CD Rates Gain Respect

Bank accounts, whether checking, savings, certificates of deposit or money market accounts are one of the most stable, dependable sources of asset preservation that’s available.  The possible risk of loss of principal that is saved in a banking account insured by the Federal Deposit Insurance Corporation is almost zero.  For most investors, the yields on certificates of deposit were the Rodney Daingerfield’s of asset classes, they had no respect.  There was hardly a need to consider these products when managed futures accounts and hedge fund accounts were yielding returns in the double digits.  Little incentive existed to lock up money in a bank vault at what appeared to be meager levels when higher yields seemed available elsewhere.  Even when CD rates first starting to climb investors shunned these investment choices in favor of the nonsense being manufactured at the facilities on Wall Street.

Well, not only are the yields on the best one-year CD rates outpacing the return of a 10-year Treasury bonds, but capital preservation sure seems to hold a lot more value now.  In hindsight, holding funds in FDIC insured bank money market accounts and CD accounts was always a wise strategy.  Short-term funds held in CDs with maturities of less than one year have no volatility or risk to principal.  Short-term CDs offer investors a high rate of return that keeps pace with inflation, and affords the flexibility to take advantage of rising rates.

The highest CD rates may eventually return to a more sedate level over comparable interest bearing accounts but now the advantage is squarely in the bank vault.  The pursuit for low risk, secure CD rates has never been more convenient.  By analyzing these pages and doing a little research investors don’t have to be satiated with low returns found in most cash equivalent investment products.  The best one year CD rates in most states as well as those being offered nationally are exceeding 4.00%.  Bank CD rates and money market accounts are certainly an exceptionally solid investment choice for the immediate future.

This entry was posted on Saturday, November 1st, 2008 at 4:18 pm and is filed under Money Rates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.