The one-rung ladder
May 29, 2009
I’ve just locked up $10k in a one year CD.
It would have been more prudent to ladder them, but there aren’t any rates that are worth locking up the money for any amount of time apart from the one year term for which I’m earning a whopping 2.25 APY. At that price, it’s still twice as much interest as the formerly high-yield online savings accounts. Remember when those were the five magic words? I loved saying it, back in ought-one, the days of 5.35% APY: High-Yield Online Savings Accounts. Mmm…. delicious.
Oh, right, back to reality. What a drear existence for cash monies these days: interest-bearing checking accounts are barely registering on the interest scale at 0.10%.
This was what you could call an impulse investment. It wasn’t a scientifically, mathematically or otherwise analytically sound decision based on how much money I could afford to have locked away for 12 months. It was a nice round number, and I figured in a mental, back of the envelope calculation that it leaves me with approximately 20K in savings. That’d get me through 12 months of no income before breaking into the CD. (Worst case scenarios around here, all the time.)
Works for me.
How about you? What are you doing with your money? Or is it just lollygagging about like the rest of mine?