Understanding Certificates of Deposit: Exploring the Pros and Cons of CD Investments

Last Paycheck

Archie and Rob discuss the topic of certificates of deposit (CDs). A CD is a financial instrument offered by banks where you deposit money for a certain period of time and earn interest in return. They break down the mechanics of CDs, including how they used to be represented by physical certificates but now mostly appear as line items in online banking statements. They also highlight the importance of FDIC insurance, which protects bank deposits, including CDs, up to $250,000 per person.

Archie and Rob delve into the advantages and potential risks of investing in CDs. They emphasize that while CDs can be beneficial for short-term financial goals and offer competitive interest rates in certain market conditions, they may not be the best long-term investment strategy due to potential inflation risk and limited earning potential compared to other investment options. They also discuss the importance of aligning investment time horizons with financial goals and the need to consider the ever-changing market environment when making investment decisions.

This episode on YouTube: https://youtu.be/Urd_COmgDN0

Listen in on conversations with Certified Financial Planners Archie and Rob Hoxton as they share weekly wisdom to help you retire and stay retired. Have you ever wondered what it will feel like when you get your last paycheck? Whether it’s excitement, anxiety, or anything in between, this show is for you.

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