With the Fed raising interest rates, the interest paid on CDs and Treasuries has risen also, to respectable levels. One year ago, I was only able to get 0.1% on a 1 year CD. Now 1 year CDs are in the 1.25-1.4% range. 2 year CDs are paying 2.20%. Much better than the savings/sweep accounts are paying only 0.01%.
Yeah, I know, inflation is coming. However, these funds are intended to be available when needed. Thus, doing a CD/Treasuring ladder is an acceptable alternative to get higher interest rates while waiting. Currently, I am only laddering out to 3 years since the yield curve is flattening after 2 years.
Hopefully, inflation will get under control. But if CD/Treasury rates go up to 5% or higher, I will definitely add more funds to fixed income.
This is not financial nor investment advice. Please consult a professional advisor.
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