The Fed Rate Cut, CD Rates, and CD Laddering
December 17, 2008
By Kevin Cafferty
Blog commenter Dan asked in my last post how the recent massive interest rate cut is going to affect CD rates.
There are a couple of factors at work here: banks need deposits more than ever and in order to do so need to offer consumers great cd rates, while the rate cut is limiting their ability to give those great rates.
At the risk of blowing my own horn a bit, services like MoneyAisle are more important than ever in light of this rate cut - the banks in the MoneyAisle network realize that the key to attracting new customers and deposits is to offer attractive rates on CDs.
If you plan on heading to the nearest bank to open a CD, chances are the rate you get won't be all that fantastic - but if you use an online service like MoneyAisle for CD rates you can continue to count on CDs as a safe, FDIC-insured place to get a return on your investment.
Another way to guard against falling rates is to build a CD ladder - which is one of the reason we recently introduced our new CD Laddering feature. You'll be able to run multiple auctions simultaneously and build a ladder almost instantly. While CD test-drives are available to anyone who comes to the MoneyAisle web site, to try CD Laddering, you have to be a registered MoneyAisle user. Don't worry, we don't spam and we don't share your information, and MoneyAisle is completely free to use.
Comments
On
Monday, December 22, 2008
dan
wrote:
Thanks much for turning my inquiry into a blog post!! So far I haven't noticed any major hit on CD's after the FED's decision, although Im not particularly sure how long the adjustments may take (if at all).
PS. I believe CD laddering is a superb way to stay financially flexible in these times!
Add a Comment