Do you think it is okay to put less than $100K in a 1 year CD at a bank that is not in the best of conditions?
by Mortgage Rates on Tuesday, October 19th, 2010 | 5 Comments
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it’s not good to put your money with any bank right now. they are all trying to get people’s money to make it look like they are more stable.and fdic protection only goes so far you might want to read up on it before you decide
CDs are covered by FDIC insurance. You should be fine. Most banks are suffering right now, I think WaMu will be fine in the long run. Any doubt, ask them directly. Tell then of your concerns and get their response.
Your money will never increase at that rate, which is just a bit above inflation. That amount of cash should be in some strong mutual funds where there is a decent rate of return. Especially look at NO LOAD funds
Consumers are protected for up to $100K, and depending on beneficiaries, etc, can sometimes be covered for more than that.
I’ve provided the link to the FDIC site that will take you to the information there.
At the end of the day, you should place your money where you feel comfortable, but know that FDIC does provide you coverage up to $100K on CDs (and potentially more). Use the calculator on that site to see what FDIC may insure you for.
Additionally, know that most bank reps are very knowledgeable about FDIC coverage and can answer any questions you may have about this.
I researched your CD. You must be mistaken. WAMU is only offering 5% on their 5 year CD’s.
They are offering 5% on 4 year Cd’s if you have over $100,000.
One year Cd’s are paying 1.5%.
Do not invest in anything you do not understand. Some local banks are getting you into CD’s and deceiving you by telling you you can cash it out in a year. They do not clearly tell you that you can lose 6 months interest if you sell the CD early.
Also, some 1 year Cd’s automatically re-invest. This is a new way banks are making money. You must send a letter in writing stating that you do not want to re-invest no earlier than 30 days before the date of re-investment. Some banks make it 10 days. If they do not get that letter the CD goes on for another year. And guess what, you will lose 6 to 9 months worth of interest to sell.
Buyer beware. As to conditions. Banks go under all the time, but another bank always buys them. CD’s are super safe.