Invest In CDs Or Put Your Money Into Savings
Should you put your money into a CD or put it into a savings account.
If you are like most people you will answer that it is smarter to put your money into a CD rather than savings because the interest rate is better.
Is it? On average 6 month CDs are only yielding about 4.
49% as of this writing (November 10, 2007) according to Bankrate, Inc.
The rate is decent.
But the caveat is that you have to tie up your money for 6 months or pay penalties for early withdrawal and many of these CDs require a hefty amount money to buy them.
Some require $10,000 to obtain the best yields around 5% -- 5.
40%.
If you have the money and you have the time, it makes sense to purchase a CD and stow away your money.
However, you can still get a very high rate of return on your money, also over 5%, and not have it locked up so tight that where if you want to access it you have to pay severe penalties.
The way to accomplish this is to put your money into an online savings account.
You can be a smart saver and earn a far higher rate by switching to an online bank account.
Be sure the bank is FDIC insured and you can earn a higher return in the same 5% range that CDs are paying without taking on additional risk.
Also, you can usually withdraw your funds at any time without paying penalties.
There are many online banks paying over 5% on basic savings.
The whole online banking industry has recently exploded and the competition is fierce and you are the winner because of it.
You can select from a number of online banks all backed by their well known traditional brick and mortar parents and have the confidence that your money is FDIC insured and easily accessible.
Why lock up your money in a CD for a long 6 months and not earn anymore than an online savings account? Doesn't seem to make sense does it?
If you are like most people you will answer that it is smarter to put your money into a CD rather than savings because the interest rate is better.
Is it? On average 6 month CDs are only yielding about 4.
49% as of this writing (November 10, 2007) according to Bankrate, Inc.
The rate is decent.
But the caveat is that you have to tie up your money for 6 months or pay penalties for early withdrawal and many of these CDs require a hefty amount money to buy them.
Some require $10,000 to obtain the best yields around 5% -- 5.
40%.
If you have the money and you have the time, it makes sense to purchase a CD and stow away your money.
However, you can still get a very high rate of return on your money, also over 5%, and not have it locked up so tight that where if you want to access it you have to pay severe penalties.
The way to accomplish this is to put your money into an online savings account.
You can be a smart saver and earn a far higher rate by switching to an online bank account.
Be sure the bank is FDIC insured and you can earn a higher return in the same 5% range that CDs are paying without taking on additional risk.
Also, you can usually withdraw your funds at any time without paying penalties.
There are many online banks paying over 5% on basic savings.
The whole online banking industry has recently exploded and the competition is fierce and you are the winner because of it.
You can select from a number of online banks all backed by their well known traditional brick and mortar parents and have the confidence that your money is FDIC insured and easily accessible.
Why lock up your money in a CD for a long 6 months and not earn anymore than an online savings account? Doesn't seem to make sense does it?