[QUOTE=friedo]
These days, you can get 5% on fully liquid savings accounts, too.
As for CDs, I personally don’t like anything less than a year. If you need the money back that quickly, you might as well have it in a liquid account with a decent interest rate. A good strategy is a CD Ladder with an equal amount in each tier.
[/QUOTE]
I’ve got both a 5% savings and a 5.6% CD (13 months). Both are absolutely safe. Aren’t bonds a good bet these days, too?
[QUOTE=LSLGuy]
There is no advantage to buying a 3 year CD when a 1 year CD pays the same rate. And as between 4.87% and 4.88%, the yield difference is $1 per year per $10,000 invested. Not material.
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It depends on which direction you think interest rates are going to go. If you think they will go down then you may want to buy the 3 year CD and lock in that interest rate for 3 years. If you think they will go up or stay the same you would want the 1 year CD.