This blog contains some simple tips and advice from two regular guys. We're not accountants, financial advisors, or brokers, so follow, ignore, or discuss our ideas as you see fit.

Friday, March 13, 2009

CD rates lower than savings rate?

Posted By Paul

If you have been following Frugalize you've noticed that I watch CD rates and that I've set up some CD ladders as a savings vehicle (to read earlier CD ladder posts click here).

I was intrigued by the fact that at ING currently a 12-36 month CD earns an APY of 1.5%. Yes that's a pretty low number, but what really intrigues me is the fact that the current APY for a normal savings account is 1.65%.

I don't have a ton of experience but I've never seen CD rates go LOWER than a normal savings account.

My thought is that if you are expecting your savings account to drop even further, then locking in a CD at a lower rate might actually seem appealing.

I found an article on Get Rich Slowly that discusses this:

CD (Certificate of Deposit) Rates: Current CD Rates at Online Banks

One thing is for sure, these are very strange times.

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