Or would this really not make money? What do you think the average is for a 1,000 dollar CD annually as far as interest?
2006-10-01 12:56:35 · 8 answers · asked by Anonymous in Business & Finance ➔ Investing
It might not seem like a lot of money, but it's still worth it. What are your other options? Putting it in a savings account? If you can make 5% on $1000 in a year, that's $50. The same $1000 would probably only earn you 0.5% in a savings account, or $5. As you save more, the amounts will look higher -- but in the end, it's all about leveraging what you have.
2006-10-01 13:01:49 · answer #1 · answered by Jason M 2 · 0⤊ 0⤋
It would depend on the method of interest earned and the rate gained on the funds. Compare that to what you would earn in a regular savings account, money market account, or just by doing nothing. You will certainly get some return, but if you think you may need the money then it wouldn't be worth it. Odds are, shop around, and most banks/credit unions, etc will be able to give you a calculations of estimated interest gained. Keep in mind though, many places will run specials for shorter term CDs, which may be a better option. Often you can get 6 month CDs for almost as high, or even higher than a 24 month CD! Read the fine print though :)
Example: If you're getting compounded interest at a rate of 3.96%, yielding 4.00% (fairly average for the current market) you would gain approx. $81.00 in interest over two years. Compare this to a basic savings account, a rate and yield of .50%, gaining you about $10.00.
2006-10-01 20:07:44 · answer #2 · answered by ShouldBeWorking 6 · 0⤊ 0⤋
Depends on what you mean by "worth it" - CD rates are higher than savings accounts. It's not going to make you a fortune - you can get a little better than 5% on a certificate, which would be a little over $100 for the two years. One and two year rates aren't a lot different these days, so might be worth temporizing with a shorter term CD.
2006-10-01 20:17:07 · answer #3 · answered by Judy 7 · 0⤊ 0⤋
Interest rates are very low now. I would go to Bankrate.com for rates on CD's, Money Market rates, etc.
You might be better off placing it in a money market account and wait for the interest rates to increase. I have been doing that lately. Good luck and happy savings.
2006-10-01 20:09:11 · answer #4 · answered by Ichiban 3 · 0⤊ 0⤋
If you want a guaranteed return, sure, go ahead and get your CD. But if it's money you think you will need, forget it. Invest only the money you won't need for the next two years.
2006-10-02 12:28:54 · answer #5 · answered by Mike S 7 · 0⤊ 0⤋
Regular saving accts. only pay 1/2 % Money Mkt. 1%, so I would say put it in a C.D. for 6Months to a year ,since rates are bound to go up. that is how I do it.
2006-10-01 22:17:53 · answer #6 · answered by Tired Old Man 7 · 0⤊ 0⤋
CD's generally lose money. Taxes and inflation eat the small "profit".
2006-10-02 03:22:28 · answer #7 · answered by Daniel P 2 · 0⤊ 0⤋
With that amount and changing interest rates, I would only go for one yr. at a time for a better investment.
2006-10-01 20:00:27 · answer #8 · answered by Vplayer 1 · 0⤊ 0⤋