CD's at local bank - 6.25% over 4 months, good deal?

[vi edit]

I've never "purchased" a CD from a bank before, but this sounds like a pretty decent deal.

Would dropping 2k in one of these be a smart thing?

 

[ManSnake]

CD sux, DVD rulz!

Seriously, if you have 2k, invest in stock market, don't put ur money to waste!

 

[vi edit]

I'm by no means incredibly knowledgeable when it comes to investing, but how many stocks will guarantee me a 19% return(assuming I could do this three times in a year)?

If I want to play it fairly safe, are there any better options out there right now?

 

[optoman]

Is that 6.25% for the whole year or just for 4 months? What I mean is that if the return is 6.25% for the year then you will only get around 2.08% for the 4 months. I could be wrong. If it is for the 4 months then that is a good deal but I am also not good at money matters.

 

[vi edit]

I'm thinking for 4 months. They were offering 8 month ones for 6.75%.

 

[kranky]

Read the fine print, it probably says 6.25% APY. APY=Annual Percentage Yield. Like optoman said, the 6.25 will be pro-rated and over 4 months you'll get 4/12 of the 6.25%.

 

[Cosmic_Horror]

the interest rate offered are usually are per annum.

 

[vi edit]

There wasn't any fine print, it was on a piece of paper plastered to the drive through teller window

Thanks for the advice! I have some checking up to do

 

[Tripleshot]

CD's are safe,but do not perform as well as ther market. When you accept risk,your gains potential is better. Thats why bonds differ from stocks.They are more stable. Bank cd's suck for gains,but it is patriotic,I suppose.

Bank Cd's help the bank alot. They(the bank) borrow against thse cd's because you can't collect until maturity without a significant penalty. They make short term loans on them as a kind of collateral.

 

[Mister T]

vi_edit,

6.25% is on a yearly basis. If you want a safe investment that is the way to go.
Always remember that risk is proportional to return, i.e., low risk, low return.

Just a side note. If you are looking for a safe investment, I would recommend
mutual funds that invest in municipal bonds... These types of investment are completely
exempt from taxes. Any interest made on a 4-month CD will be subject to income tax.

 

[zbalat]

Your $2000.00 will be worth exactly $2043.33 in 4 months. CD returns are great on large deposits of say, $2,000,000, but not $2000.00. Find a good mutual fund.

 

[JellyBaby]

<< Find a good mutual fund >>

And be sure you also have a decent federal administration and federal reserve chairman. Don't know about the rest of you but my mutual fund made a stunning 1 percent this year. An entire year's worth of retirement savings down the friggin' tube. I'd like to personally thank the tech. industry venture capitalists, the finicky stock market in general and of course the Clinton administration and Alan Greenspan. :disgust:

 

[OS]

there is no such thing as a CD that gives 6.25% return over four months. If you prove me wrong, I want to know what bank this is.