Bookmark this page
The rate of inflation is outpacing the highest five-year CD rates. That means that savers are now losing purchasing power if they invest in CDs. At least, one might think, CDs get some rate of return, which makes them only slightly preferable to keeping your savings under the mattress.
Consider: The April reading of the Consumer Price Index reflected an inflation rate of 3.2 percent.
Yet, the highest-yielding five-year CD on Bankrate's CD rate table is from Everbank with a yield of 2.58 percent.
Clearly, this is a bad deal for savers. Even though the Fed predicts this spike in inflation is transient and will recede once gas prices go down, savers are still barely eking by on what they can get from CDs.
Safety is obviously the paramount concern when it comes to investing in CDs at these low yields. But I'm curious, is there a point at which you would say no to CDs, despite their safety and FDIC-insured status?
Get more CD and Investing News with our free weekly newsletter.
Follow me on Twitter.
