CD laddering

Discussion in 'Homesteading Questions' started by motivated, Sep 13, 2006.

  1. motivated

    motivated Well-Known Member

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    Is anyone here familiar with this? I am trying to find a calculator for this. It seems the better interest rates are with "online banks". Any pros or cons to this?
    Thanks
    Jodi
     

  2. Michael W. Smith

    Michael W. Smith Well-Known Member

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    A better option might be a money market account. You must invest at least $3000.00 to open an account but here are the rates of return:

    Name Yield YTD return

    Admiral Treasury Money Market 4.92% 3.18%

    Federal Money Market Fund 5.04% 3.26%

    Prime Money Market Fund 5.12% 3.31%

    Treasury Money Market Fund 4.75% 3.08%

    CA Taxexempt Money Market 3.20% 2.26%

    At least in a money market you have access to your money right away. And as the interest rates rise (if they continue to do so), the money market rate rises as well with your money not "locked in" to a rate. (Of course, the same is true if interest rates go down as well.)

    Vanguard is a wonderful company to invest with, and you can invest by mail or over the internet. Withdrawing money is the same way, and if you would need money you could cash in part of your money market from Vanguard and have it sent electronically to your bank account.
     
  3. agmantoo

    agmantoo agmantoo Supporter

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    I second the money market versus the cd route. With the money market you are at liberty to move the money without penalty. Fidelity Investments is a great company to do business.
     
  4. Westwood

    Westwood Well-Known Member

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    Depends on your adversity to risk. CD's are insured.
     
  5. agmantoo

    agmantoo agmantoo Supporter

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    CDs are insured, that I agree. There are CD dollars insured by pennies and FDIC is not the federal gov.. If there is a collapse we are all up the same creek without a paddle
     
  6. Gideon's War

    Gideon's War Well-Known Member

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  7. motivated

    motivated Well-Known Member

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    Thanks for all the information.
    Jodi