In an earlier post, I wrote that I am currently investing a large part of my savings in 2-5 year CDs. The rationale for doing this is the model developed in the book Beating the Dow with Bonds, by Michael O'Higgins. (More on this in a future post.) About a year ago, the model recommended being in short term T Bills. I substituted CDs for T Bills and accepted the downside risk of CDs being illiquid.
I also wrote that I simplify my life by buying CDs through my brokerage accounts with Schwab and TD Ameritrade. This minimizes my record keeping and I can do all my orders over the phone. Also, the rates are pretty competitive, if not the top interest rates. In July, I was able to get a 6% 5 year callable CD through Schwab. There is no addtional commission either because the broker charges are already built in the CD rate. WYSIWYG.
However, I know that some people like to find the absolute best rate available. For this I recommend Bank Deals - Best Rates and Deals, a blog I first read today. The author shares his latest CD rate finds and how to get CDs online. Also, his sponsor links provide some great additional deals, by state.
Full disclosure: I have accounts with Schwab and TD Ameritrade. Otherwise, I have no financial realtionship with Schwab, TD Ameritrade or the Bank Deals blog.
This is not financial advice. Please consult a professional advisor.
Copyright © 2006 Achievement Catalyst, LLC
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