crunching_numbers - That is an idea worth looking at! Will you pm the information on who you use?
Just off the top of my head....the benefits of doing the CD's vs the bonds:
1. No start up fees (to a broker or anyone else).
2. Interest is paid monthly.
3. Interest is usually a fixed rate. (Even with bonds, the rates can fluctate.)
4. You start earning the interest right away. (With bonds, you have to wait on other factors, like the broker to process the deal. There were other variables I had noted when I looked into bonds before, but I do not know if those apply to your broker.)
5. Taxes are sooo simple! You don't have to figure out any additional fees, etc.
6. The money is guaranteed and backed up by the FDIC/NDIC (if you purchased with an insured institution). Bonds are not "guaranteed". They are not likely to defualt, but there is no promised land.
crunching_numbers - Please send me the information and I will compare the two ideas.
As of today, USAA lowered their interest rates on their savings accounts from 0.2% to 0.11%... so it's only a matter of time before the CD rates go down too :/
Oh yeah, they did.
I did open up two more CD's at a special place (NOT USAA) and am receiving 3% APY one, adn 2% APY on the other. Not too bad in this market.
AMEX personal savings already lowered their % from .9 (which I locked in) down to .75
Found that two of my Ally CDs were bumped up to $200/ea, instead of having 5 $100 CDs. Whoops. I'll get this right eventually.
I think this idea is great! Not only did I just decide to start doing this, but I essentially back date a hundred dollar cd on the first and 15th back to january by creating maturity dates starting jan 1, 2013. I think this is a great idea! I went with navy for now and using their club accounts because I am under the max for the accounts. Thanks for the great idea!
That's excellent. It's really a fun way to stash cash, that you do NOT need RIGHT NOW. So if you have your debts paid off and have an EF in hand, you can't lose doing this.
Anyone play with ee-bonds or i-bonds?
Repo-ed - I looked into those when I was doing a lot of research on investing. To me, the numbers did not work. IF I was to invest in the bonds, I'd have to print out a paper certificate and lock it up so it doesn't get lost or forgotten. And it would definitely be a LONG term strategy.
I looked at tax free munipal bonds awhile back. Did a lot of research into those. On the surface they sound great. But overall, there's no guarantee there will ever be a return on your investment. I watched their performance for several months and it was gut wrenching to watch the value go up and then plummet... And the ones I looked into all required several thousand to get a piece of the action. I didn't have several thousand at the time.
So for now, I am sticking to CD's, short term and long term ones. At least I know the balance will go up (and not down) and I will have easy access to cash if needed every few weeks as the short term (one year or less) CD's mature. I have only cash on that once - but the short term CD's were intended for a specific purpose.
I just started doing "even out" payments on the Navy CD's. I LOVE being able to add funds to existing CD's!