Send to a Friend

elbanditoroso's avatar

What's your view on CDs and interest rates given that (supposedly) inflation is about to pick up?

Asked by elbanditoroso (30723points) May 31st, 2021

I have a 2-year CD that matures in about a month. I bought it in 2019 before the COVID-19 stuff happened, and it has an interest rate of 1.50% or so.

The local banks are offering insultingly low rates – .03 or .05%. Credit unions are offering .65% for 1-year and .80% for 2-year CDs. The bank-by-mail (that is, internet banks) are similar to but a little lower than the credit unions are offering.

Here’s my question:

Since (theoretically), inflation is going to pick up later this year, would it make more sense to buy a 1-year renewal and then hope that rates are up in June 2022? Or would you get the 2-year renewal now, knowing that by 2023 rates might be considerably higher?

aside: the difference in income between .60% and .80% amounts to about $2.00 per month for this investment, so either approach isn’t going to make me rich.

What’s your take on interest rates for the next couple years?

Using Fluther


Using Email

Separate multiple emails with commas.
We’ll only use these emails for this message.