Walk With Money » Certificates Of Deposit

The Amazing Power of Compound Interest

Robert Wilkinson — Fri, 16 Apr 2010 12:20:07 +0000

One of the most constructive, and destructive, forces in finances is the power of compound interest. Compound interest is interest that is not only paid on the principal, but also on the interest that previously accrued on your investment. On the other hand, compound interest can work against you — for instance, as finance charges against your credit card debt that could quickly snowball out of control. It can be a great burden, or a great boon. It all depends on the money choices you make.

Photo by thievingjoker via Flickr

Making Compound Interest Work for You

Compound interest can be a great gift to you if you avoid debt and get into the habit of saving your money. A high yield savings account can get you a 1.35% annual yield, but if you look into longer term certificates of deposit, you can get around 3.00%. And if you invest for the long-term in diversified investments, you can expect an even higher average annual returns.

When you put money into interest bearing accounts, or dividend yielding investments, you get paid for letting your money sit there. For example, if you have $1,000 and average 4.00% APY across your savings and investments, after a year, you’ll earn $40 in interest and dividend. If you let your money sit in your savings account and reinvest the dividend, the following year you will earn $41.60 — doesn’t sound like much, but your original $1,000 will turn into $1,423.31 after 10 years, $2,106.85 after 20, and $3,118.65 after 30!

Tips for helping compound interest work for you:

Start immediately to save and invest your money. The earlier you start, the more you will earn as compound interest works on your behalf. How much you start with isn’t as important as getting started.
Let the money sit. This is easiest in a retirement account. Simply leave the money alone. It will gradually build up on itself as the interest you earn is added to the principal amount you invested — and then interest is earned on the new ...

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Best CD Rates (Certificate of Deposit Rates), March 2010

Robert Wilkinson — Wed, 03 Mar 2010 09:20:16 +0000

The following is a list of the nationally available highest yields 12-month CD rates. In general, certificates of deposit (CDs) are great investments because your principal is protected by FDIC insurance and your interest rates are guaranteed. Moreover, you can use CD Ladder to make your CD savings more flexible and effective. You can open certificates of deposit at your local bank, but with a little more effort you can secure the best rates through online banks.

As of 3/2/2010, the highest yield CDs are:

Bank	Rate (APY)	Min Deposit	Details
Discover Bank CD	1.60%	$2,500	Choose terms from 6 months (1.00% APY) to 24 months (2.15% APY).
Ally Bank High-Yield CDs	1.58%	$0	Open with $0, No monthly fees, Daily compounded interest for maximum earnings, Automatic renewal at maturity, Ability to withdraw and receive earned interest as income — just let us know before the CD maturity date or by ten days after. Ten-Day Best Rate Guarantee to new and renewing CDs.
EverBank Yield Pledge Certificates of Deposit	1.49%	$1,500	Choose terms from 3 months (0.75% APY) to 5 years (3.37% APY), Low minimum of $1,500 to open your CD
Citibank CDs	0.80%	$500

Bank Rates Search Tool

Additionally, you can use the following bank rates tool from MoneyRates.com to find the right banking product for your need.

Alternative Savings And Investment Options

In addition to high yield savings accounts, there are other alternatives that may work for you.

Lending Club (average 9.65% APY*)

Savings Accounts vs. CDs: Where to Keep Your Money in 2010?

Robert Wilkinson — Fri, 22 Jan 2010 07:20:07 +0000

If you’re a savvy investor, you most certainly have a fair bit of cash tucked away for general spending and emergencies. The stock market is a long term investment and if 2009 taught us anything, it was to not have money you need to spend in the stock market. So where do you put the money you don’t want in the stock market?

There’s 3 main options to place your cash and get it FDIC insured for up to $250,000.

You can put your money in a checking account where you have fast and easy access to funds.
You can put your money in a savings account where you can take money out and put money in while still earning interest on your funds, or
You can put your money in a certificate of deposit, which typically has higher yields than savings but your money is locked into the account for the agreed upon term.

So where should you put your money? Well all 3 of course.

For money that you plan on spending you should keep in a checking account. It’s the easiest account to get money into and out of so it makes sense to keep spending money in it. You shouldn’t keep more than you need to however because you don’t get a return on your investment in a checking account.

This is where savings accounts and certificates of deposit jump into the picture. Your strategy becomes more complicated now because of the fact that you must lock in a rate when opening a CD.

So what is the best cash strategy for 2010?

If you pay attention to CD rates you know that they’re at the lowest levels since the 80s right now. So it doesn’t make much sense to lock in to a long term CD right now because they’re bound to increase when the unemployment rate drops and the Fed decides to raise interest rates. So there’s 2 main strategies you should consider. The first is to convert any maturing CDs you have into savings accounts.

The yields on savings accounts are not that much lower than what banks are offering on CDs so there isn’t that much incentive to lock in your money. You could keep your extra cash in savings accounts which will leave you ready to jump on a CD when rates start climbing back up. Just make sure you stay under the ...

Best CD Rates (Certificate of Deposit Rates), January 2010

Robert Wilkinson — Wed, 06 Jan 2010 01:20:07 +0000

1-Year CD With Highest Interest Rate

As of 1/5/2010, the highest yield CDs are:

Bank	Rate (APY)	Min Deposit	Details
Discover Bank CD	1.85%	$2,500	Choose terms from 3 months (0.75% APY) to 10 years (3.70% APY), 12-month Penalty-free CD (1.85%).
Ally Bank High-Yield CDs	1.80%	$0	Open with $0, No monthly fees, Daily compounded interest for maximum earnings, Automatic renewal at maturity, Ability to withdraw and receive earned interest as income — just let us know before the CD maturity date or by ten days after. Ten-Day Best Rate Guarantee to new and renewing CDs.
EverBank Yield Pledge Certificates of Deposit	1.65%	$1,500	Choose terms from 3 months (0.95% APY) to 5 years (3.04% APY), Low minimum of $1,500 to open your CD
Citibank CDs	1.01%	$500

Bank Rates Search Tool

Additionally, you can use the following tool from MoneyRates.com to find the right banking product for your need.

If you are looking for different length CD and more banks, I recommend that you try MoneyAisle to help you find the best CD rates for your desired term.

Alternative Savings And Investment Options

In addition to high yield savings accounts, there are other alternatives that may work for you.

Lending Club (average 9.65% APY*)

Personal Finance 101: What Does FDIC Insurance Really Mean?

Robert Wilkinson — Sun, 06 Dec 2009 17:20:21 +0000

One of the biggest things I inspire people to look for when they open a financial institution account is that the financial institution is FDIC insured. Most banks working in the United States offer this insurance. In an era where people are much more than a small worried about financial institution failures and the like, FDIC insurance is vital.

But what exactly is it?

Charlie writes in:

What exactly is FDIC insurance? How does it function? [A local financial institution] went under recently and appears to have been bought out by another financial institution and from what I understand the accounts are intact. Is that FDIC insurance at function?

(I edited out the financial institution in Charlie’s query for privacy reasons.)

What Is FDIC Insurance coverage?
FDIC insurance refers to insurance policies created by the Federal Deposit Insurance coverage Corporation, which is an organization wholly run by the government of the United States. The FDIC sells insurance policies to banks which insures the checking and savings accounts at those banks against the failure of those banks. Thus, when you open an account with a financial institution, that financial institution purchases insurance on that account for you from the FDIC.

FDIC insurance covers checking accounts, savings accounts, certificates of deposit, cash market accounts, and cashier’s checks. It does not cover stocks, bonds, mutual funds, cash market accounts, US treasuries, safe deposit box contents, or other this kind of objects.

Most banks that operate in the United States buy this insurance. When they do, they’re required to show the FDIC logo on indicators in their business as nicely as on their web sites.

FDIC insurance insures deposits up to ...

What To Do When Your CD Matures

Robert Wilkinson — Fri, 23 Oct 2009 00:20:47 +0000

We put our emergency fund into a CD ladder and every month one of those certificates of deposit matures and is automatically renewed. As an added bonus, ING Direct, where our CDs live, gives us a CD rollover bonus whenever we renew (currently the bonus is 0.15% on CDs of at least 12-months long). For us, the decision is simple. It’s a CD ladder and you simply renew the CD each month for the 12 month term.

What if you’re money isn’t in a CD because it’s part of a CD ladder, what should you do?

My goal is always to maximize the interest rate while minimizing my headache. Our CD ladder isn’t at ING Direct because they offered the best 12 month CD rates (though they currently do, especially after you factor in the rollover bonus or the new money bonus), it’s because it was the simplest online savings account available when we set up the ladder.

1. Decide whether you ...

John’s “Campground” – Some Thoughts on Investing with Added Personal Value

Robert Wilkinson — Thu, 30 Jul 2009 18:20:03 +0000

A although back once more once more,ote about >>>>my greatest buddy (besides my wife), John<<<<. John doesncff017 make investmes y frivolous problems at all - he spends way a lot much less than he earns and is really cautious with his money, saving up for the lengthy phrase. He lives in a very small apartment in a inadequate neighborhood, bicycles to carry out, and doesn’t engage in any costly hobbies.

Till lately, he had been socking his money away in an ordinary monetary financial savings account. He bought a few of of certificates of deposit along the way to enhance his monetary financiasavings charge, but he was (and nonetheless is) fairly threat-averse. He had no curiosity in placing his money at threat.

A amount of months in the past, he shocked me by announcing he had bought twenty acres of undeveloped land inside driving distance of Des Moines, a fairly severe investment. Given how threat-averse John was with his money, the purchase really shocked me - he by no indicates struck me as a real estate developer.

Lately, he invited my family down to the land to camp for the weekend - he had needed to “clear it up” some prior to we checked it out.

We had been really impressed.

It turns out that John spends many of his completely totally free evenings down on this patch of land, clearing away brush, constructing strolling trails in the wooded region, and constructing a small camping region. He constructed a picnic table there and a fire ring and produced great piles out of the brush he had lower, perfect for small campfires.

The huge vast majority of the land is a big, fairly flat prairie, with a small creek on one edge of the land and woodlands covering perhaps a 3rd of the land. As we hiked all a lot more than the land (with our children in tow), John stored pointing out all of the problems he had carried out to enhance problems. He had lower back once more once more poison vines correct here, cleared brush there, produced a trail correct here, collected berries there, and so on.

It was obvious he was totenjoying the land.

I ...

Walk With Money » Certificates Of Deposit

The Amazing Power of Compound Interest

Making Compound Interest Work for You

Tips for helping compound interest work for you:

Related Searches:

Best CD Rates (Certificate of Deposit Rates), March 2010

Bank Rates Search Tool

Alternative Savings And Investment Options

Lending Club (average 9.65% APY*)

Savings Accounts vs. CDs: Where to Keep Your Money in 2010?

Best CD Rates (Certificate of Deposit Rates), January 2010

1-Year CD With Highest Interest Rate

Bank Rates Search Tool

Alternative Savings And Investment Options

Lending Club (average 9.65% APY*)

Related Searches:

Personal Finance 101: What Does FDIC Insurance Really Mean?

Related Searches:

What To Do When Your CD Matures

John’s “Campground” – Some Thoughts on Investing with Added Personal Value