Better rates than a CD ?
On 2021-04-16 at 08:11:41 MDT, "AK" wrote:
Is there any relatively safe investment that makes a better rate than a CD?
I am getting .4 %.
Depending on the term, that's a very good rate. US Treasury yields aren't
competitive with that until you get to 3 years or more.
https://www.treasurydirect.gov/instit/instit.htm
I don't think that is even better than the inflation rate.
CPI has been 2.6% for the past 12 months.
https://www.bls.gov/opub/ted/2021/consumer-prices-increase-2-6-percent-for-the-12-months-ending-march-2021.htm
Most CDs and other low-risk investments have provided very low returns, often
at or below the inflation rate, since the 2008 financial crisis. It's called
"financial repression".
If you want a low-risk inflation hedge, the simplest and best is (IMHO) the I
Series Savings Bond, although it provides only partial protection from
inflation.
https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm
If you are willing to take on risk to get a higher yield, you might consider a
dividend stock mutual fund. For example, Vanguard's Equity Income Fund is
currently yielding 2.4%.
https://investor.vanguard.com/mutual-funds/profile/VEIPX
But be aware that the stock market has been *very* "exuberant" for the past
year, and many stock market analysts are nervous €” even more nervous than
usual.
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