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Subject:  Re: CDs vs. Bonds Date:  6/19/2000  4:07 PM
Author:  Crosenfield Number:  4235 of 20640

The question was what if you lose FDIC insurance because a CD becomes over $100000. Normally when you buy a CD, you have a choice between having the interest paid to you, probably quarterly, vs. having it added to the CD, and then getting everything, principal and compounded interest back when the CD matures.
My suggestion is that since now CDs, unusually, are paying very good rates, if the investor is worried about losing FDIC insurance on that portion of the CD which would exceed $100000, then take the interest in cash rather than having it added to the principal.
Usually, bonds pay better than CDs, but right now that isn't the case.
Best wishes, Chris
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