Certificate of deposit, worth it?

[snoozebutton]

My wife and I came into a small windfall and after paying off the credit card and a few other small bills, we'll have around $5000 left over. With the way the economy is, we decided to put it away for a rainy day (I wanted to spend it on the boat and tools but she won out.)

Anyhoo, would a CD be our best bet? We'd have to go with a 3 month since we could hold off the bill collectors for that long if worse came to worse. And what kind of rate can we expect on a 3 month vs a 6 month?

[Nutty Fisherman]

I think that would be the best, at least you won't lose anything. The intrest rates aren't high, and if you would call or go to your bank they can tell you the best way to go as far as 3 to 6 months.

[18 inch Crappie]

Check around as CD rates can very by 2% for the same time note. TCF and Wells Fargo have specials on short tearm rates that will make you around 4%

[shizzy]

if the thought of needing it is coming in to play I would reconsider. I would only put money in to a CD if you know for sure you wont be needing it. do you have at least that much in savings?

[Wildabeast]

Open an account with ING Direct. It's FDIC insured up to $250K, you money is always available, and the interest rates are very similar. It's a great place to park cash.

[Phred52]

Snoozebutton, If you belong to a credit union at work or otherwise have access to one, check into the programs they might have. Sometimes they have rates that the local banks can't /won't touch. With the amount you have to deal with, I'd advise to start what ever number you can at the minimum deposit so if you need to cash in 1 for debts, you have the others still at the origional interest rate and you don't get penalized as heavily. If interest rates rise, when they come due, renew. If interest falls, shop around and put it where you can get the best return. As for what kind of rates you can expect... right now, you need to be ready to it lock in. The way interest rates and the markets are today, you've gotta go with the best deal. Some times you can get a really good interest rate on a short term note (3 mo.) just as an incentive to get you to join the credit union. Hope that helps ya. Phred52

[caseymcq]

Open an account with ING Direct. It's FDIC insured up to $250K, you money is always available, and the interest rates are very similar. It's a great place to park cash.

This is some good advice it you think you may need/want to access any of that money at any given time. Right now ING has savings rates of 2.75% while the best CD they offer is 3.50% on 12 and 18 month CD's. That .75% difference would amount to $37.50 on the year so you could decide if that was worth more to you than the accessibility.

[snoozebutton]

Thanks for the responses and what I was describing was a worse case scenario.

There is a credit union I can join through work so that's going to be something I'm going to check in on, that and the IMG Direct.

Thanks again!!!