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Questions tagged [certificate-of-deposit]

for questions that relate to the certificate of deposits(CD). A CD is a time deposit, a financial product commonly offered to consumers in the United States.

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12 votes
5 answers
6k views

Should I pay off mortgage or invest in CD?

I am confused about the mortgage rates in APR vs CD rates that I could invest in [US]. I have a mortgage loan that I got with 2.875 APR. I could pay that off or invest that money in a CD with rate of ...
zadane's user avatar
  • 263
0 votes
1 answer
157 views

brokered CD interest calculations

When I look at the fixed income overview page for etrade (although they are all pretty much the same as far as I can tell) there is a 5.75% rate for CDs at one year. When you click through, this is ...
jjanes's user avatar
  • 1,141
1 vote
0 answers
305 views

Taxes Related to CD with Primary and Secondary Account Holder

I visited a Bank of America branch and the representative told me that I can open a Certificate of Deposit account with them and have my mother, a nonresident alien, be the primary account holder ...
kd8's user avatar
  • 11
-1 votes
1 answer
119 views

Short term investments

I have saved money, but haven't been investing it. Don't know where to start. House is payed for, little to no debt. Only making 58k a year. Are CD's the best low risk short term option?
Ocamf's user avatar
  • 1
1 vote
2 answers
207 views

Will I lose any Principal if I cash in a CD early?

I've had a 35 month CD for 11 months and thinking about cashing it in now. Will I lose any principal if I cash it out now or would it vary by institution?
Rich's user avatar
  • 1,749
10 votes
2 answers
4k views

Is there any advantage to a longer term CD that has a lower interest rate than a shorter term CD?

From what I understand, long term certificates of deposit (CDs) typically offer higher interest rates than short term CDs. They do that to give you a reason to lock up your money for a longer period ...
7529's user avatar
  • 3,753
17 votes
2 answers
4k views

What is the best way to loan money to a family member until CD matures?

My family member has a $37,000 Certificate of Deposit that matures in December. She had planned to buy a house in January and use this money as part of her down payment. Recently she has an ...
gwcoffey's user avatar
  • 273
-4 votes
3 answers
233 views

Method to save money which disallows early withdrawal?

How can money be saved that can't be accessed -- even in an emergency -- for 6 months? I'm aware of CDs, but in an emergency banks allow you to get the money on the CD, and will charge you to access ...
whitewings's user avatar
1 vote
1 answer
149 views

What accounts for the difference in yield to maturity (YTM) between brokered CDs and US Treasuries?

Looking at the Charles Schwab table below dated 2023-02-24 on the yield to maturity (YTM) for different brokered CDs and bonds, I see that for when the maturity is 1 year or higher, brokered CDs have ...
Franck Dernoncourt's user avatar
4 votes
2 answers
601 views

What factors to evaluate in a bank or credit union when investing certificate of deposits in the US?

How do I evaluate a bank or credit union for its financial strength and trustworthiness before investing in their certificate of deposits in the US?
HelloDarkWorld's user avatar
14 votes
3 answers
4k views

Are there risks or hidden costs of buying a CD from a bank I don't have an account with?

I'm the treasurer for my church and we have $100K saved up to replace the roof of the sanctuary. It'll be a year before we need the money, so I thought I should probably take the money out of savings ...
B. Goddard's user avatar
5 votes
1 answer
17k views

what does coupon frequency at maturity mean for a cd?

when are dividends paid to the CD account. Is the return of the CD better if monthly or at maturity? These are the 2 choices I have
Kevin's user avatar
  • 51
1 vote
1 answer
920 views

Is it ok to name a trust as a beneficiary to a CD?

Is there any downside to naming a trust as a beneficiary to a CD or in general, a bank account if the bank and/or credit union allows it? This is in California.
Ian's user avatar
  • 21
0 votes
1 answer
77 views

What is the relationship between Feds Fund Rate vs. Certificate of Deposit Rate in the US?

I've noticed the Fed in the US has increased their Fed Fund Rate and the banks in the US have also increased their rates in the Certificate of Deposits (CD) from 0.XX% to 4.XX% since 2021 until now. ...
HelloDarkWorld's user avatar
4 votes
2 answers
199 views

1 year CD or 1 year Treasury pros and cons

I was looking at treasury rate and CD rates . And It looks like Treasury rate is higher than CD . And with my own experience it is easy to buy either CD or Treasury. So My question why people buy CD ...
puzzled's user avatar
  • 1,016
-2 votes
3 answers
518 views

In theory, can FDIC fail?

In theory, can FDIC fail? If it goings default, who is going to cover the customers? Will the federal reserve automatically prints money to keep FDIC alive? Or such decision must be made through a ...
dodo's user avatar
  • 161
1 vote
1 answer
355 views

Emergency Fund: CD Ladder or I Bonds?

I've been living below my income for a while now, and built up an emergency fund of 12 months comfortable expenses/18 months bare-bones expenses. Currently it's sitting in a savings account earning a ...
Anony Mouse's user avatar
2 votes
1 answer
132 views

Are there tax requirements for a transfer on death account? If so, how do I file it?

I live in the U.S. My great aunt passed away and I was listed as her beneficiary on her transfer on death Certificate deposit (CD) account. The account has/had approx. $30,000 USD, which is being ...
birdnerdgirl's user avatar
4 votes
2 answers
274 views

What is the most risk-free way to invest a lump sum of cash for 1-2 years? [duplicate]

I received a signing bonus with my most recent position for which, if I leave the company after one year I must return half, and can keep the entire amount if I stay two years. I am a very risk-averse ...
Gramatik's user avatar
  • 427
4 votes
1 answer
202 views

Can banks charge a lower interest rate for loans than for their fixed term savings account and still make profit?

A friend of mine got a loan of 1,000,000 at an interest rate of 10.6% per year for three years and then deposited that 1 million at 3-year fixed-term non-accessible savings account with a return ...
IPlanToTravelTheWorldOneDay's user avatar
3 votes
3 answers
367 views

Does it make sense to ladder CD's if the APY is the same for different periods?

I understand that CD ladders are a mechanism to take advantage of the various interest rates offered for different time periods. Given that, is there any point investing in longer and longer term CD's ...
286642's user avatar
  • 139
1 vote
2 answers
76 views

CDs vs saving account - which is better if both have same APY?

Currently Marcus by Goldman Sachs is offering the same APY for a 7-Month No-Penalty CD and for an Online savings account. AFAIU a savings account has full liquidity, while the CD forces you to stay ...
Jonathan's user avatar
  • 111
2 votes
1 answer
116 views

Why are savings rates the same as CD rates? [duplicate]

Looking at Ally bank (https://www.ally.com/bank/view-rates/), a 12-month CD has the same APY as a savings account. (9-month CDs are an even lower APY). Money in a CD is locked up for 12-months, with ...
nosson's user avatar
  • 23
1 vote
4 answers
317 views

How Should I invest $20K? [closed]

I came by some cash a year ago, so I put $20,000 in a Certificate of Deposit which will end this weekend (at about $20.5K). Now I'm wondering what to do with it. I don't really know much about ...
user avatar
1 vote
1 answer
237 views

Why does a short-term certificate of deposit (CD) have a significantly smaller annual percentage yield (APY) than a saving accounts in some banks? [duplicate]

I see on Ally Financial's website that a 3-month certificate of deposit (CD) has an annual percentage yield (APY) of 0.75% whereas the saving account has an APY of 1.60%. This surprises me because I ...
Franck Dernoncourt's user avatar
1 vote
1 answer
117 views

Choosing a Trust Bank/Investment Account

Not that it matters for this question, but for people following my life story :), this is a follow up to this question: Options for Protecting Inheritance Before Death? So we have created an income-...
Phil Sandler's user avatar
  • 3,501
3 votes
2 answers
370 views

Why would I open a low-rate 9 month CD instead of a higher rate savings account?

One specific (popular online) bank is offering a 9 month 1.25% CD, while it's savings account is 1.90%. There's no way I see interest rates tumbling in the next nine months, so why should I -- why ...
RonJohn's user avatar
  • 50.7k
1 vote
1 answer
727 views

What does the "market value" of a CD on TD Ameritrade mean?

Yesterday, I bought my first certificate of deposit. (I did it more for fun and experience than for any other reason.) It's a 1-month CD that I bought on the primary market, with a coupon of 1.9%. I ...
Tanner Swett's user avatar
  • 3,427
2 votes
2 answers
3k views

Can a brokered CD still count as "Massachusetts Bank Interest" for income tax purposes?

On the Massachusetts income tax Form 1, line 5 is for "Interest from Massachusetts Banks". This interest income gets an amount deducted from it ($200 for married filing jointly), and is reported there ...
user avatar
2 votes
2 answers
173 views

Are there any catches to no penalty CDs?

My bank offers a a 2.25% savings account. They also offer a 2.35% no penalty CD. This sounds like a straight upgrade with no downsides (ignoring a 7 day minimum holding period). This sounds too good ...
David says Reinstate Monica's user avatar
1 vote
2 answers
860 views

What is the point of buying real estate when a GIC yields more?

Despite the fact that interest rates have risen over the past year and the housing market flatlining in Toronto and other Canadian cities, for whatever reason, people are still selling houses at ...
user2213307's user avatar
2 votes
0 answers
72 views

Is a bank account or branch manager able to give higher interest rates on CDs to preferred clients? [duplicate]

Can an account manager or branch manager of your bank give you higher interest rates on savings or CDs (Certificates of Deposit) if you are a preferred client? For instance, if a long time client who ...
Amp Cetera's user avatar
3 votes
1 answer
128 views

when money market funds have comparable yields to CD maturity rates, is it obvious money market funds trump

(in light of added questions from others, my question is slightly edited) New to investment and only recently did I notice that in the US some money market funds generate 1.5-2.3% yields, which are ...
B Chen's user avatar
  • 1,029
5 votes
2 answers
239 views

Why would anyone go for the shortest term no-penalty CD with lower rate?

Consider below's no-penalty CDs offered by the same bank with the same rules. Why would anyone go for the shortest CD (7 months) if one can get a better rate getting the 13 month CD and close early ...
brt's user avatar
  • 1,256
4 votes
3 answers
796 views

Dad (mid 50s) wants me to help him invest ~500k?

My dad is in his mid 50s right now, and he has ~500,000 in his savings account. He has approximately 1 million in his 401k. He feels bad that he missed out on the rally of the past 9 years and wants ...
John Doe's user avatar
1 vote
3 answers
679 views

Interest Payments on Certificates of Deposit

I'm curious how interest payments on certificates of deposits get paid out. Let's pretend you put $100 into a 5-year CD at 3% annual rate. Do you get: $3 every year $115.93 at once at the end of 5 ...
user687554's user avatar
2 votes
3 answers
135 views

Does an equivalent to stock "options" exist for CDs?

I was curious if an individual is able to purchase the option to get a CD at a particular rate in the future? Or alternatively defer the purchase of a CD and lock in the existing rate.
Joshua Enfield's user avatar
2 votes
3 answers
443 views

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 ...
Nosjack's user avatar
  • 8,697
2 votes
1 answer
256 views

Are longer or shorter term CDs preferable while interest rates rise?

As of August in 2018, everything I'm reading is projecting rising interest rates for a while. Assuming that this is what happens, is it better to deposit money into a shorter-term CD (at a lower ...
Hari's user avatar
  • 419
2 votes
3 answers
186 views

Prevalence of certificate of deposit ads and possible implications

I first learned about certificates of deposit (CDs) two months ago through a few posts on different stock boards on Yahoo Finance. Most of these posts went like this: "I'm pulling out some of my money ...
ToniAz's user avatar
  • 506
2 votes
1 answer
286 views

When one bank's CD yields are one hundred times the market

I just learned about the "certificate of deposit" or CD. Looking at a comparison between the annual yields on these CDs across different banks, I was shocked to see that the yields on the CDs issued ...
ToniAz's user avatar
  • 506
1 vote
1 answer
218 views

safe investment for elderly

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 ...
piton's user avatar
  • 489
4 votes
1 answer
1k views

Do banks do a credit check when buying a CD?

I had my credit frozen about six month ago when one of the credit bureaus had a data breach (I forget which one it was). Will I need to unfreeze it before I can buy a CD with a bank, or do banks not ...
Rich's user avatar
  • 1,749
2 votes
2 answers
743 views

Can you add money to a CD

Is it possible to add money to a CD like you would a money market or do you have to wait until the CD matures to make changes? I've found interest rates to be higher on CDs but not being able to add ...
Rich's user avatar
  • 1,749
5 votes
1 answer
283 views

Why would a CD Rate be higher than a Corporate Bond rate?

In looking at my brokerage account for fixed income products, I was looking at both CDs and Corporate Bonds. I was surprised to see that the best 1-year CDs had a higher interest rate than any AAA or ...
A Person's user avatar
5 votes
1 answer
3k views

How does this example of fake certificate of deposit fraud work?

This article mentions a method of fraud that yielded $2,000,000 from fake certificates of deposit. That didn’t stop Beane from following the video’s advice and using fake accounts to create $30 ...
Freiheit's user avatar
  • 8,742
4 votes
2 answers
750 views

What exactly is a time deposit?

I understand the function of a time deposit. You can make a deposit, and you cannot withdrawal (without a fine) for a set amount of time. Really what I'm confused upon is what types of accounts are ...
colorlace's user avatar
  • 223
7 votes
1 answer
395 views

What is the purpose of a short term CD that offers lower interest than a savings account?

I have noticed that some banks offer short term CDs with interest rates that are actually lower than that that the same bank pays on a savings account. For example Ally bank seems to offer a 0.30% ...
lzam's user avatar
  • 611
14 votes
5 answers
4k views

What's the benefit of opening a Certificate of Deposit (CD) Account?

My credit union is holding a special offer for a 2.25% APY Certificate Account right now, and I was considering opening one at $500. I ran it against an online calculator, and I was surprised at how ...
Zibbobz's user avatar
  • 4,374
6 votes
2 answers
1k views

What's a good option for passive income for a college student?

I'm entering my senior year of college, and will have very minimal, if any, debt upon graduation. From self employment and internships I've saved up a decent amount of money over the past several ...
tpm900's user avatar
  • 497