Question about CD's

**lovestolaugh** · 05-12-2008, 10:39 AM

Excuse my ignorance but finances have never been my strong suit!! I opened a CD for both of my kids last December at 4.7%. I was wondering, when they mature if I opt to renew the CD do I still get the 4.7% or do I get the going rate? Also, can you add more money to the account before you renew?
Thanks for the imput!!!

**C@rol** · 05-12-2008, 10:42 AM

I was wondering, when they mature if I opt to renew the CD do I still get the 4.7% or do I get the going rate?

I believe you will get the new rate set at the time of
your renewing your CD.

Also, can you add more money to the account before you renew?

No I don't think you can add more money to the CD once
it has been purchased.

Great rate!

**Frugal Nurse** · 05-12-2008, 11:21 AM

that's what I wanted to say.

There are advantages and disadvantages to this.
You don't know where the rates will be in a year, or two or three etc.

So, say you choose a 5 yr CD at an excellent rate (at the time) of say... 4%. Three years into the CD term, interest rates increase to 5%... you are now earning lower than what you could have earned. Darn it.

In your favor, you have a 5 yr CD that earns 5.75% and 3 years into the term, the rates crumble and are now paying 4%... you are earning more. Dang!

But that's a risk you take in a long term CD like that.

You'll notice that short term CDs like 6-12 months are pretty much in line with the current rate- and are less risky.

Either way... it's better to have the money to invest in a CD.
I've earn an unbelievable amount in interest in the last 2 years... I think my tax returns indicated about $2500 in interest alone.

So.. keep investing.
Every little bit helps

**Frugal Nurse** · 05-12-2008, 11:25 AM

oops.... I noticed you have a cc debt of 44K. are you paying interest on that?

**lovestolaugh** · 05-12-2008, 11:37 AM

Let me clarify. The CD's are my kids money that they have earned and been given as gifts. Not mine. All my money goes to paying down debt. Which we are doing as fast as we can. We have already paid down $11,000 since January 1, 2008!!!!!!!

With any luck we should have all of our debt paid off by November 2009!!!!!

**Nishu** · 05-12-2008, 11:55 AM

This is probably old news to you, but if you compare those rates to current inflation, you're barely earning 1-2% for those CD's. That's probably not relevant to your question, just sharin'.

http://www.forecasts.org/inflation.htm

**McD** · 05-12-2008, 01:37 PM

You will get the going rate on c.d.s once they mature and yes, most banks allow you to add money on when you renew.

**Frugal Nurse** · 05-12-2008, 07:17 PM

Originally Posted by lovestolaugh

Let me clarify. The CD's are my kids money that they have earned and been given as gifts. Not mine. All my money goes to paying down debt. Which we are doing as fast as we can. We have already paid down $11,000 since January 1, 2008!!!!!!!

With any luck we should have all of our debt paid off by November 2009!!!!!

oh boy! I was HOPING that was what you were going to say!

Good for you!!!!! What an exciting thing for the children to see their money earning interest. I dunno..... Is it just me? but I find that kind of fun!

Just an FYI.. You don't need 'luck'. You only need determination and the mindset that you WILL get your debt paid off in Novermber 2009

just an aside: A few years ago, my Reiki master told me about the power of the mind. (yeah yeah... just a guru)

She told me to think about what I wanted. Really wanted. Write it down on a piece of paper. In positive, current words. Keep that piece of paper and read it.. 5, 10, 20 times a day.

What do you think I wanted? Money of course. Wait... I have money! I just can't seem to keep it and put it my savings account.

"I have $50,000 in my savings account in July 2005."
It was January. This was a far stretch of the imagination for sure. I just made up a number. I didn't know- it was an experiment. what the heck.

I didn't know how I was going to get that- I only knew I wanted it.
I said it.. many times during the day.
After the first day... I didn't need the slip of paper.
I automatically said it.
After about a week... I actually thought I had $50,000 in my savings account. I pictured it there. I acted as though I have $50,000 in my savings account. it was sooooo weird!

Then strange things started happening. I suddenly had a few thousand extra dollars in my checking account that I could transfer to my savings. huh! I was running on the edge for years.

Then more things started happening. A 10-year-old $20,000 settlement that I assumed was written off long ago as a loss appeared in my mailbox- without explanation.
Coincidence? maybe.

We normally have to pay about $5,000 or so in income taxes above the $40,000 or so we already pay- so imagine my surprise when when the accountant announced a $6000 refund.

These weird occurances continued- until it was July of 2005 and I had over $50,000 in my savings account.

I will you ~ to accept this experiment.

I will be debt-free in November 2009
I will be debt-free in November 2009
I will be debt-free in November 2009
I will be debt-free in November 2009
I will be debt-free in November 2009
I will be debt-free in November 2009
I will be debt-free in November 2009

Believe it and it will be