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I am thinking about purchasing some (short term) CDs once I have some extra savings. However, I'm not sure whether it is actually more profitable to purchase CDs or keep the money in my high-yield savings account.

Currently, Ally's savings account is at 1.8% APY. They also offer 3, 6, and 12 month CDs at 0.75%, 1.0%, and 2.1% APY respectively. Given one year of time, the 12 month CD is obviously more profitable than one year of money in the savings account. However, I don't know how I would calculate the return with the other CD options.

Assuming all gains are kept in the savings account or included in the CD renewal and rates do not change. Given one year and $1,000 which is more profitable? What about over 5 years if the pattern continues?

  • Put all the money in the savings at 1.8% APY.
  • Purchase 3 month CD at beginning of the year and renew every 3 months.
  • Purchase 6 month CD and renew once it matures.

EDIT: In other words, what is the effective APYreturn for each of the three options?

I am thinking about purchasing some (short term) CDs once I have some extra savings. However, I'm not sure whether it is actually more profitable to purchase CDs or keep the money in my high-yield savings account.

Currently, Ally's savings account is at 1.8% APY. They also offer 3, 6, and 12 month CDs at 0.75%, 1.0%, and 2.1% APY respectively. Given one year of time, the 12 month CD is obviously more profitable than one year of money in the savings account. However, I don't know how I would calculate the return with the other CD options.

Assuming all gains are kept in the savings account or included in the CD renewal and rates do not change. Given one year and $1,000 which is more profitable? What about over 5 years if the pattern continues?

  • Put all the money in the savings at 1.8% APY.
  • Purchase 3 month CD at beginning of the year and renew every 3 months.
  • Purchase 6 month CD and renew once it matures.

EDIT: In other words, what is the effective APY for each of the three options?

I am thinking about purchasing some (short term) CDs once I have some extra savings. However, I'm not sure whether it is actually more profitable to purchase CDs or keep the money in my high-yield savings account.

Currently, Ally's savings account is at 1.8% APY. They also offer 3, 6, and 12 month CDs at 0.75%, 1.0%, and 2.1% APY respectively. Given one year of time, the 12 month CD is obviously more profitable than one year of money in the savings account. However, I don't know how I would calculate the return with the other CD options.

Assuming all gains are kept in the savings account or included in the CD renewal and rates do not change. Given one year and $1,000 which is more profitable? What about over 5 years if the pattern continues?

  • Put all the money in the savings at 1.8% APY.
  • Purchase 3 month CD at beginning of the year and renew every 3 months.
  • Purchase 6 month CD and renew once it matures.

EDIT: In other words, what is the effective return for each of the three options?

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source | link

I am thinking about purchasing some (short term) CDs once I have some extra savings. However, I'm not sure whether it is actually more profitable to purchase CDs or keep the money in my high-yield savings account.

Currently, Ally's savings account is at 1.8% APY. They also offer 3, 6, and 12 month CDs at 0.75%, 1.0%, and 2.1% APY respectively. Given one year of time, the 12 month CD is obviously more profitable than one year of money in the savings account. However, I don't know how I would calculate the return with the other CD options.

Assuming all gains are kept in the savings account or included in the CD renewal and rates do not changerates do not change. Given one year and $1,000 which is more profitable? What about over 5 years if the pattern continues?

  • Put all the money in the savings at 1.8% APY.
  • Purchase 3 month CD at beginning of the year and renew every 3 months.
  • Purchase 6 month CD and renew once it matures.

EDIT: In other words, what is the effective APY for each of the three options?

I am thinking about purchasing some (short term) CDs once I have some extra savings. However, I'm not sure whether it is actually more profitable to purchase CDs or keep the money in my high-yield savings account.

Currently, Ally's savings account is at 1.8% APY. They also offer 3, 6, and 12 month CDs at 0.75%, 1.0%, and 2.1% APY respectively. Given one year of time, the 12 month CD is obviously more profitable than one year of money in the savings account. However, I don't know how I would calculate the return with the other CD options.

Assuming all gains are kept in the savings account or included in the CD renewal and rates do not change. Given one year and $1,000 which is more profitable? What about over 5 years if the pattern continues?

  • Put all the money in the savings at 1.8% APY.
  • Purchase 3 month CD at beginning of the year and renew every 3 months.
  • Purchase 6 month CD and renew once it matures.

I am thinking about purchasing some (short term) CDs once I have some extra savings. However, I'm not sure whether it is actually more profitable to purchase CDs or keep the money in my high-yield savings account.

Currently, Ally's savings account is at 1.8% APY. They also offer 3, 6, and 12 month CDs at 0.75%, 1.0%, and 2.1% APY respectively. Given one year of time, the 12 month CD is obviously more profitable than one year of money in the savings account. However, I don't know how I would calculate the return with the other CD options.

Assuming all gains are kept in the savings account or included in the CD renewal and rates do not change. Given one year and $1,000 which is more profitable? What about over 5 years if the pattern continues?

  • Put all the money in the savings at 1.8% APY.
  • Purchase 3 month CD at beginning of the year and renew every 3 months.
  • Purchase 6 month CD and renew once it matures.

EDIT: In other words, what is the effective APY for each of the three options?

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Savings Account vs. CDs of less than 1 year. Which gives the better return?

I am thinking about purchasing some (short term) CDs once I have some extra savings. However, I'm not sure whether it is actually more profitable to purchase CDs or keep the money in my high-yield savings account.

Currently, Ally's savings account is at 1.8% APY. They also offer 3, 6, and 12 month CDs at 0.75%, 1.0%, and 2.1% APY respectively. Given one year of time, the 12 month CD is obviously more profitable than one year of money in the savings account. However, I don't know how I would calculate the return with the other CD options.

Assuming all gains are kept in the savings account or included in the CD renewal and rates do not change. Given one year and $1,000 which is more profitable? What about over 5 years if the pattern continues?

  • Put all the money in the savings at 1.8% APY.
  • Purchase 3 month CD at beginning of the year and renew every 3 months.
  • Purchase 6 month CD and renew once it matures.