What are the pros and cons of a long term/short term CD account?

Question

IM debating between a short and long term CD? Does it all come down to when I am going to need it?

Answer 1

Long term ties your money up for a longer period of time. This is the con if you are going to need the money. You will get a higher rate of return on these. Short terms tie your money up or a shorter period of time, but you pay for it by getting a lower rate of return.

Answer 2

usually short term cd accounts pay slightly less interest than long term accounts, but the difference tends to be less than 1%. If your wanting to collect interest and save money, open a paypal account which pays 5.02% and also includes a free debit card that pays 1% cash back on any transaction that doesn't require a pin number i.e gas and fast food. Paypal also has no minimum balance requirement, no time limits and credits your interest at the end of each month and your cash back from debit purchases as soon as the transaction begins processing.

Answer 3

I wouldnt call Paypal as a investing option. Even at 5%, there are much safer a better paying options than CD's, and Paypal. You get higher returns and money is safe.

Let me know if you need help.

Regards