5 Yr CD Rates @8.5%

[Arc]

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

 

[REWahoo]

Offshore bank, not FDIC guaranteed.

 

[Dawg52]

Boy, if we could get those kind of rates here, my stock allocation would be zero.

 

[cashflo2u2]

Run!

 

[retire@40]

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.

 

[cute fuzzy bunny]

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...

 

[thefed]

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

 

[retiringby50]

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.

 

[brewer12345]

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.

 

[thefed]

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