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CD investing blunders

By Sheyna Steiner ·
Thursday, June 3, 2010
Posted: 5 pm ET

I was reading an article on the FDIC website the other day. It's called "Certificates of Deposit: Tips for Savers."

Interestingly, according to the FDIC, many investors neglect to find out the exact maturity of their CD and are then unpleasantly surprised to find out that it's much longer than they had thought.

In the May 20 Interest Rate Roundup, I wrote about a Los Angeles Times article that detailed the struggle of one CD investor who accepted an offer to roll over his CD to a new 30-month CD at prevailing rates. He did not take the time to find out that the prevailing rate was an astonishing 0.65 percent.

Have you ever blundered in your CD investing and neglected to note the maturity or annual yield? What did you do?

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Sheyna Steiner
June 04, 2010 at 11:32 am

For 30-months anyone can do a lot better, at least twice that, which is still no great shakes but still...0.65 percent for 30 months is scraping the bottom of the barrel. The Bankrate national average has the average one-year CD yielding 0.70 percent. Who would invest their money for two and half years at a lower rate than they get for a shorter maturity?

June 04, 2010 at 11:21 am

Unfortunately, a 0.65 pct CD rate isn't all that bad.. sad state of affairs but true nonetheless

June 04, 2010 at 11:21 am

right now, 0.65 rate doesn't sound all that bad -- which is sad, but still true!