12 month CD no minimum deposit at 2.00%

Radiance · #1 (**permalink**) 09-25-2009, 06:56 AM

This is an offer I received from the AAA:

12 month CD no minimum deposit at 2.00%
No penalty withdraw of balance including incidents if you unvoluntarily loose your job.
What do you think?

disneysteve · #2 (**permalink**) 09-25-2009, 06:58 AM

I think 2% for 12 months is about the best you're going to get today. I looked a few days ago and Ally Bank was at 1.96% so basically the same.

jasonnoguchi · #3 (**permalink**) 09-25-2009, 07:39 PM

2% a year really isn't outstanding.

disneysteve · #4 (**permalink**) 09-25-2009, 07:45 PM

Quote:

Originally Posted by jasonnoguchi

2% a year really isn't outstanding.

Are you aware of any 12-month CDs paying more than that? If you are, please share.

scfr · #5 (**permalink**) 09-26-2009, 06:49 AM

Radiance - Looks like a pretty sweet deal to me! The no minimum balance and the ability to withdraw without penalty under circumstances are what make it sweet.

There are a few CD's out there paying higher rates, but not with those kind of terms:
Bank Deals - Best Rates and Deals

On the "no penalty" clause, that could be a mixed blessing. Certainly if you lose your job and can't pay the rent or buy groceries, it would be nice to be able to get at the money without penalty. On the other hand, it might make the money TOO easy to get at. A nice thing about CDs with penalties is that they are a way to self-impose savings discipline. When I first started getting serious about saving (a couple decades ago), I would open small CDs ($50 or $100). I knew the money was there if I really needed it, but I also knew I'd incur that penalty. I never did cash out a CD early; I just wasn't willing to pay that penalty. The CDs helped me be more disciplined than I would have been otherwise. Now the discipline comes naturally, but it was something I had to learn and the CDs really helped.

Let us know if you decide to open the CD.

Ima saver · #6 (**permalink**) 09-26-2009, 08:49 AM

My bank pays 2% on a checking account with a $1000 minimum. I do know a bank that is paying 2.65 on a one year c.d. and it is fairly local also. (about 20 miles away)

shultice24 · #7 (**permalink**) 09-26-2009, 10:59 AM

I'm a bit wary of locking up money at a fixed rate for any considerable length of time right now.

If the Fed exerts their independence, and does what they need to do to stave off inflation, rates will probably need to go up soon. This past week Big Ben & Co all but declared the recession over, so this could be sooner rather than later. I'd sit on liquid cash and wait for rates to rise (as well as making sure you don't have all that much in cash, since it's also possible that they will allow significantly more inflation).

disneysteve · #8 (**permalink**) 09-26-2009, 01:10 PM

Quote:

Originally Posted by shultice24

I'm a bit wary of locking up money at a fixed rate for any considerable length of time right now.

If the Fed exerts their independence, and does what they need to do to stave off inflation, rates will probably need to go up soon. This past week Big Ben & Co all but declared the recession over, so this could be sooner rather than later. I'd sit on liquid cash and wait for rates to rise (as well as making sure you don't have all that much in cash, since it's also possible that they will allow significantly more inflation).

I agree that locking up money for a long period isn't wise at this point. I don't think, however, that 1 year qualifies as too long. Rates will go up but not tomorrow. If your money market is paying 0.1% and you can move it to a CD paying 2%, you're going to come out ahead over the next 12 months.

Ima saver · #9 (**permalink**) 09-26-2009, 02:05 PM

I locked some money up in a c.d. paying 4% and so far I am pretty happy with that.

investingnoob · #10 (**permalink**) 09-26-2009, 03:50 PM

I wish I would've bought ally 1 yr cd's when they were at 3% just a few months ago. Instead I waited and now I have a savings with them at 1.75%.

disneysteve · #11 (**permalink**) 09-26-2009, 04:06 PM

Quote:

Originally Posted by Ima saver

I do know a bank that is paying 2.65 on a one year c.d.

Julie, can you please post the info for that CD.

Ima saver · #12 (**permalink**) 09-26-2009, 04:18 PM

Yes, it is Community Bank and Trust in Hiawassee, Georgia. I have my 4% C.D. there. I got it in January.

shultice24 · #13 (**permalink**) 09-26-2009, 05:41 PM

Quote:

Originally Posted by disneysteve

If your money market is paying 0.1% and you can move it to a CD paying 2%, you're going to come out ahead over the next 12 months.

ING is paying 1.3% right now on regular savings, and for me and the few pennies that I have, the difference between 1.3% and 2% unfortunately doesn't add up too terribly fast.

disneysteve · #14 (**permalink**) 09-26-2009, 05:45 PM

Quote:

Originally Posted by shultice24

ING is paying 1.3% right now on regular savings, and for me and the few pennies that I have, the difference between 1.3% and 2% unfortunately doesn't add up too terribly fast.

It is true that the amount involved makes a difference. I just finished opening a $6,000 CD at 2.05%. That's about an extra $45 over an account earning 1.3%. Plus, the 2.05% is fixed and guaranteed for 12 months. The 1.3% could possibly go down. Since it is money I won't be needing, I'll take the higher rate.

shultice24 · #15 (**permalink**) 09-26-2009, 05:51 PM

Quote:

Originally Posted by disneysteve

It is true that the amount involved makes a difference. I just finished opening a $6,000 CD at 2.05%. That's about an extra $45 over an account earning 1.3%. Plus, the 2.05% is fixed and guaranteed for 12 months. The 1.3% could possibly go down. Since it is money I won't be needing, I'll take the higher rate.

Good point about money that you won't be needing. My largest ING account is my emergency fund, so I'd like to keep it as liquid as possible. If a genuine emergency arises, I don't want to forfeit months worth of interest in penalties just to get at it.

I figure though- if rates were to climb significantly higher (maybe 6-8% range?), I'll take the risk and lock at least some of it up for quite some time.

AtlantaLife&Health · #16 (**permalink**) 10-22-2009, 12:38 AM

They'll pay you 2% and then lend it out at about 15% or more. Banks are crooks.

amarowsky · #17 (**permalink**) 10-22-2009, 11:22 AM

i just put some of my extra cash into DTE stock, they seemed pretty stable and they're paying a 6% dividend on common stock. Didn't bother me doing it because it's not a lot of money.

2% just seems soo low that it would not be worth it, but I looked around a bit too and really you can't find much of anything over 2%.