anyone like CD 's (time / term deposits)?
- Thread starter crinkles
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Part of the reason that they pay higher interest is that they aren't covered by the Gov's insurance on deposits in regular savings accounts.
Then you pay your top marginal rate on all interest earned too.
Honestly, they (the system) don't really want people to save.
Then you pay your top marginal rate on all interest earned too.
Honestly, they (the system) don't really want people to save.
Are you sure about that? From fdic.gov[1]:
"Investors searching for relatively low-risk investments that can easily be converted into cash often turn to certificates of deposit (CDs). A CD is a special type of deposit account with a bank or thrift institution that typically offers a higher rate of interest than a regular savings account. Unlike other investments, CDs feature federal deposit insurance up to $250,000."
robert
[1] http://www.fdic.gov/deposit/deposits/certificate/index.html
"Investors searching for relatively low-risk investments that can easily be converted into cash often turn to certificates of deposit (CDs). A CD is a special type of deposit account with a bank or thrift institution that typically offers a higher rate of interest than a regular savings account. Unlike other investments, CDs feature federal deposit insurance up to $250,000."
robert
[1] http://www.fdic.gov/deposit/deposits/certificate/index.html
6% is 6%... i don't believe that term deposits are treated any differently than regular savings in terms of guarantee/insurance. now, and before the GFC.
the govt guarantee is now over; all bank deposits are now un insured/guaranteed.
The US has insurance on 100k in their banks since the great depression.
in any case, the mighty commonwealth bank is pretty secure. my FIL said if they go broke the government is broke.
can someone say iceland ?
the govt guarantee is now over; all bank deposits are now un insured/guaranteed.
The US has insurance on 100k in their banks since the great depression.
in any case, the mighty commonwealth bank is pretty secure. my FIL said if they go broke the government is broke.
can someone say iceland ?
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Originally Posted By: robertcope
Are you sure about that? From fdic.gov[1]:
"Investors searching for relatively low-risk investments that can easily be converted into cash often turn to certificates of deposit (CDs). A CD is a special type of deposit account with a bank or thrift institution that typically offers a higher rate of interest than a regular savings account. Unlike other investments, CDs feature federal deposit insurance up to $250,000."
robert
[1] http://www.fdic.gov/deposit/deposits/certificate/index.html
hey rob, that is great but bank of america only gives like 0.2% on CD's... LOL
Are you sure about that? From fdic.gov[1]:
"Investors searching for relatively low-risk investments that can easily be converted into cash often turn to certificates of deposit (CDs). A CD is a special type of deposit account with a bank or thrift institution that typically offers a higher rate of interest than a regular savings account. Unlike other investments, CDs feature federal deposit insurance up to $250,000."
robert
[1] http://www.fdic.gov/deposit/deposits/certificate/index.html
hey rob, that is great but bank of america only gives like 0.2% on CD's... LOL
Originally Posted By: crinkles
hey rob, that is great but bank of america only gives like 0.2% on CD's... LOL
Sure, I was just pointing out that the "fact" stated in the first reply was 100% incorrect.
I'm not a financial wizard, but I wouldn't be surprised if right now a high interest savings account at a place like ING wouldn't be a better place to put money than a CD; ING's rates may go up in the near future, where the CDs rates are locked at what are probably all-time lows. Don't quote me on any of this, though, I haven't done the research to validate it.
robert
hey rob, that is great but bank of america only gives like 0.2% on CD's... LOL
Sure, I was just pointing out that the "fact" stated in the first reply was 100% incorrect.
I'm not a financial wizard, but I wouldn't be surprised if right now a high interest savings account at a place like ING wouldn't be a better place to put money than a CD; ING's rates may go up in the near future, where the CDs rates are locked at what are probably all-time lows. Don't quote me on any of this, though, I haven't done the research to validate it.
robert
robert, in australia there is no similar guarantee to the one in the US. we had one up to $1m in the GFC but that got cancelled.
FWIW, ING's cash rate is 4.25% down under at the moment.
so it looks like the tables are turned so to speak up there.
FWIW, ING's cash rate is 4.25% down under at the moment.
so it looks like the tables are turned so to speak up there.
Originally Posted By: Shannow
Happy to be 100% wrong, just recounting my discussions (some years ago) with my local bank regarding the security of term deposits versus regular accounts.
Fine, 100% wrong.
only wrong if you were in america.
Happy to be 100% wrong, just recounting my discussions (some years ago) with my local bank regarding the security of term deposits versus regular accounts.
Fine, 100% wrong.
only wrong if you were in america.
Robert, this is a guy from Wales and a guy from Australia talking.
Yes, here in the USA is would be FDIC insured, but you'd get <.5%. To get 6% here, it would need to be a BBB corp bond, which wouldn't be FDIC insured. No CD will pay that under our regulations.
Yes, here in the USA is would be FDIC insured, but you'd get <.5%. To get 6% here, it would need to be a BBB corp bond, which wouldn't be FDIC insured. No CD will pay that under our regulations.
Originally Posted By: bepperb
Robert, this is a guy from Wales and a guy from Australia talking.
I think he missed that.
Robert, this is a guy from Wales and a guy from Australia talking.
I think he missed that.
JHZR2
Staff member
Wow, wonder ifi can save in CDs from a downunder bank.
CDs here suck........they have really tanked over the last few years.
Maybe I should start a CD investment company using Australian banks. That's a good rate.
Maybe I should start a CD investment company using Australian banks. That's a good rate.
Originally Posted By: JHZR2
Wow, wonder if i can save in CDs from a downunder bank.
Try EverBank AUS and NZ have some of the highest rates.
Of course, you have to worry about currency fluctuations and the fees the bank skims from you to convert your USD to a Foreign Currency.
It's true. The Australian Govt has dropped their bank guarantees starting the end of March: Australia to end bank and funding guarantees.
Thus their banks are offering 5-6% CD rates to attract depositors to help keep their banks reserves up. And their currency strong (not that it helps when their Govt continues to spend, spend spend = borrow, borrow, borrow from their banks). Look for higher borrowing rates in Australia, too (Credit Cards, Mortgages, etc.)
In the 70s, US Mortgage rates were as high as 19-21%. But Money Market savings rates were around 12%, better than the US Stock Market then. (Banks earn money on the spread, obviously.) So if you had money, you were sitting pretty. If you were in debt, you were taken to the cleaners. And if you had a Variable Rate Credit Card or Mortgage, you were sunk.
The USA won't be far behind when the Banks will have to raise their rates to make up for their losses once similar US Federal Reserve guarantees (Stimulus money) wears off.
Solution? STAY OUT OF DEBT!
Wow, wonder if i can save in CDs from a downunder bank.
Try EverBank AUS and NZ have some of the highest rates.
Of course, you have to worry about currency fluctuations and the fees the bank skims from you to convert your USD to a Foreign Currency.
It's true. The Australian Govt has dropped their bank guarantees starting the end of March: Australia to end bank and funding guarantees.
Thus their banks are offering 5-6% CD rates to attract depositors to help keep their banks reserves up. And their currency strong (not that it helps when their Govt continues to spend, spend spend = borrow, borrow, borrow from their banks). Look for higher borrowing rates in Australia, too (Credit Cards, Mortgages, etc.)
In the 70s, US Mortgage rates were as high as 19-21%. But Money Market savings rates were around 12%, better than the US Stock Market then. (Banks earn money on the spread, obviously.) So if you had money, you were sitting pretty. If you were in debt, you were taken to the cleaners. And if you had a Variable Rate Credit Card or Mortgage, you were sunk.
The USA won't be far behind when the Banks will have to raise their rates to make up for their losses once similar US Federal Reserve guarantees (Stimulus money) wears off.
Solution? STAY OUT OF DEBT!
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