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BIGROM



Registered: 01/23/07
Posts: 111
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is a CD a good idea?
#8673750 - 07/23/08 09:17 PM (15 years, 6 months ago) |
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I was wondering about investing some money and checked out my banks CD terms. I'm a little confused, for the five year CD it had a annual yield of 3.50% so does that mean if i invest $1,000 at the end of five years I'll have a return of $17,500? Also are they a good idea in general?
-------------------- No statements made in any post or message by myself should be construed to mean that I am now, or have ever been, participating in or considering participation in any activities in violation of any local, state, or federal laws. All posts are works of fiction.
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Shins
Fun guy



Registered: 09/15/04
Posts: 16,337
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Re: is a CD a good idea? [Re: BIGROM]
#8673797 - 07/23/08 09:28 PM (15 years, 6 months ago) |
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i think it means your money is locked in for 5 years.
considering inflation is higher than 3.5%, if it stays the same you will lose money (value).
better than keeping cash or a chequing account though i guess.
2 cents
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AroundtheSon
Learning to See



Registered: 01/11/07
Posts: 4,427
Loc: Midwest.
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Re: is a CD a good idea? [Re: BIGROM]
#8673829 - 07/23/08 09:36 PM (15 years, 6 months ago) |
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your math is wrong.
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DieCommie


Registered: 12/11/03
Posts: 29,258
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Re: is a CD a good idea? [Re: BIGROM]
#8673834 - 07/23/08 09:38 PM (15 years, 6 months ago) |
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Quote:
BIGROM said: I'm a little confused, for the five year CD it had a annual yield of 3.50% so does that mean if i invest $1,000 at the end of five years I'll have a return of $17,500?
Absolutely not. It means you will have about $1188 at the end of five years.
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AroundtheSon
Learning to See



Registered: 01/11/07
Posts: 4,427
Loc: Midwest.
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Re: is a CD a good idea? [Re: DieCommie]
#8673845 - 07/23/08 09:39 PM (15 years, 6 months ago) |
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which is why it's a poor "investment".
You can usually get 6 month ones for about the same interest rate. I think I seen a introductory for Wachovia at 3.7% recently.
they are great for saving, but poor for investing. Unless of course you like really low risk ventures.
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AroundtheSon
Learning to See



Registered: 01/11/07
Posts: 4,427
Loc: Midwest.
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Also, make sure you have a good bundle saved in "liquid" cash before locking up your money in a CD. Some say you should have a month or two of pay saved up - just in case you were to lose your job or something came up (e.g., hospital, etc.)
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BIGROM



Registered: 01/23/07
Posts: 111
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any good investments out there,can i invest in oil speculating...jk
-------------------- No statements made in any post or message by myself should be construed to mean that I am now, or have ever been, participating in or considering participation in any activities in violation of any local, state, or federal laws. All posts are works of fiction.
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AroundtheSon
Learning to See



Registered: 01/11/07
Posts: 4,427
Loc: Midwest.
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Re: is a CD a good idea? [Re: BIGROM]
#8673901 - 07/23/08 09:50 PM (15 years, 6 months ago) |
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bro, nothing wrong with a cd. If your saving for something, CD's are nice. For instance, saving for a house, let's say you have 20,000 dollars saved up. 3.75% - 4% is good money on 20,000 for just letting them borrow it.
I just didn't want you thinking you would get rich saving in Cd's. But, if you have the money coming in, and nothing to do with it but save, by all fucking means, buy some Cd's.
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BIGROM



Registered: 01/23/07
Posts: 111
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cool thanks for the knowledge
-------------------- No statements made in any post or message by myself should be construed to mean that I am now, or have ever been, participating in or considering participation in any activities in violation of any local, state, or federal laws. All posts are works of fiction.
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KillerPicklez



Registered: 12/13/07
Posts: 16,920
Loc:
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Re: is a CD a good idea? [Re: BIGROM]
#8676942 - 07/24/08 04:02 PM (15 years, 6 months ago) |
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The rate isnt as high as the current inflation rate but it is still better than having your money stuffed under the mattress gaining no value or in a normal checking/ savings account.
You do need to get a CD where you are going to get a better rate than 3.5% on 5 years.
US Bank rates as of today 3.15 on 13 months 3.90 on 25 months 4.70 on 45 months 5.00 on 59 months
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Veritas

Registered: 04/15/05
Posts: 11,089
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WAMU is offering 4.25% on an 8-month online CD. I'm in!
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pothead_bob
Resident Pothead


Registered: 04/12/08
Posts: 1,811
Loc: Your computer screen
Last seen: 3 years, 9 months
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Re: is a CD a good idea? [Re: BIGROM]
#8687459 - 07/27/08 08:00 AM (15 years, 6 months ago) |
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If you don't want to lock your money away, consider online savings accounts. I have one with Etrade that I get 3.3% APR on. It's still less than inflation, but it's about the same as the CD you're looking into. Plus, you can remove your money any time you want.
So, if inflation starts going apeshit, like it has been, I could move my money into the stock market or commodities at the drop of a hat instead of having to wait 5 years to touch it.
-------------------- No knowledge can be certain, if it is not based upon mathematics or upon some other knowledge which is itself based upon the mathematical sciences. -Leonardo da Vinci (1425-1519) Speak well of your enemies. After all, you made them.
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MapleLeafs
Stranger


Registered: 07/27/08
Posts: 67
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Re: is a CD a good idea? [Re: pothead_bob]
#8689530 - 07/27/08 06:28 PM (15 years, 6 months ago) |
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17k , thats way off
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