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5 Yr CD Rates @8.5%
Old 01-23-2008, 07:17 PM   #1
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5 Yr CD Rates @8.5%

A Co-worker showed me this today. 5 Yr CD ($100K min) at 8.5% at Millenium Bank - link below. What is the catch? My friend is coming into $400K - is afraid of the market because of past disasters - and is contemplating dumping all in Millenium.

Premium CD : Certified Deposit : Millennium Bank
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Old 01-23-2008, 07:21 PM   #2
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Offshore bank, not FDIC guaranteed.
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Old 01-23-2008, 07:29 PM   #3
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Boy, if we could get those kind of rates here, my stock allocation would be zero.
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Old 01-23-2008, 08:03 PM   #4
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Run!
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Old 01-23-2008, 08:15 PM   #5
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Do a search on this forum. We've talked about this "bank" before.

It's not FDIC insured and it's in a foreign country. Good luck with that.
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Old 01-23-2008, 08:55 PM   #6
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Hey, its a 100% gain for whoever ends up grabbing your money!

You can get about 8.5% right now with vanguards high yield bond fund. Much better chance of your principal remaining intact as well...
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Old 01-23-2008, 11:52 PM   #7
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i dont understand the tax rams. of a taxable bond fund in say a roth or SIMPLE IRA. Can someone elaborate on this...esp if held in a SIMPLE IRA which is tax deductible
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Old 01-24-2008, 02:15 PM   #8
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When I was visiting Jamaica, I heard of this company called Cash Plus that offered 10%+ interest, but (of course) it turned out to be a pyramid scheme. Since November, they haven't been able to pay investors. Most of the people there are poor to start with, and now they have nothing.
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Old 01-24-2008, 02:17 PM   #9
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Quote:
Originally Posted by thefed View Post
i dont understand the tax rams. of a taxable bond fund in say a roth or SIMPLE IRA. Can someone elaborate on this...esp if held in a SIMPLE IRA which is tax deductible
Inside an IRA of any flavor, you pay no taxes on the bond interest until you make a withdrawal from the IRA. With a Roth, you don't pay taxes then, either. Its a great place to put tax inefficient investments.
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Old 01-25-2008, 10:10 PM   #10
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Inside an IRA of any flavor, you pay no taxes on the bond interest until you make a withdrawal from the IRA. With a Roth, you don't pay taxes then, either. Its a great place to put tax inefficient investments.
Thanks brewer
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