What are the point of short term cds? Or any CD for that matter.?

The interest rates are low and you can find banks with competing interest rates just in a savings account. So why use a CD. For example, an HSBC CD has a rate of 2.5% w/ minimum deposit of $1,000. Lets say you do a year. You basically only earn $23.00. Might as well just keep it in your savings right?

Im looking for ways to save my money but have it work for me as much as possible in a small amount of time. I live in Connecticut where home prices are just ridiculous. Too many rich people up here. I am trying to save for a home but I almost feel its hopeless. Unless I want to move to crime ridden Bridgeport and New Haven, it seems I may be out of luck. Any ideas or tips would be appreciated. I am single, $59000 salary, and only a few thousand in savings right now. Paying off a $3,000 credit card payment but no car payment.

What are the point of short term cds? Or any CD for that matter.?credit counseling

A CD typically pays higher interest than a savings account because you are exchanging liquidity (it%26#039;s locked up for a period of time) for a higher return (higher interest rate).

The basic premise in investing is that higher risk may earn higher rewards. Bank CDs are insured by the FDIC, so the risk of loss is low. Investing the same money in the stock market, which isn%26#039;t insured, may earn you more money for the same period of time as the CD but with more risk of losing your investment.

So, a CD is just a safe investment for a period of time.

What are the point of short term cds? Or any CD for that matter.?

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CDs were designed as a way to earn interest on money that had to be kept fairly liquid. The high-interest savings accounts are a fairly new concept - they didn%26#039;t exist a few years ago. If you can get a better rate in a savings account, go for it. Just make sure the bank offering the account is federally insured (most of the big banks are).

You should be focusing on these things:

1) Build an emergency savings account. If you don%26#039;t have one, then the next time an unexpected expense happens, there goes your house down-payment. This should be about 3-6 months of living expenses

2) Pay of your credit card debt, and avoid charging anything to your card that you can%26#039;t pay off in full within a month

3) Reduce your expenses so that you have more room to save. You may not like living frugally, but if you live frugally for a year or two, you%26#039;ll have your own house for the rest of your live. It%26#039;s two years of sacrifice for 30 years of comfort.