Is today a good time to invest in a CD?

 

Investing in CDs.

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Personal financial advisors believe it is.

A recent news item on investopedia suggests that depositing money into a CD  may help to reach the goal of earning an extra $2,000 over the next 12 months.

The report further suggests that In the next 12 months, there’s a real possibility that the Fed will lower rates.

If that happens, CD and savings rates will follow suit and also drop. Locking in a high-paying CD now can help you enjoy 5.00% interest rates for longer, even if other rates drop. 

What is a Certificate of Deposit?

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A certificate of deposit (CD) is a savings account that pays a fixed interest rate on money deposited and held for an agreed period of time.

A withdrawal before agreed period attracts an early withdrawal penalty.

What are the things that make an investment in CDs attractive?

1. An investment in CD has low risk, is safe (if you open a CD with a bank that’s insured) and requires no monitoring.

2. A CD offers a fixed interest rate (Annual Percentage Yield-APY) that is usually higher that interests on other bank's traditional savings accounts.

Is Short Term Thinking A Common Crypto currency Investments Mistake?

Shelby M.C. Davis says, “Invest for the long haul. Don’t get too greedy and don’t get too scared.” 

And Warren Buffett believes, “The stock market is a device to transfer money from the impatient to the patient.”

So? Do these investments gurus’ pieces of advice suggest that long term crypto currency investments are better than investing in crypto for the short term?

You would find your answer after considering the following factors;

1. The size of your net worth..

2. Your personal investment goals

3. Risk tolerance.

1. The size of your net worth. 

Someone in a weaker financial situation would more likely want to invest in crypto for the short term as opposed to a higher net worth individual.

You wouldn’t want to tie down your money in a long term investment in crypto currencies when you have many needs and wants competing for fewer funds in your possession, would you?

 Building your financial fortune quickly would certainly be one of your personal investment goals. 

2. What are your personal investment goals? 

 Your investment goals are a product of your  present financial situation.

A long term investment in crypto would be one of your investment goals when you’re in a stronger financial situation.

After assessing your net worth and investment goals , you may want to assess your risk tolerance before deciding on either short or long term investment in crypto.

3. What is risk tolerance? This is your ability and preparedness to absorb a decline in the value of your investments. It varies from person to person.

Disclaimer: Financial information published here is only for informational purpose and not an investment advice.