Choosing Between CDs or Savings Accounts
CD or Savings Account: One, Both, or Neither?
Finding an investment product that best meets your unique needs can be confusing and frustrating. There are so many out there, including mutual funds, money markets, stocks, bonds, and annuities, to name a few. Books have been written comparing and contrasting each one of these. This article will focus on just two — certificates of deposit (CDs) and savings accounts. Given the current economy and the lower rates of interest, does either of these make any sense today?
Rather than list all of the factors that may go into your decision, let's focus on the major over-riding factor: risk. If I put my money in, will I at least get it out?
As a general rule, like so many things in our society, a low level of risk garners a small amount of gain; the higher the risk, the bigger the payoff. CDs and savings accounts are definitely in the first category, and they may be on the far end at tha...
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