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First of all, thanks very much to Lokicious and everyone else who contributed to the amazing FAQ. It's clear y'all spent a lot of time and effort and I've found it really helpful.

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?

Thanks in advance for your replies.
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We had a recent discussion about defaults. Look back a few days. There are also numerous posts about PenFed and others that people like for CDs. I don't own CDs (just here for the group wisdom) so I can't really point you to any good places.

Hedge
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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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Basically if the CD is FDIC insured, you don't need to worry.

Excellent.

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.

Heh. Yeah, it's a little disconcerting to think about opening a CD with "First Transylvanian Bank of Omaha" or "First Generic Internet Bank". Was half expecting the the responses to start with "hey, dumb***"

Thanks for the replies!
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