Great CD rate being offered by USAlliance FCU

[Debinnov a]

So would this just be for someone who is looking for income perhaps? Is there any reason other than getting the income to doing this? I just assumed compounding made more sense, but I'm still learning.

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[thefinancebuff]

So would this just be for someone who is looking for income perhaps? Is there any reason other than getting the income to doing this? I just assumed compounding made more sense, but I'm still learning.

Leave it compounding at 3% when you don't need the money and when 3% is better than rates elsewhere. If rates elsewhere go up to 5%, you can have the interest paid out and you invest elsewhere.

 

[Done]

So would this just be for someone who is looking for income perhaps? Is there any reason other than getting the income to doing this? I just assumed compounding made more sense, but I'm still learning.

This is a way of accessing the interest without incurring an early withdrawal penalty. If you don't need the income, you can let it compound until the CD matures.

 

[pb4uski]

So would this just be for someone who is looking for income perhaps? Is there any reason other than getting the income to doing this? I just assumed compounding made more sense, but I'm still learning.

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Not necessarily. I have some 3% 5 year CDs in my IRA. I view them as a bond substitute. No credit risk since they are FDIC insured. A good return considering the term and rates available at the time. An no interest rate risk.