Benefit of CDs vs. high yield savings

[kw79]

With a few banks offering high yield savings accounts (ING & Wamu at 5%, and now Citi at 4.65%) what is the benefit of tying up money in a CD for a year (or more) when it can be put in a high yield savings account at ING and you can have almost instant access to it in case you do need it.

 

Maybe i'm wrong, but it seems better to put it in one of these savings instead of a CD?

[Seabee]

I agree completely, unless you believe the interest rate on the savings will drop before the term of the CD is up. CDs used to be the only type of bank account where you could get this sort of rate, and I think a lot of people continue to think this way. Now that the gap is minimal, I opt for the regular high yield savings. At Emigrant, for $10,000 there is only a $15/year difference between a CD and their savings (CD: 5.20%; Sav: 5.05%).

[sabbath999]

Personally, until the Fed starts into the rate-cut cycle, I would stay away from CD's all together... when they start cutting rates (who KNOWS when/if they will), it's time to look at your options. IMHO.

[hegemony]

CDs of 12 months or less that pay higher than 5.05% APY which I am getting on my savings look good to me.

[54regcab]

CD's aren't woth the throuble IMHO. Very little return for locking your money for a year. Low risk mutual funds are a better bet for medium term savings.

[GolfNut]

amboy direct has the highest interest at 5.25% apy (5.13apr) available with no fees or minimum...

[hegemony]

amboy direct has the highest interest at 5.25% apy (5.13apr) available with no fees or minimum...

hsbcdirect has 6.0APY for new money until 4/30. the blended rate in 5.29.

[stockbroker`]

If you're ancient and retired, CD with monthly payments would be the best option since they pay the most. Rates wont go any higher from here IMO, so for fixed income people it would be smart to lock in.

[KYBOSH]

CD's aren't woth the throuble IMHO. Very little return for locking your money for a year. Low risk mutual funds are a better bet for medium term savings.

 

I completely agree.

 

For years I have been planning on laddering some CDs. Now that the rates are not much more than a high-yield savings account I am just keeping the money liquid in case of an emergency.