CD Ladder

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Topic Author
mav12
Posts: 62
Joined: Tue Nov 07, 2017 5:36 pm

CD Ladder

Post by mav12 » Mon Jun 17, 2019 9:21 pm

Hello,

Would you please suggest if a CD ladder still makes sense and how do you allocate the funds? I see that some institutions pay out over 3% APY ($5,000) on a 5-year CD with an early term of 365 days.

Considering allocating about 25k, would it make sense to put all into that 5yr CD as we have a Fed meeting coming up and expectations of lower rates?

Thank you.

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Sandtrap
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Location: Hawaii No Ka Oi , N. Arizona

Re: CD Ladder

Post by Sandtrap » Mon Jun 17, 2019 10:22 pm

It depends on your potential need to access funds prior to 5 years on a 5 year CD.
Interest rate. Penalties. Etc.
How would you feel if you bought a 5 year CD and over the 5 years interest rates swung the other way?
j
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Topic Author
mav12
Posts: 62
Joined: Tue Nov 07, 2017 5:36 pm

Re: CD Ladder

Post by mav12 » Mon Jun 17, 2019 10:41 pm

I would compute if it's worth switching over to a new rate (given the penalties) or sticking with an existing rate. I'm in my upper 30s, working.

CoastalWinds
Posts: 568
Joined: Sat Apr 06, 2019 8:28 pm

Re: CD Ladder

Post by CoastalWinds » Mon Jun 17, 2019 10:59 pm

Do you really think you can beat the timing of the Fed? Markets react instantly. All known data affecting likely fed moves has been factored into rates.

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