CDs: 7 Years of Bad Luck?

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.

More Updates

CRDS AND ROTH CONVERSIONS – ABUSE OF THE RULES?

The coronavirus-related distribution (CRD) rules for Roth conversions have a gaping hole. An “affected person” (as we have defined in previous blogs), is entitled under the CARES Act to withdraw up to $100,000 from their IRA or workplace retirement plan. A CRD avoids the 10% early distribution penalty for those under 59 1/2, can be

Read More »

Rolling Over an RMD

Like most people’s lives, the retirement world is upside down. This is made evident by a single statement: “Required minimum distributions (RMDs) can be rolled over.” Yes, that is the new normal—at least for this year. RMDs are considered the first money out of an IRA and workplace plan. Typically, these dollars are ineligible to

Read More »

Tapping Into Retirement Accounts If Not Directly Impacted By COVID-19

The recently-­‐enacted Coronavirus Aid, Relief, and  Economic Security Act (CARES  Act) signed by President Trump  on  March  27, 2020, allows  “qualified individuals” to take up  to  $100,000 of  penalty-­‐free IRA and company plan withdrawals during 2020. “Qualified individuals” include those who are (or whose family members are) sickened by the virus or who have virus-­‐related

Read More »
Scroll to Top