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Fiscal Cliff and CD Rates on Short Term Certificates of Deposit
 

Fiscal Cliff and CD Rates on Short Term Certificates of Deposit

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As the debate and campanging ranges on for the direction Congress and the President chooses to deal with the fiscal cliff now is a good time to lighten up on your equity holdings and place the sale process in a certificate of deposit. Since CD rates are so low these days your return will be low but at least your principal will be safe as long as you keep any CD accounts below the $250,000 FDIC insured amount.

As we head into the month of December it appears we are no where near a resolution on tax cuts and spending cuts. Washington probably won't come to an agreement until sometime in January, after we fall off the fiscal cliff or hill if you will. Warren Buffett said this morning on CNBC that he feels Washington will come to an agreement eventually but he doesn't think it will happen this year, read more on CNBC Buffett Expects 'Fiscal Cliff' Fix, But Not By December 31.

Even if there is an agreement in 2012 some damage to the economy has already been done as companies pared back on investing and hiring starting in the third quarter of 2012. This will dampen company earnings in the current quarter and in turn send stock prices lower.  Once an agreement has been made stocks will rally again since many economists and investors believe the economy will take off.

Until we reach that point now is a good time to sell stock and place those sale process into short term certificates of deposit. I have compiled a list of the best CD rates on 1 month and 3 month certificates of deposit.

Short Term Certificate of Deposit Rates


Best 1 Month CD Rates 

  • Virtual Bank Rates 0.25%

  • E-Loan Rates 0.15%

  • Alostar Bank of Commerce 0.10%

  • Citizens Trust Bank 0.05%

  • Lone Star Bank 0.05%


Best 3 Month CD Rates

  • E-Loan Rates 0.65%

  • EverBank Rates 0.57%

  • Virtual Bank Rates 0.50%

  • AloStar Bank of Commerce Rates 0.45%

  • OneWest Bank Rates 0.45%

  • Barclays Bank Rates 0.40%

  • Discover Bank Rates 0.40%

  • Ally Bank Rates 0.39%


These bank CD rates might be shocking too you if you haven't search for rates recently. If you're willing to go out longer term on a certificate of deposit investment you can find 12 month CD rates at banks higher than 1.00 percent. Granted you won't get rich or even keep up with the pace of inflation investing only in certificates of deposit but during these uncertain economic times it is better to hold onto your principal and earning a low rate!

Author: Stacy Everest
November 28th, 2012