2006-08-07 16:13:42 · 5 answers · asked by Bluebeard 1 in Business & Finance ➔ Investing
Buying a CD is often not the best choice because the interest is not compounded like a bond and the CD is not able to be resold. This means you have to wait till maturity and if you redeem early not only can you loose interest, you can loose principle. Another factor is that you are essentially making a loan to the bank and banks do go under. So make sure that you are receiving a higher rate of interest then loaning money to the perfect borrower (the US Government). Current 3-month T-bills are around 5.05 and you should receive compensation for lending to a business with a higher credit risk. A better plan would be if you have over a thousand dollars, you could invest in T-bills and buy them directly from the government at www.publicdebt.gov. T-bills are so liquid they are often considered cash. Also brokers charge a large premium that often makes CD not even comparable to T-bills.
2006-08-07 17:49:57 · answer #1 · answered by 1 1 · 0⤊ 0⤋
Start looking around on your own. You might get better results than a broker that might have some interest in there recommendation
2006-08-08 00:24:14 · answer #2 · answered by Grandpa Shark 7 · 0⤊ 0⤋
Sure, and you have to be careful. Be aware of CALL DATES and MATURITY DATES... and realize that if a bank needs a broker to sell their CDs that better options are probably available to you elsewhere.
2006-08-09 11:10:12 · answer #3 · answered by Mike S 7 · 0⤊ 0⤋
Yes, I bought my CD through my broker etrade. they give me good rate though
2006-08-08 02:07:52 · answer #4 · answered by Hoa N 6 · 0⤊ 0⤋
why just buy at bank
2006-08-07 23:37:03 · answer #5 · answered by HEY boo boo 6 · 0⤊ 0⤋