October 16, 2018 5:14 pm Update

I don’t know about you, but I am sure happy that certificate of deposits are producing higher yields these days. 💵

While 2.5 APY on a FDIC-insured 1 year CD isn’t going to make one rich, it’s a lot better then in years past. And 1-year CDs are good because they only tie up your money for a year — and lack the short-term risk of index funds and other market investments. At 2.5 APY, if you park $50k for one year, you earn $1,265 in a year guaranteed by the federal government. 🤔

The yield curve is dropping, and it’s increasingly risky to have too much market exposure for paper you can’t sit on for a decade. 📉 Sure, you’ll still losing money on certificate of deposits from inflation, but it’s not as bad as only a few years ago. While I am continuing to practice cost-averaging through my normal weekly investments, I am not going to throw wads of extra money into the market.