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Home > Cashed in my c.d.'s

Cashed in my c.d.'s

February 24th, 2010 at 10:32 pm

I cashed in my certificates of deposit yesterday. My bank failed, was taken over by another bank and reset my c.d. rates from 4% and 2.75% to 1%
I was able to get almost 2% at another bank, so I was able to redeemed the c.d.'s without any penalty.
That has cut my interest income in half. I was hoping that someday I could live on the interest, but not with these rates.
My electric bil came and was much lower than my budget , so I am adding what was left in that envelope to the challenge money.
Prev. total $3096.00
today 100.00
new total $3196.00

4 Responses to “Cashed in my c.d.'s”

  1. mulyanto Says:
    1267053581

    Bummer. 4% was a nice rate, but they must've been long term CDs. I'm not ready for a 5yr+ commitment yet, especially not at these low rates. I have a couple of short term CDs at a "too big to fail" bank for 0.5% right now, not that I care if my bank fails and my rate resets.

  2. patientsaver Says:
    1267106291

    I'm glad you got your money out of that bank, but i would also worry that CD rates these days generally won't even match the rate of inflation.

    For instance, the most recent data available shows that inflation in January 2010 was 2.6%. So you're actually losing money in that CD.

    If you could invest a portion of your assets in a stock mutual fund, you might do a little better. For instance, my T. Rowe Price Equity Index 500 fund, which mirrors the S&P 500, returned 32.92% in the last 12 months ending January 31, 2010.

  3. Ima saver Says:
    1267111766

    I do have quite a bit invested in Vanguard Index 500 fund. Mine returned over 30% too, but dropped a whole lot the year before. All in all the mutual funds have not advanced a lot in the past 10 years!

  4. Ken Says:
    1267225315

    Ouch. That was a big rate cut. Did the bank that assumed the deposits of the failed bank notify you quickly about the new rates?

    I've seen a few cases when the bank that takes over the failed bank's deposits is slow to notify customers of the rate change, and unfortunately, the FDIC allows the assuming bank to change the rate on the day after the bank failure.

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