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Post by freecharlie on Jul 7, 2023 22:45:23 GMT
Let's just say that I am a novice at this, but with the current rates and I have some extra money I need to save for taxes next year, I am looking at a CD. There are rates up to 5.5 APY which is pretty good for money I need to save anyway.
The places with the higher APY are places I've not really heard of (there are two that I have heard of, but when I check their reviews they are mostly negative, although who leaves a good review for a bank).
I can put it in for 6 months or 9 months to get the highest APY and that is right around tax time.
Am I missing a pitfall?
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Post by hopemax on Jul 7, 2023 22:51:04 GMT
The major downside to CDs is that it tied up your money you might need in case of an emergency. To get out of it would incur a penalty.
I have money to park, and am a looking to CDs too. And one place that came up locally is ENT Credit Union, here in CO. I don’t need the best online rate, just something competitive.
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Post by freecharlie on Jul 7, 2023 22:54:44 GMT
The major downside to CDs is that it tied up your money you might need in case of an emergency. To get out of it would incur a penalty. I have money to park, and am a looking to CDs too. And one place that came up locally is ENT Credit Union, here in CO. I don’t need the best online rate, just something competitive. I'm in Colorado too I was looking at Bellco and ENT. |
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Ryann
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Post by Ryann on Jul 7, 2023 22:55:59 GMT
What about a money market account at a major brokerage firm like Schwab or Fidelity. I think the MMA rates are similar to CD rates.
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Post by katlady on Jul 7, 2023 23:03:03 GMT
When we had CDs we staggered them so they didn’t all mature at the same time. They would mature 3 or 6 months apart. That way we could get quicker access to some money if we needed it.
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Post by freecharlie on Jul 7, 2023 23:13:27 GMT
I'll have enough in my actual savings account. This is just money I know I will need for taxes, so I don't need it until April.
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Post by crazy4scraps on Jul 7, 2023 23:51:44 GMT
The only pitfall is if you have to take it out early, but since you won’t need it beforehand that shouldn’t be an issue. Usually a longer term will get you the best rate. I’d only stagger them if there was any chance I’d need the money.
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snyder
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Post by snyder on Jul 7, 2023 23:54:09 GMT
I too would do ENT or if you do have any type of military affliation, such as parent in the service, you can do Navy Federal. Navy always has better rates than ENT. If they don't have good reviews, don't give them a thought. Does your school district have a credit union?
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Post by **GypsyGirl** on Jul 8, 2023 0:33:27 GMT
What about Treasury Bills? They are paying good rates now and you can get them for various time frames.
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Post by lisae on Jul 8, 2023 1:49:54 GMT
Are you eligible for a Credit Union? You will get the best rates of any local bank that way. You can also invest in CD's through your bank's investment department. They are called Market CD's. The bank will have CD's from various banks around the country. They are FDIC insured and the rates are usually higher than what you can get locally. Sometimes they are names you have heard of like Citibank and sometimes they are very small local or regional banks. Be sure they are not callable as you want the rate for the entire length of the CD. The only downside is that you really can't get out of them before the term is up. You are dealing with your local bank this way and you may be more comfortable with that. If you invest in a CD held by your local bank or credit union and then need the money, you can get out of the CD early by forfeiting some of the interest.
You can look into Treasuries at Treasurydirect.gov as **GypsyGirl** suggested.
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Post by calgaryscrapper on Jul 8, 2023 2:11:39 GMT
Might I suggest you put the cash in a safety deposit box in your name. If you are going through a divorce your ex husband might claim ownership of half of the money.
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Post by mom on Jul 8, 2023 2:39:52 GMT
Personally, we would do a Money Market Account and not risk any penalty if something changes for you in the near future. I know the money is supposed to be for taxes or whatever, but *I* would want to be able to get my hands on it in case of a dire emergency that you needed funds right then. Being the only 'adult' of the home now, if something HUGE breaks and you need the cash, I wouldn't want you to be worried about penalties.
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iowgirl
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Post by iowgirl on Jul 8, 2023 3:22:30 GMT
With CD's - pay attention to the maturity date. They can automatically renew - and you don't want that to happen. Keep a reminder of when the maturity date is.
I parked some extra in some higher yielding CD's this spring. I won't need the money until next year, so it was a good easy way for me to make a little extra on it. I think I have 5 days (might be a few more than that) at maturity to cash it in. Otherwise it rolls back into a new time period, with less favorable rates. Plus I will need the money for operating capital at that point.
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Post by freecharlie on Jul 8, 2023 4:44:34 GMT
Might I suggest you put the cash in a safety deposit box in your name. If you are going through a divorce your ex husband might claim ownership of half of the money. divorce is final. We were just dealing with the house still |
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Post by crazy4scraps on Jul 8, 2023 17:57:52 GMT
With CD's - pay attention to the maturity date. They can automatically renew - and you don't want that to happen. Keep a reminder of when the maturity date is. I parked some extra in some higher yielding CD's this spring. I won't need the money until next year, so it was a good easy way for me to make a little extra on it. I think I have 5 days (might be a few more than that) at maturity to cash it in. Otherwise it rolls back into a new time period, with less favorable rates. Plus I will need the money for operating capital at that point. This is a really good point to emphasize. You usually only have a short window of time to close it before it rolls over. |
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mamapeaah
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Sept 30, 2021 4:39:02 GMT
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Post by mamapeaah on Jul 8, 2023 22:47:29 GMT
Sofi is paying a high rate for their savings account, not as high as the CD but if you don't want to tie up your funds it might be worth it
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