what is CDs

[Anonymous]

what are CDs?

I am interesting in getting some? is it worth it?>

[Anonymous]

Anonymous wrote:what are CDs?

I am interesting in getting some? is it worth it?>

Certificate of deposit - insured product that pays a fixed interest rate over a fixed period of time. No risk of loss, but penalty for breaking early. Interest rates have been very low in recent years, and they generally aren't worth the cost of slightly decreased liquidity.

[Anonymous]

These used to be worth it back in the 1990s and even very early 2000s. Many people built a CD "ladder" where they kept on buying them so you'd always have some eligible for cashing out at all times. This was back when Money Market accounts were also worthwhile and when online savings accounts had crazy rates. And before I-Bonds came out.

Now, I Bonds have replaced this, but the downside is that you have a cap on how much you can buy.

[Anonymous]

Right now, they are not worth it. US treasury bonds are paying more interest and are state tax free. You can get them in lengths from 1 month, 3 months, 6 months, up to 30 years. I like the short term ones auto-rolled for emergency fund and short term purchases, and 2 year for longer. Wouldn’t risk longer than 2 year. Yields flatten after that.