Is their risk of a hard credit inq when applying for/ getting a CD?

[boxmover]

MyFico members seem to know better than bank CSRs, so asking here. TIA

Also, is opening CDs something that gets reported to or affects Chex or Lexus ? Any other question(s) should I be asking ? Tax implications? Would hate to invest in them just to have any potential fsin be swallowed by tax.

My end goal is simply diversification so I'm considering them. Any advice or shared experiences please?

[Patient957]

No HP or Chex for CDs in my experience, but wouldn't hurt to ask in advance if it's new bank for you.  But I would say 99.99% no.

There are always tax consequences to interest bearing accounts, unless they are part of a tax advantaged IRA or similar.  Interest is generally taxed as income, but it really depends on your specific tax situation, so if you have a relatively complex tax situation, you should definitely check with your CPA.

[boxmover]

Thanks for replying  

[Copenix]

I don't think so. 

There is obviously tax implication if the interest is more than $10 a year. You'll receive a 1099-INT from the bank in March/April the year after for the interest you earned to be reported on your tax declaration. 

[ptatohed]

You can consider a Roth IRA and open up a CD (and other investments) under the IRA and not get taxed on the earnings.  You can also look in to T-Bills which have Fed tax but no state tax.  

[Realist]

Negative.  No hard inquiry or chexsystem for a CD.  Chexsystems is a report that documents whether you have been a bad boy/girl with your financial institutions.  Stiff a bank in anyway, and you may appear on a chexsystems report.

As all financial instruments are tailored to everyones individual needs, a CD vs a Roth CD or IRA, are very different.  CD is taxed annually typically, unless you push beyond a 12mo.  Tax comes due in the year it matures.  Roth anything is not, but you forfeit your right to withdraw for a minimum of five years, and at best, you may only withdraw profits until retirement age - where everything becomes available.    I personally find the freedom of a CD that you contribute to regularly, and pay taxes on regularly, and can withdraw regularly, appetizing.  Up to a certain point in time, the tax requirement is negligable.  It's hardly felt.  Yes I understand precisely what you may lose in longest terms effect, but what also could you gain by having access to all of your capital?

Worse case scenario, you lose your home through job loss, can't find another, foreclosure, whatever it may be.  That 200k-500k in that CD, that you've been taxed on, sitting outside of the financial system, purchases flexability.  You can purchase a lower to mid size home in cash, free and clear.  If you think you can't lose your home, I would say that everything is possible.  I watched as my own parents lost their own home, unable to find a job, and lenders unwilling to refinance or loan modify.  20+ years in on time payments only to fall behind in that one single event.  It can happen to anyone, never think it can't happen to you.

Options = power.  That's financial control, and I refuse to leave much outside of my own precise control.