Investments – CDs

If anyone is interested in investing with CDs, but you don’t have an investment account, or the amount you can put into a CD is less than $1000 or $500 like many investment funds require, CapitolOne360 offers a nice option.

If you setup a checking account with them, you can open as many small CDs as you want, I have several small CDs of $10-25. As of this writing these CDs only earn .40% for short term (6-18 months), goes to 1% at 24/30 months, 1.6% for 36 months, 1.76% for 48 months, and 2.1% for 60 months.

However, if you let the dividends roll over on maturity, you will be compounding the interest. If you calculate that out, then it turns out the measly .4% combined with the 6 month dividends yields more than the longer term CDs, so I have my money in 6 month CDs staggered  2-4 weeks apart base on being able to buy them on payday.

The other advantage is that the money become available again during the maturity time frame, so every so many weeks I get a CD that is maturing, and if I need a little money that week, I can just tell the CD not to roll over, but to pay out completely.

So, if you want to make a little money, and beat the inflation rate over the longer term, 5-35 years, and you only have small amounts to invest, then look into 6 month CDs at CapitolOne360.

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