With interest rates rapidlyincreasing, should I lock in a CD acct or need I consider an alternate route?

Question

It seems that so many financial institution are offering their competitive promotional CD interest rates. I would like to jump on the bandwagon in putting more funds in a relatively high yield acct. However, I am afraid to lock in funds in a long-term account versus leaving it in a demand account or a money market account.

Answer 1

Go to Citibankonline.com Check out the E-savings account. It is the best for liquid money at 4.75% And as rates go up, so will the rate. Best for short term money.

For over a year, look at a floating rate mutual fund. It buys shorterm corporate debt, and gets you about 5.35 to 6% interest.

XLACX or Highland Floating Rate Advantage class C is the best choice. Remember, you need to keep the money in the fund for 1 year, or their is a 1% penalty.

Answer 2

Look into I-Bonds. I Bonds are a low-risk, liquid savings product. While you own them they earn interest and protect you from inflation. You may purchase I Bonds via TreasuryDirect, at most local financial institutions or through payroll deduction. As a TreasuryDirect account holder, you can purchase, manage, and redeem I Bonds directly from your Web browser.

Answer 3

If you think rates are going to rise, why would you want to lock in a lower rate now? You should wait until they go up before doig that.