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Reply to "What to do with $200,000 for two years if you're risk averse"
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[quote=Anonymous][quote=Anonymous]What would your rate be for a longer term CD? The difference in the rate may be enough that it makes up for the penalty for early redemption. For example - if your penalty is all dividends for 6 months (Navy Fed conditions for early withdrawal of more than 1 year, less than 5 years early) then it may be worth it. If you have a 2 year at 1.25, that yields 5031. If you take a 6 year at 2.3 (NFCU current 6yr rate) the yield for 2 years is 9305, penalty of 2311, so net 6994 for an extra 2k return. Given your high 2 year rate, your 6 year rate may also be higher, so potentially a larger difference. [/quote] OP here, this is the advice I need. Thanks to you and the other PP with a a similar suggestion. I can get a 2.27% interest (2.3% APY) CD for six years, with 270 days of interest penalty for early withdrawal. Can someone explain to me if that would make sense?[/quote]
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