[LuxLiving]

CDs aren't riskless w/regard to inflation or deflation. Interest rates can rise and fall while you've got your money locked away. Prices on tangible goods can wobble about usually to the upside while your money is locked away. That's why laddering CDs is a nice way to handle this. But you are going to be subject to trying to reinvest the money upon maturity. Hopefully it will be in a time when interest rates on CDs are up. Sometimes they are down and you've got to find someplace to park the money! Which is some of the reasoning behind your total portfolio might be better served with only a small portion in 'liquid' CDs. Also to be considered is the time frame for needing the $$s as early withdrawal penalty rates may also apply.

We rather like CDs for some specific purposes. It has to do w/FV (future value) of money. If I know we are going to need X number of dollars on a certain date, then after checking a FV calculator we can determine how many dollars to lock away today at what interest rate to make it happen. There may be better ways to invest to make it happen, but with CDs I like the liquidity & certainty of the situation.