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Small Investment CD or Bond?
I am doing small investment from my son's savings. He has about $1500. We are using 6 month or 7 month CD, but it does not gives us enough. He do not need to spent money within next 5 years. Do you think US savings bond is a better way to save money? IF so, which one we should buy if we are not planning to take money back for 5 -6 years?
Long term CD will lock us up and we cannot change it if rate goes up.
5 Answers
- Anonymous1 decade agoFavorite Answer
Although CDs are indeed paying very poorly today, if you stick your son's money into savings bonds the poor rate is locked in for 5 years. And indeed it is a poor rate. Eventually, CD rates will go up. Do however shop around. Sometimes local banks are having specials on CDs. Also keep your CDs short term, max of 18 months.
- 1 decade ago
I would go for neither of them. Their interest payment is very low and with inflation the profit will be eaten away in 5 years
Look for a growth mutual fund. There are hundreds to choose from and the possible gain will be better. You can deal directly with the company with no commissions.
Source(s): Stock trader for 46 years. - Anonymous1 decade ago
I would go with the bank CD. They tend to pay more interest.
- Anonymous1 decade ago
Why not look at longer-term CDs? Two, three or five years terms?
- Anonymous1 decade ago
i would keep my money because it is hard earned and wate till the up turn comes and it better to have your money that not to have it and do classes and gone a investment club way safer don't guess all the best