I'm Opening My Very First CD After Age 40. Here's Why

Motley Fool11-17

KEY POINTSCDs are low-risk, fixed-rate investments that often offer better rates than regular savings accounts.CDs make for a well-rounded, balanced portfolio.I am not a young buck, that's for sure. ...

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Here's Why\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-17 21:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/money/banks/articles/im-opening-my-very-first-cd-after-age-40-heres-why/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>KEY POINTSCDs are low-risk, fixed-rate investments that often offer better rates than regular savings accounts.CDs make for a well-rounded, balanced portfolio.I am not a young buck, that's for sure. ...</p>\n\n<a href=\"https://www.fool.com/money/banks/articles/im-opening-my-very-first-cd-after-age-40-heres-why/\">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":"IE00B19Z3B42.SGD","symbol_name":"Legg Mason ClearBridge - Value A Acc SGD","start_time":0,"source_url":"https://www.fool.com/money/banks/articles/im-opening-my-very-first-cd-after-age-40-heres-why/","article_id":"2484363916","we_media_id":null,"thumbnails":["https://g.foolcdn.com/image/?url=https%3A%2F%2Fm.foolcdn.com%2Fmedia%2Faffiliates%2Fimages%2FMature_man_with_tablet_and_laptop_appearing_w.width-1200_KoUAvGq.jpg&op=resize&w=165&h=104"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2484363916","pubTimestamp":1731850200,"sourceInfo":{"source_id":"fool_stock","name":"Motley Fool"},"weMediaInfo":null,"summary":"Yes, I am opening a certificate of deposit (CD) a bit later in life. 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And yet, even so, I recently opened my very first CD. You might be wondering, \"Why would someone over 40, in their prime earning years, open a CD instead of putting money into higher-yield investments?\" It's a good question, and I have some good answers.For me, it really comes down to financial security, interest rates, and the balance a CD brings to my portfolio. Let me explain why it makes sense for me, and why it might for you too.CDs offer stability and predictabilityWhen I recently went over my current portfolio with my financial advisor, we saw that most of my investments were tied to the stock market. And while they have been good to me, and still have growth potential, growth potential equals risk. And financial risk is something that interests me less and less as I have gotten older.CDs, on the other hand, are nearly risk free. They are FDIC insured, and offer a predictable, stable return over a set period of time, usually three months to five years (these days, shorter-term CD interest rates hover around 4.5%).Our Picks for the Best High-Yield Savings Accounts of 2024American Express® High Yield SavingsAPY4.00%                        Rate info                Circle with letter I in it.      4.00% annual percentage yield as of November 17, 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 17, 2024      Min. to earn$0Capital 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$0CIT Platinum SavingsAPY4.55% APY for balances of $5,000 or more                        Rate info                Circle with letter I in it.      4.55% 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.                                              APY4.55% APY for balances of $5,000 or more                        Rate info                Circle with letter I in it.      4.55% APY for balances of $5,000 or more; otherwise, 0.25% APY      Min. to earn$100 to open account, $5,000 for max APYGiven that, having a portion of my money in a low-risk vehicle like a CD feels like a smart move. Indeed, for risk-averse folks like my wife and I, CDs are actually pretty appealing.Interested in CDs? Click here for the best CD rates available today.CDs are a good place to park extra cashIt is always a good idea to have an emergency fund. In my case, my emergency fund consists of six months' worth of living expenses. My wife and I keep that money in a regular savings account, earning regular (read: little) interest. Because CDs require that you lock up money for a set period of time, they are not a good place for emergency funds.But what they are good for is as a place to keep cash beyond your regular savings amount and emergency fund because you will earn more interest on your money there. The interest rate you earn on a CD is fixed for the term, meaning it won't fluctuate the way a savings account APY does. That was another selling point for us.A CD rounds out my portfolioI was more aggressive with my investment portfolio when I was younger, but not now. At this stage, my main goal is to build a well-rounded, balanced portfolio, and that means both growth and security. While I love my IRA, CDs give me more security as they are not tied to the market. Fixed terms and interest rates higher than traditional savings accounts mean I am still growing that money, albeit more slowly, but also with less worry.A tax-advantaged retirement account is a great way to grow your money for your golden years -- check out our picks for the best IRAs.So yes, we have some very good reasons for opening a CD after the age of 40. While it might not seem like the obvious choice, if you are looking for balance, financial security, and predictability, opening a CD just may make sense for you, too.","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":"4.29.2","shortVersion":"4.29.2","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/2484363916"}