Finance - Last call for high rates

[computerwiz]

Last chance to lock in your money for high interest rates (in the US).  They are more than likely going to start dropping in 2 days.

 

Consider opening a CD to lock in the rates....if you don't need to touch that money for a long time.

 

https://www.nerdwallet.com/best/banking/cd-rates

[Tortuga]

Just a side note: If someone is planning to retire from their job soon and if they are trying to decide whether to take their retirement annuity as a monthly payment or a lumpsum, the interest rates affect the lumpsum calculation. As the interest rates drop, the lumpsum calculation goes up, so over a set period of time the lumpsum at the prevailing interest rate will equal the annuity payment. As interest rates go up, the lumpsum calculation will be less, since less money is needed at the higher rates to match the annuity payment over a set period of time.

 

So, it you plan to retire this year and are considering taking a lumpsum, think about waiting until after the interest rates drop.. 

[Witness1970]

On 9/16/2024 at 11:27 AM, computerwiz said:

Last chance to lock in your money for high interest rates (in the US).  They are more than likely going to start dropping in 2 days.

 

Consider opening a CD to lock in the rates....if you don't need to touch that money for a long time.

 

https://www.nerdwallet.com/best/banking/cd-rates

I read something on Clark Howard recently about what was called a CD ladder.  It might be a good time to get into something else besides the stock market!  (And into something which has a fixed interest rate.)

 

The way a CD ladder works is you take any money you can spare (not money you need to live on) and divide it into 5 piles.  You invest each pile of money into a CD of varying length, 1-yr, 2-yr, 3-yr, 4-yr, and 5-yr.  You will have one CD maturing each year.

 

When the first CD matures, you reinvest what you can afford to in a new 5-yr CD.  You do this each year, and you always have a CD maturing in 12 months or less.

 

That helps if you don't want to put too much into a 5-yr CD and not be able to touch the funds for 5 years.  With some CD's you can put in as little as $1,000.00 as the original investment.  It is certainly better than having thousands of dollars in a bank account betting 0.3% APY.  

 

I guess I could keep doing this until the beginning of the GT, or my death, whichever comes first.

 

Just a thought.