The more liquidity there is in an investment, generally the less return you'll have. (I'm talking about safe/conservative investments here.) For example, CDs pay more than savings accounts, and in turn you have to pay penalties if you withdraw your money before the term is up.
Is there a "next step up" in that kind of thing? Ie. an investment where you *really commit* your money for a specified term, like 5 years, and *cannot* get it back, but in return you get a guaranteed higher rate of return than for something like a CD?
It just seems like a bank would benefit from having *guaranteed* use of my money for a certain period of time, and so could pay a corresponding higher interest rate than a CD or money market.
Is there such a creature? Or is there just no demand for that, as there are too few people who could really, honestly put $X into an investment and *not be able* to get it out for a certain amount of time?
Is there a "next step up" in that kind of thing? Ie. an investment where you *really commit* your money for a specified term, like 5 years, and *cannot* get it back, but in return you get a guaranteed higher rate of return than for something like a CD?
It just seems like a bank would benefit from having *guaranteed* use of my money for a certain period of time, and so could pay a corresponding higher interest rate than a CD or money market.
Is there such a creature? Or is there just no demand for that, as there are too few people who could really, honestly put $X into an investment and *not be able* to get it out for a certain amount of time?