Thanks Charlie. I agree with pretty much everything you said. I am still 20-30 years from retirement (depending on how the market performs!) and have never bought a CD. I'm in the market for a CD now because I have some $$$ that I need to send to Uncle Sam on April 15th. I don't think the IRS will take an IOU and a picture of Ben Bernanke if I lost it on the stock market between January and April :-)I was just amazed at the difference between the money market rates and the 5-year CD rate even with the penalty, and that led me to question the whole "CD Ladder" thing. Having said that, if I were in my 60s I would still want some kind of safe-as-safe-gets cash beyond my emergency fund - perhaps a year's living expenses - in something like a CD. While you are absolutely correct that you lose purchasing power on it year-on-year due to inflation, it protects that cash from a major bear market and gives time for beaten-down investments to recover. If I wanted to keep cash for cash's sake, I would probably look at TIPS to protect from inflation. In the recent downturn I've seen some of my older family members - responsible, intelligent, fiscally-aware people - have to take drastic steps because their stocks were so beaten down and they didn't have enough stashed away in fixed investments. I believe cash and cash-equivalents have some place in a portfolio, depending on your age and outlook...Thanks,Ilikebeer
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