With the current economic problems and the volatility in the stock market, people want to find out how to get the best interest rates. They are nervous about investing and want to be sure their money is absolutely safe. Often people will choose a lower rate of return now just to ensure that their investment is secure. So what options are available if you have some money to invest and want to earn more interest than checking and savings accounts are paying?
Probably the safest choice are bank certificates of deposit (CDs) since they are guaranteed by the FDIC, which is a federal government agency. You have to trust in this FDIC insurance, because if it failed it would mean that the U.S. government also failed and chaos erupted. Sadly, CDs are only paying around one percent, which is a historically very low return rate.
But, surprisingly, you do not always get the best interest rate by choosing a CD with the longest term. You may notice that a bank’s rate for a 15-year or 30-year CD is actually lower than the rate for shorter term investments. And special promotions may get you the best rate for a shorter term CD.
Many seniors and retirees, rely on income earned through interest to assist in providing the money that they need for every day living, so, for these people, low interest rates can be devastating. Younger individuals may see more benefit from stock investment despite the risk, while older individuals should avoid putting their money here. For the young, they can afford to live through the ups and downs of the market, and allow their stock investment to pay off over a long period, while older people are looking for an investment that will provide funds right away, and consistently.
Other safe options are to buy Treasury bills or just keep cash. T-bills are paying even less than CD’s though, and you are almost loaning your money to the U.S. government for free. You might decide to not invest it in anything and just keep cash but then inflation is going to eat away the value of your money. It is a difficult time for everyone right now with this horrible economy and dire financial situation.
Are you trying to find information about CDs vs Treasury notes? If you are you might take a look at Best CD Interest Rate where you will find more information.
categories: interest rates,seniors,retirement,saving,stock market,stocks,cd,certificate of deposit,banks,wall street,banking
Tags: banking, banks, cd, certificate of deposit, interest rates, retirement, saving, seniors, stock market, stocks, wall street