Comments on: Some Readers Favor CDs, Some Think It’s A Dumb Idea

By: Money Hacks Carnival #31 â€” Crisis And Bailout | TheOnlyDevice.com

Money Hacks Carnival #31 â€” Crisis And Bailout | TheOnlyDevice.com — Thu, 09 Oct 2008 17:40:04 +0000

[...] Some Readers Favor CDs, Some Think It?s A Dumb Idea at No Debt Plan. [...]

By: Money Hacks Carnival #31 — Crisis And Bailout : Moolanomy

Money Hacks Carnival #31 — Crisis And Bailout : Moolanomy — Thu, 25 Sep 2008 02:54:11 +0000

[...] Some Readers Favor CDs, Some Think It?s A Dumb Idea at No Debt Plan. [...]

By: The Certificate of Deposit Debate Rages on! | My Journey to Millions

The Certificate of Deposit Debate Rages on! | My Journey to Millions — Mon, 15 Sep 2008 23:21:45 +0000

[...] Some Readers Favor CDs, Some Think It’s a Dumb Idea [...]

By: Start-Up

Start-Up — Mon, 15 Sep 2008 21:13:07 +0000

Now that I think about it some more, I’m even more inclined to use CD Laddering once I have an emergency fund. The risk of having to make a large payment can be mitigated. I recently opened an AMEX credit card that has a 0% rate for three months, which would be enough time for my CDs to mature to pay off the debt before the rate increases.

I will always be one of those rate chasers. The difference between a 3.75% return vs. a 3.0% return might not be significant, but I will always take the option for more money.

By: Russell

Russell — Mon, 15 Sep 2008 20:50:45 +0000

In a true “emergency” I think getting the last 1/4-percent out of my investment would become a secondary concern. The CD penalty for early withdrawal is often expressed as some number of months interest, and I’d think of it that way. If the roof had blown off the house three months earlier with a non-penalized withdrawal it would be the same effect.

Emergencies like the refrigerator stopped working, or the TV quit during football season, are easy to handle with no penalty. My refrigerator and my washing machine were interest-free from Sears if paid for within 12 months. Most of the home-improvement and large-appliance stores have similar offers. It gives plenty of time for those timed investments to mature and make the payments.

I used to have several overlapping CDs so that every month or two one would be available. I’ve still got one that’s been renewing for a long time, and I’m rebuilding an emergency fund into normal savings at the same local bank. I’ll decide later if I want to transfer from the savings into CDs again. I like the CD because of the guaranteed earnings, and it’s stuck there where I won’t touch it. Sometimes I need to protect against myself.

By: Ashley @ Wide Open Wallet

Ashley @ Wide Open Wallet — Mon, 15 Sep 2008 14:36:10 +0000

We keep the bulk of our e-fund in a 6 month cd. About $7,000 out of 11,000. I’m not sure off the top of my head how much more interest we earn over a savings account, but it’s more so why not grab it?

We ended up doing that because I wanted to move our efund to an online savings account that was earning about 5% at the time. My husband didn’t like the idea of our money not being at a local bank. He wanted to be able to walk in and get cash in hand if we needed. So we compromised on the CD. It was earning 5% and we got to keep the money in our actual B&M bank.

By: Matt @ Steadfast Finances

Matt @ Steadfast Finances — Mon, 15 Sep 2008 13:44:09 +0000

Agree w/ you 100% that CDs are great ways to help you save. One year CDs staggered to expire every 3 months is an awesome idea for your emergency fund. Especially if you need that “something extra” to mature.

My only issue with CDs right now are those high yield saving accounts offering rates higher than any CD I’ve seen to date. Highest one I’ve seen to date is 5% @ 1 year CD at WaMu, but I think I’ll stick to my my 6% high yield savings account. It’s not guaranteed for any specified period of time… so I’m taking some risk but I think it’s worth it to stay liquid. Then again, I’m one of those evil minded traders!