Are CDs Really a Good Investment? Here's the Truth

Motley Fool11-12 20:15

KEY POINTSA CD gives you the benefit of a guaranteed return on your money.An early CD withdrawal can include costly penalties.In the long run, you could lose out big time by sticking with CDs.Since CD...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2482870480?lang=en_US&edition=fundamental","thumbnail":"https://g.foolcdn.com/image/?url=https%3A%2F%2Fm.foolcdn.com%2Fmedia%2Faffiliates%2Fimages%2F34_PvC8DWT.width-1200.png&op=resize&w=165&h=104","is_english":true,"pubTime":"2024-11-12 20:15","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2482870480","market":"fut","top_or_hot":-1,"title":"Are CDs Really a Good Investment? Here's the Truth","media":"Motley Fool","content":"<div>\n<p>KEY POINTSA CD gives you the benefit of a guaranteed return on your money.An early CD withdrawal can include costly penalties.In the long run, you could lose out big time by sticking with CDs.Since CD...</p>\n\n<a href=\"https://www.fool.com/money/banks/articles/are-cds-really-a-good-investment-heres-the-truth/\">Source Link</a>\n\n</div>\n","source":"fool_stock","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Are CDs Really a Good Investment? Here's the Truth</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAre CDs Really a Good Investment? Here's the Truth\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-12 20:15 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/money/banks/articles/are-cds-really-a-good-investment-heres-the-truth/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>KEY POINTSA CD gives you the benefit of a guaranteed return on your money.An early CD withdrawal can include costly penalties.In the long run, you could lose out big time by sticking with CDs.Since CD...</p>\n\n<a href=\"https://www.fool.com/money/banks/articles/are-cds-really-a-good-investment-heres-the-truth/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU0130102774.USD","symbol_name":"Natixis Harris Associates US Equity RA USD","start_time":0,"source_url":"https://www.fool.com/money/banks/articles/are-cds-really-a-good-investment-heres-the-truth/","article_id":"2482870480","we_media_id":null,"thumbnails":["https://g.foolcdn.com/image/?url=https%3A%2F%2Fm.foolcdn.com%2Fmedia%2Faffiliates%2Fimages%2F34_PvC8DWT.width-1200.png&op=resize&w=165&h=104"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2482870480","pubTimestamp":1731413700,"sourceInfo":{"source_id":"fool_stock","name":"Motley Fool"},"weMediaInfo":null,"summary":"You can make money with CDs, but there are hidden risks you may not be aware of. Read on to learn more.","collect":0,"end_time":0,"defaultTopTitle":"fool.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0130102774.USD":"Natixis Harris Associates US Equity RA USD","LU0648000940.SGD":"Natixis Harris Associates Global Equity RA SGD","LU0477156797.USD":"HARRIS ASSOCIATES GLOBAL EQUITY \"RE\" (USD) ACC","LU0648001328.SGD":"Natixis Harris Associates US Equity RA SGD","IE0002270589.USD":"LEGG MASON CLEARBRIDGE VALUE \"A\" (USD) INC","BK4516":"特朗普概念","LU2552382215.SGD":"WELLINGTON US BRAND POWER \"A\" (SGDHDG) ACC","LU0130103400.USD":"Natixis Harris Associates Global Equity RA USD","LU1267930490.SGD":"TEMPLETON GLOBAL EQUITY INCOME \"AS\" (SGD) INC A","IE00BFSS8Q28.SGD":"Janus Henderson Balanced A Inc SGD-H","LU0211327993.USD":"TEMPLETON GLOBAL EQUITY INCOME \"A\" (USD) ACC","LU1201861165.SGD":"Natixis Harris Associates Global Equity PA SGD","LU2360107671.USD":"BGF FINTECH \"A4\" (USD) INC","LU2552382058.USD":"WELLINGTON US BRAND POWER \"A\" (USD) ACC","LU2552382132.HKD":"WELLINGTON US BRAND POWER \"A\" (HKD) ACC","LU1201861249.SGD":"Natixis Harris Associates US Equity PA SGD-H","IE00B7KXQ091.USD":"Janus Henderson Balanced A Inc USD","LU0211328371.USD":"TEMPLETON GLOBAL EQUITY INCOME \"A\" (MDIS) (USD)   INC","IE00B4JS1V06.HKD":"JANUS HENDERSON BALANCED \"A2\" (HKD) ACC","BK4585":"ETF&股票定投概念","LU0980610538.SGD":"Natixis Harris Associates US Equity RA SGD-H","BK4116":"互联网服务与基础架构","LU0211331839.USD":"FRANKLIN MUTUAL GLB DISCOVERY \"A\" (USD) ACC","BK4166":"消费信贷","IE00BFSS7M15.SGD":"Janus Henderson Balanced A Acc SGD-H","AXP":"美国运通","IE00BJJMRX11.SGD":"Janus Henderson Balanced A Acc SGD","LU0094547139.USD":"abrdn SICAV I - GLOBAL SUSTAINABLE EQUITY FUND \"A\" (USD) ACC","IE00B19Z3581.USD":"Legg Mason ClearBridge - Value A Acc USD","LU2106854487.HKD":"ALLIANZ THEMATICA \"AMG\" (HKD) INC","BK4559":"巴菲特持仓","LU0266013472.USD":"AXA WF - Framlington Longevity Economy A Cap USD","BK4588":"碎股","LU2023250504.SGD":"Allianz Thematica Cl AMg DIS H2-SGD","IE00BJJMRY28.SGD":"Janus Henderson Balanced A Inc SGD","IE00BSNM7G36.USD":"NEUBERGER BERMAN SYSTEMATIC GLOBAL SUSTAINABLE VALUE \"A\" (USD) ACC","LU1861217088.USD":"贝莱德金融科技A2","COF":"第一资本","IE0004445015.USD":"JANUS HENDERSON BALANCED \"A2\" (USD) ACC","IE0005OL40V9.USD":"JANUS HENDERSON BALANCED \"A6M\" (USD) INC","CD":"秦淮数据","LU0011850046.USD":"贝莱德全球长线股票 A2 USD"},"translate_title":"CD真的是一项好的投资吗？这是事实","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"COF":0.9,"CD":0.8,"US7Y.BOND":0.7,"US10Y.BOND":0.7,"US12M.BOND":0.7,"US2Y.BOND":0.7,"US30Y.BOND":0.7,"US3Y.BOND":0.7,"US5Y.BOND":0.7,"US6M.BOND":0.7,"AXP":0.6},"content_text":"KEY POINTSA CD gives you the benefit of a guaranteed return on your money.An early CD withdrawal can include costly penalties.In the long run, you could lose out big time by sticking with CDs.Since CD rates have been super high this year, a lot of people have opened CDs to take advantage. And even as CD rates start to fall, they can still be a good place to put your money under the right circumstances.Unlike a savings account, CDs guarantee you a certain return on your deposit. If you're trying to meet a specific goal, knowing exactly how much interest you stand to earn is helpful.But you should also know that CDs may not be as wonderful as you might think they are. In fact, in the long run, CDs are far from the best place to put your money.The problem with CDsCDs have two main problems you should know about. And one is a much larger issue than the other.Our Picks for the Best High-Yield Savings Accounts of 2024Capital One 360 Performance SavingsAPY4.00%                        Rate info                Circle with letter I in it.      See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Oct. 23, 2024. Rates are subject to change at any time before or after account opening.      Min. to earn$0Open Account for Capital One 360 Performance SavingsOn                          Capital One's             Secure Website.                                                  Member FDIC.                                              APY4.00%                        Rate info                Circle with letter I in it.      See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Oct. 23, 2024. Rates are subject to change at any time before or after account opening.      Min. to earn$0American Express® High Yield SavingsAPY4.00%                        Rate info                Circle with letter I in it.      4.00% annual percentage yield as of November 12, 2024      Min. to earn$0Open Account for American Express® High Yield SavingsOn                          American Express's             Secure Website.                                                  Member FDIC.                                              APY4.00%                        Rate info                Circle with letter I in it.      4.00% annual percentage yield as of November 12, 2024      Min. to earn$0CIT Platinum SavingsAPY4.70% APY for balances of $5,000 or more                        Rate info                Circle with letter I in it.      4.70% APY for balances of $5,000 or more; otherwise, 0.25% APY      Min. to earn$100 to open account, $5,000 for max APYOpen Account for CIT Platinum SavingsOn                          CIT's             Secure Website.                                                  Member FDIC.                                              APY4.70% APY for balances of $5,000 or more                        Rate info                Circle with letter I in it.      4.70% APY for balances of $5,000 or more; otherwise, 0.25% APY      Min. to earn$100 to open account, $5,000 for max APYFirst, if you withdraw your money from a CD before it matures, you'll generally be hit with a penalty from your bank. If you had your money in a savings account instead, you can withdraw money whenever you want.But the even bigger issue with CDs is that over time, the returns you get might pale in comparison to a stock portfolio. And that could spell the difference between meeting your long-term financial goals or falling short.Over the past 50 years, the S&P 500's average annual return has been 10%. That accounts for years when stock prices soared and years when the market did poorly.Meanwhile, the best CD rates we've seen in decades have been recent rates around 5%. But that's clearly nowhere close to 10% on your money. And those 5% rates are also far from the norm. So over time, choosing CDs could come back to bite you.Think about how much you stand to loseLet's run some numbers to show what sticking with CDs over the long run might do for your finances vs. investing in stocks. Imagine you have $10,000 to invest over the next 30 years.If you put it into a stock portfolio that gives you a 10% annual return, you'll end up with about $175,000.If you put it into a series of CDs that pay you 3% a year (which is a more realistic and even somewhat generous estimate), you'll end up with about $24,000.All told, putting money into CDs could cost you $150,000 over the long run. If you'd rather set yourself up with higher returns, click here to learn about the best brokerage accounts and start investing your money today.Of course, if you're only looking to park your cash on a short-term basis, then a CD is a better bet. To be successful as a stock market investor, you need to give yourself many years to ride out market fluctuations.If you have cash earmarked for a goal that's a year or two away, open a CD at an FDIC-insured bank so your deposit is protected from losses and you're able to earn more interest than what a savings account will pay. But for far-off goals, stock investing is a better bet. And if you stick to CDs, you may find that it stunts your financial growth in a very dangerous way.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2482870480"}