CD Rates are Low, Stay On Top of CD Maturity Due Dates
If you have a certificate of deposit that is maturing soon, especially a long term CD, you're going to be in for a shock when you see how low CD rates are right now.In fact, you should start searching for the best CD rates right now and invest in shorter term CDs since rates are going higher in 2012.
Stay On Top of CD Maturity Due Dates Since CD Rates are Low: Most of the time when you invest in a certificates of deposit you don't think about the investment much, you know what the CD rate is and how long you're going to earn the rate (CD term). You don’t have to check your statement every month like you should when investing in stocks or mutual funds.
The only time CD investors have to make a decision is when a CD matures, that is if you're planning on investing in another CD. If you have a long term CD that is maturing you probably have been enjoying a CD interest rate of 5.00% or more. These days you're lucky to find long term CD rates ( 5 Year) at 2.50%. In fact, the best CD rates on 5 year CDs are around 2.50%. That being said you shouldn't let your bank or credit union roll your long term CD into another long term CD.
Some banks and credit unions have inverted CD rates, shorter term CD rates are higher than longer term CD rates. So you should invest in a short term CD and enjoy higher CD rates that are coming in 2012.
Automatic CD renewal is convenient when bank CD rates are going higher but not when interest rates are going low and going lower. CD rates are near record lows since the Federal Reserve has kept interest rates low. CD rates are also a good alternative to Treasuries since rates on CDs are higher than Treasury yields right now.
If you have a CD maturing there is a period of time, usually a week, when the bank or credit union will notify you about the CD maturing. During this time you have a chance to act and roll into a new short term CD or withdrawal your money. If you don't act the financial instituion will roll your money into a CD with the same term you currently have.
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