I'm helping with choosing investments for an elderly person. They just want to park their money and not be in the market, so something relatively safe for somebody in their nineties. They aren't worried about an income stream.

Would CDs be a good choice? Also, when looking at CDs at vanguard, they are brokered CDs vs bank CDs. Is their an upside/downside to one or the other?

Appreciate any suggestions/ideas. thx

  • If someone doesn't want to invest and have no market risk then the choice is a CD or money market. Go with FDIC insured institutions and safety is assured. I don't know the current market but a long time ago I used to buy discounted CDs from my broker (owner needed the cash). All that mattered was the yield. If you go with CDs, consider laddering them given that in the US, rates are inching higher. Jun 24, 2018 at 18:42

1 Answer 1


Buying CD's are profitable, yes there are pros and cons of buying a CD. When you buy a CD, you promise to invest a fixed amount of money in a bank for a set amount of tenure. Your money is insured by the FDIC so there's security there. CD's steady interest rates offer fixed rates for fixed terms.

However, you can even go for Money market funds and Fixed Annuities

  • Money Market Funds: Money market funds pool the savings of many people and invest them in a wide array of conservative securities, such as commercial paper of companies, CDs, Treasury bonds. Money market funds are not insured by the FDIC, so investors do risk suffering losses if investments perform badly. However, this is rare, because money market funds are required by law to invest in low-risk securities and strive to keep their net asset value at a constant $1 a share.
  • Fixed Annuities: When you purchase a fixed annuity from an
    insurance company, the insurer promises in exchange to make regular
    payments until you die. This is attractive to investors who don't
    want to deal with the uncertainty of the stock market and want to
    avoid the risk of running out savings during retirement. A fixed
    annuity has the added advantage, as with 401(k)s and Roth IRAs, of
    being a tax-deferred investment.

Source: Ally

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