As you know, the Federal Reserve raised interest rates recently, and we've gotten several questions from clients wondering
CD Rates are Rising, But There Are Alternatives
By: David Smyth, February 23, 2017
Have you noticed recent ads in the newspaper, or at your local bank branch, for CDs lately? We've seen that rates are on the rise, and wanted to pass this information along to you, our valued clients (and prospective clients!).
Certificates of deposit (CDs) can be a great tool to have within your overall financial portfolio, but when rates are this low, it may seem like a waste of time to try and eek out a 1 percent return. Keep in mind, however, that fixed-rate CD will pay the same interest rate throughout the life of the CD.
If you believe that interest rates are going to continue to rise over the next few years, then you might want to take five or 10 minutes out of your day to call us, or just sit down with Alex, Brandon or me and chat about some alternative strategies to these low-yielding CDs. There are a variety of alternative options for those of you who are looking for a little more yield and are okay with the idea of taking a little more risk with the goal of obtaining a higher reward.
In addition, for those of you who may have set up CD ladders at your bank or credit union, where every month you have a CD coming due and you have to decide whether to reinvest or take the cash and do something different, it may seem like an inconvenience to be asked on a monthly basis if you want to reinvest for another few dollars of interest. I also have alternatives to that strategy that I'd be more than willing to share with you.
Now, you may think, Dave, isn't it a waste of your time to talk to me about how to make an extra $100 or $100,000 (depending on your portfolio size)? My answer to that is, absolutely not. My interest is in continuing to educate not only my current clients, but all of you who are reading this who don't do business with our team yet, so we can help you maximize the returns on your hard-earned savings - whether that's a few bucks in a CD or bond, or just helping you tweak your portfolio so we can increase your dividends and the monthly income you need to live the retirement you deserve. No matter your stage of life, we have an interest in working with you.
Let us know if you'd like to do a quick call, or sit down over a cup of coffee and see if we can help you. Call us any time at 859.219.1006. We'd love to hear from you.