I’m a reluctant investor.

Zaku's avatar

Oh I thought you meant a CD audio disk. I was just thinking of buying one of those, so yes… um I mean no to what you were asking, but just because I wouldn’t given my own situation.

janbb's avatar

I recently pulled more money out of the stock market because at my age, I am more concerned with security but I am questioning my decision. Although I know the Dow is high, it was my feeling that this was irrational exuberance and that there would be a “croeection” but I am questioning my decision. Any opinions here?

Cruiser's avatar

@janbb Investment enthusiasm from the Pro’s has not been this high in over a decade and the market is responding. Do not follow any advice I may suggest….that said, I discussed this market with my broker after Trump was elected and made some mutual fund and stock pick adjustments knowing the enthusiasm for his proposed relaxation of regulations would fuel a rally that combined with many higher than expected earnings and now robust job reports, this honeymoon is far from over and he/my broker said 30,000 is very possible later in the year.

I don’t remember what motivated me but in Oct 2007 I moved all my mutual fund stock to a retirement account that averaged 3.24% annual return, a month later the crash began and while fellow employees ultimately lost 30–40% of their 401K…mine continued to earn the 3.4% over the next 3 years then I slowly re-entered the mid cap and large cap stocks funds. My point is there are relatively bullet proof funds you can park money in and at least earn double what CD rates currently are.

janbb's avatar

@Cruiser Oh yeah. That’s what I’m in; not CDs. I wasn’t asking about Cds but whether to continue in the stock market since I don’t want to worry at this point and should have enough to last me. I kind of turned the question around.

janbb's avatar

Edit – a “correction” not a croeections”!

Brian1946's avatar

I invested in a Jeff Beck CD in 2011.

Cruiser's avatar

@Brian1946 Very wise investment and one I also did that my sons are reaping huge profits from.

Seek's avatar

I prefer vinyl.

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