Bank of America offers a high yielding 10-month CD with 5% interest rate. I found a money market savings account through eloan that offers 5.5 % interest. Are both of these types of accounts safe or is one safer. Which is better for short term (1 to 2 years) investing?
2006-10-16 18:39:35 · 5 answers · asked by bwiley123 2 in Business & Finance ➔ Investing
As far as safety goes, they should both be the same assuming that eloan has the same FDIC protection that BofA has. They main difference between the two accounts is that typically money market accounts have rates that can change at any time while CD rates are fixed for the term of the CD. These aren't investments where you run the risk of principle being lost like when you buy stock for example
2006-10-16 18:44:51 · answer #1 · answered by fiskeri 3 · 1⤊ 0⤋
Wow, communicate approximately conservative. Do you have short term plans to spend that funds marketplace fund or CD funds? If not, there's a place to bypass up slightly in direction of larger return investments, mutually with listed mutual funds. the fee for liquidity is return on investment. you would be wanting to maintain a number of that earnings that MM fund as an emergency fund. 2 or 3 month's earnings's worth is seen ok. $16k in a retirement fund at 35? there is yet another place you need to be doing slightly greater saving, except you have a 401k you're actually not speaking approximately. BTW, 5% isn't something to smell at whilst financial organization MM accts had in basic terms been yielding 2.5% in the past taxes. yet another style of sorta-risk-free making an investment are the existence cycle mutual funds, the place the money is invested in growth shares early on and right now shifted to safer investments the nearer to adulthood they arrive. i'm guessing your own loan is a collection fee 15 or 30 year. stay with it and proceed to pay the month-to-month charge in basic terms. for the reason which you opt for liquidity, it quite is not clever to pay down the central early.
2016-11-23 15:39:38 · answer #2 · answered by ? 4 · 0⤊ 0⤋
They are incredibly safe.
You should realize that a CD is a money market instruments. When we say "money market" we include CDs, T-Bills, Commercial Paper (CP), Banker's Acceptances, etc.
To give you an idea how safe, there were 11 defaults out of 4364 CP issues rated by Moody during 972-2000. Every one of those defaults was because of a liquidity crisis -- and each one was eventually paid.
2006-10-17 03:21:08 · answer #3 · answered by Ranto 7 · 0⤊ 0⤋
CD, if u Really want to make money....Hedge Funds
2006-10-16 18:41:14 · answer #4 · answered by Anonymous · 0⤊ 0⤋
please don't call 5% "high-yielding" as losing $$ after taxes and inflation there. Both equally safe & equally bad.
2006-10-17 04:58:32 · answer #5 · answered by vegas_iwish 5 · 0⤊ 1⤋