# Should we open a CD?



## Colleen (Sep 4, 2022)

Our online bank that we have mainly for savings has CD rates currently at 3% for a 3-year term. Would this be a good time to open a CD at this rate or would something else be better?


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## HoneyNut (Sep 4, 2022)

I'm guessing it depends what that money would be used for if not in a CD.  If you were planning to invest it in stocks, I'd think that would be preferable since the prices are currently low and _*averaged over time*_ the S&P goes up about 10% a year.  But if the money is cash you don't expect to need but want to be in a form you could easily get to in an emergency (without having the risk of selling low and losing money if it were in stocks) and especially if right now it is just sitting in an ordinary savings account making much less than 3%, then the CD option is great.


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## HoneyNut (Sep 4, 2022)

Colleen said:


> open a CD at this rate or would something else be better?


I glanced at CDs being offered and it looks like you could do better than 3% (a lot offered at 3.4%), but I'm still learning about all these finance things and I'm not sure what the 'call protected' status means for CDs, I would have thought all CDs were call protected but I guess not...


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## Pepper (Sep 4, 2022)

Never heard of a callable CD before.  Is this something new?


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## ManjaroKDE (Sep 4, 2022)

I have been buying CDs since June 1st.  I have accumulated 10 now starting with the initial purchase price of $500 (min at Marcus or Capital One) others were higher min.  Now I'm buying $1,000 face value.  At first the interest rate was 1.75%, I'm now getting 2.70%.  I was buying dividend stocks since April but the market was up & down, against my liking.  I did make a little back when I sold them all and moved to safer CDs.  Goldman Sachs didn't play nice with my Linux Sys, sold the 2 CDs I had there losing a small fee amount.

I'll have to claim a $300 capital gain from stocks next April.  The stock market has been like a reverse 'bunny hop' one step forward, 3 steps back.  Being retired and don't plan any long term growth with my CDs.  I buy only 12 month maturity rather than longer.  @mathjak107 was helpful and mentioned CD ladders.  Min was too cost restrictive for me.

Googling 'call protection' brought up this info that I didn't like, 'call protection' feature where *your CD is practically 'untouchable' for a certain period*. But as soon as the call protection period expires, the bank can then close your current CD account and reinvest it in a new CD with a lower rate.


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## mathjak107 (Sep 4, 2022)

I get one year CDs at  3% at fidelity ..no way would I go three years for the same thing


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## ronaldj (Sep 4, 2022)

we have several and one just ended, I renewed it for five years.  Not that good of interest but I like my local bank and they are easy to get to if you need the money.


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## HarryHawk (Sep 4, 2022)

You may want to check into buying t-bills, they are paying over 3% for 26 weeks, maybe less.  If you think interest rates will be going up, you don't want to tie your money up for any longer than necessary.  Of course if you think interest rates are going down, then you want to lock in the rate longer.

You can buy t-bills yourself thru Treasury Direct or buy them thru  brokers like Fidelity or Schwab.

T-bills are as safer if not safer than money in a bank.


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## Lawrence (Sep 4, 2022)

We have two or three CDs as a financial person suggested to us. One third of our money is in each CD and the renew date on each one is staggered on each one. So, if we need the money or want to add to one, we can as time goes on.


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