I am currently getting 1.3% in a high yield savings account offered online by Amex. Now the only CD's offering more than 1.3% are in the
2+ year maturities. Does it make it any sense to buy a 2+ year CD given this? I have $50k I want to invest and I know I will not need the money for at least several years.
I couldn't advise you via this NG even if I wanted to so do NOT take this as advice.
The trap with long term CDs lies in the unknown future. Back in the "good old days" I knew folks who refused to buy a 20 year CD that was paying 15+ because they didn't want to miss out "when rates went up." Oh how we all wish we had such a CD today.
Generally, I have no problem with CDs, but I usually prefer laddering them - breaking them up into multiple CDs with varying maturities. This allows you to cash out 1 or 2 while leaving the rest in place - it can save you some early surrender fees and keep some of the money in place.
Good luck, Gene E. Utterback, EA, RFC, ABA
On the other hand, see what the early withdrawal penalties are. For example, Ally Bank (FDIC insured) has a flat 2 month penalty, even for CDs as long as 5 years. With such a short penalty it doesn't take long for going with the longest-term certificate to pay for any penalty vs. laddering and working to avoid a penalty.
-- Rich Carreiro snipped-for-privacy@rlcarr.com
Another possibility is a "bump" CD - starts out at a slightly lower rate, but gives you the option to increase to the current rate at any time, one time only. The safety of a CD plus the thrill of gambling...
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