is a CD right for me or should I stick to a savings account?

[tradecloakforsword]

@laterrainfot ally was offering a 8 month CD for 5.25% if you can deal with the extra 2 months

 

[oneworld]

@tradecloakforsword Or nasa fcu with 9 months at 5.5% but personally OP sounds young and like they are figuring out the best financial path I'd avoid locking up my savings into a CD.

How much money are we talking? Do you already have some funds invested? Do you have an emergency savings available or atleast funds in a "safe" fund that you could easily liquidate if needed?

 

[oneworld]

@laterrainfot I use money markets (5-5.5%).

I try to avoid CDs since they look up for money. You can also look at Treasury bills if you live in a state with income taxes.

Also, out a portion toward equities so you are not just in fixed income.

 

[tdsamuel]

@laterrainfot Newtech has a 5.25% savings account. I wouldn't bother with a less liquid asset.

 

[bvb123]

@laterrainfot Even 4-week TBills are still at ~5.3% APY right now. Buy new $2k 4- or 8-week TBills every month and set them reinvest as many times as makes sense for you. Treasury Direct’s website is ancient by today’s standards but once you know how to navigate it, it’s fine.

I have something like 80% of my liquid savings in a few different TBill ladders, no more than 13-week Bills. Easy to set and forget, and easy to liquidate if/when I need the money.

 

[veganbro4]

@laterrainfot You can’t keep adding to a CD so you would have to buy an additional new $2,000 CD each month and wouldn’t be able to get your money out of the last 5 or 6 of them until after the 6 months were up in those after your 10 month deadline.

 

[oneworld]

@veganbro4 You could use a growth cd, but prob better off with a HYSA or money market account.

 

[suamaytinh5s]

@laterrainfot Someone, please take the time to explain to op what a 4 week Treasury bill is and how to ladder them

 

[thinkingpositive]

@suamaytinh5s Why don’t you instead of making a snarky comment…

 

[oneworld]

@thinkingpositive Seriously

 

[suamaytinh5s]

@thinkingpositive Because I might be at work and not have the time to properly explain. Ass hat.

 

[friendoffrancis]

@laterrainfot Im about to lock up some of my emergency fund in a 12 month CD at 5%. Rates may fall in 2024 and this will lock in that high rate for the entire year.

 

[oneworld]

@friendoffrancis There's 5.5 at nasa

 

[bartedwards]

@laterrainfot T bills are doing much better at around %5, for 3 months and 6 months.

 

[zybercon]

@laterrainfot Put some of the money in the CD. The savings yield will decline when rates get cut, which is expected in March.

 

[akt1985]

@laterrainfot Ally has a no penalty CD at 4.55%. The term is 11 months but you can withdraw anytime after 7 days without penalty. It's the perfect middle ground to lock in a better rate as the HYSA rate will likely keep dropping throughout the year.

 

[effie]

@laterrainfot HYSA due to liquidity first. Six month savings next. Equities third. Six month more of savings. Dividend ETFs. Bonds. Real estate.

All that after maximizing your retirement portfolios like a 401K/IRA.

 

[kipyegon]

@laterrainfot As someone who’s been in a CD for almost 8 months; I’m genuinely kicking myself for it patiently waiting on getting out of it. Shit sucks.