# need to ask question on rates for CD's- General Budget & Finance

1. ## need to ask question on rates for CD's

I am looking at rates to invest in CD's

if a CD is for 9 months and the rate they quote is 4.71% Annual Percentage yield....

you would one figure the interest earned by

dividing12 month into 4.71%
then multiplying that amount by 9 months to get the actual interest

so 4.71% divided by 12 = 0.39%
0.39% multiplied by 9 = 3.51%

so the interest earned on \$500 (minimum deposit) would only be \$17.55 for the entire 9 months ??

am I looking at this right
It is better to do several small CD (low amounts) or larger ones (1-2K)

can someone help me here

this time of year they ALWAYS -- banks offer CD when they know people are purchasing gifts -- and not investments.

Trying to make intelligent choices.

suggestions
(oh put it in the freezer -- OK ---thanks ! )
ha

2. When the banks quote you a rate like 4.71% that is an annual rate of return even if it is only 3 months 6 months or 5 years. So...you divide the annual rate by the months that you are invested. The rates are not quoted for the time they are left in because that can vary from 1 investor to another. Hope this is helpful. Susan

3. For me to do CD investing-it is better to do "laddering" -this way they come due at different times-months or years. This way if you need money you have a CD coming due soon. Example: If you have \$15,000.00 for CD investing-Put \$5,000 on a Cd coming due in 6 months, put the second \$5,000 CD to come due in 1 year, put the 3rd CD of \$5,000 to come due in 2 years.
We are doing I bonds and saving bonds for small investiments each month for my 8 yo son.
At our Credit Union we have started a Kirby Kangroo Savings account for him. They give him a booklet that holds \$5 of quarters. When he gets it full he takes it in and it is deposited into the account. They are doing this with 2 of the local grade schools.They are teaching and forming HABITS. He is so proud of this account. He goes in and knows what desk to register and to deposit his money.Ane I'm right proud my self!LOL