A CD can put some distance between you and your funds. If you’re not careful, you could even spend half of your vacation fund by accident. It can be tempting to dip into your savings if it’s readily accessible. If you’ve earmarked some funds for an upcoming expense, like a down payment on a home, a vacation or a wedding, a CD can help you store the funds until you’re ready to use them. If you want to earn more interest than a traditional savings account offers and still keep your assets liquid, take a look at high-yield savings accounts. “ you can part with access to the funds for the term of the CD,” said Lawrence Sprung, CFP and author of “Financial Planning Made Personal.” Keep enough in savings so that you can cover against a rainy day. This doesn’t mean that you should empty your accounts though. When to consider opening a CD When rates are highĮarning interest is one of the main reasons to open a CD, which offers a fixed rate of return for a set period of time.
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