Having an emergency fund of savings and investment in CDs should certainly alleviate any problems with short term unexpected cash needs. With an emergency fund in an account that does not penalize early withdrawal would certainly make it highly unlikely you would need to cash out a long term CD for unexpected short-term money requirements. However, short-term financial problems aren’t the only reason to withdraw early from an investment in a CD. Suppose you purchased a five-year CD three years ago when interest rates were very low; is it worthwhile to take the early withdrawal penalty and use the proceeds to buy a new CD at today’s much-better rates? That will take some analysis on your part, but it’s definitely worth the time.

No user commented in " I have an emergency fund so I don’t need to worry about early withdrawal penalties on my certificates of deposit, do I? "

Follow-up comment rss or Leave a Trackback

Leave A Reply

 Username (*required)

 Email Address (*private)

 Website (*optional)