How safe is a CD really if the rate of return is extraordinarily low? If you do a little math, you can actually lose out on money due to factors such as inflation and taxation.
Looking a simple snapshot from 2011 to 2017, the average six-month CD rate was less than 1%. Did you really have to sacrifice a decent rate of return and endure 7 years of bad luck to protect your principal?
Perhaps some ultra-conservative investors still have no interest (no pun intended) in finding a better yet equally safe CD option, but it’s important to at least be aware that safe options do exist. For these low rates, it’s likely worth it to find out if a particular alternative is suitable for you.
Were you happy with these results?:
Year – Average 6 Month CD Rate
2011 – .42%
2012 – .44%
2013 – .20%
2014 – .13%
2015 – .13%
2016 – .14%
2017 – .17%
Source: Market Commentary 27807, March 2018 Data; www.forecast-chart.com/year-cd-interest
Your personal Wealth Preservation Consultant, accountant or retirement distribution planning professional can help you understand what CD alternatives may be available to you and are suitable for your personal planning strategies and goals.