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URL:  http://boards.fool.com/okay-on-to-a-newbie-question-it-looks-to-me-like-25898289.aspx

Subject:  Re: CD question Date:  9/13/2007  4:39 PM
Author:  Lokicious Number:  21624 of 35400

Okay on to a newbie question. It looks to me like relatively short term (6 month) CD's offer about as good returns as any of the "safe" investments. Looking at bankrate.com I see a bunch of different institutions offering these with various "safe and sound star ratings" ranging from "weak" to "superior". And of course, I've never heard of many of the institutions that have 1-3 star ratings. So, do y'all have a rule of thumb about which ratings you'd avoid? I'm a little confused because these should all be covered by FDIC insurance, so if the bank defaulted I'd (eventually) be made good, right? For now, I'm leaning toward going with banks I've at least heard of, figuring squeezing out an extra 0.5% of yield isn't worth much of an increase in risk at all. does that sound reasonable?

Basically if the CD is FDIC insured, you don't need to worry. We were speciically discussing Contrywide, which could be arguend to be a possible bankruptcy, and even with that you would probably be okay. I think the ratings may come into play for people who are contempolating going over the FDIC limit to get a good rate. Or maybe it just gives bankrate.com something to do instead of twiddling thumbs.
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