However, the fixed income investor who holds bonds/CDs to maturity or the money market investor is likely very happy. For them, the return on their new investment purchases will increase. To me, now is the time to make a some CD purchases to lock in higher interest rates for the short term.
On June 22, 2007, I purchased CDs paying 5.25% that mature on September 22, 2008. That's 18 months of 5.25% return, risk free since the CDs are FDIC insured. I purchased my CDs through TD Ameritrade, over the phone. I prefer to purchase CDs through my discount brokerage accounts, TD Ameritrade or Schwab, to keep all my CDs in one place and avoid paperwork and transportation time needed at a local bank.
If preferred, one can find the absolute best CD rates of the week at Bank Deals weekly rate round up every Saturday. For instance, on July 7, 2007, Bank Deals lists four banks that will pay 5.4 to 5.5 % for an 18 month CD, which is better than the 5.25% I got above.
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This is not financial advice. Please consult a professional advisor.
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