CDs Can Be Useful Assets

By: fedweek

Internet-only banks, with their low overheads, have raised the bar for CD yields, prompting some others to compete for customers. Today, average CD yields are in the 5% to 6.7% range. If you have a substantial amount of money in CDs, stagger maturities. Put some of your money into one-year CDs, some into two-year CDs, etc. If you need cash, you’ll have CDs maturing each year. You can redeem those CDs without paying an early-withdrawal penalty. If you don’t need cash, you can reinvest at the highest rates available then. If you stagger maturities you can use different banks for different CDs, locking in the highest rate for each maturity. On the Internet, you can get updated rates, phone numbers, Internet links, etc., at www.bankrate.com.