I set up a CD ladder for a part of my portfolio. Started out with 10 years, but let it shorten to 5 years given the interest rate curve. The intention of the CD is to function as a buffer when stocks go very volatile, and should hold living expenses for at least 5 years (up to 10). The reason for the ladder is to get a higher overall interest rate while every year at least one year of living expenses is available.
Since my renewal date is next month, here's my dillemma:
5 year CD best rate available: 2.3%
savings account best rate available: 1.65%
Current inflation eurozone: 0.7%
expected inflation 2015 / 2016 / 2019: 1.2% / 1.5% / 1.9%
Given that, I'm tempted to shorten the CD Ladder further. 3 year rate is 2.15% for example. 10 years is 3%.
What does the forum think? Note that moving this portion to stocks is not an option for me. Tax is not applicable (no taxes, sweet expat deal). Also, I'm in the eurozone.
Since my renewal date is next month, here's my dillemma:
5 year CD best rate available: 2.3%
savings account best rate available: 1.65%
Current inflation eurozone: 0.7%
expected inflation 2015 / 2016 / 2019: 1.2% / 1.5% / 1.9%
Given that, I'm tempted to shorten the CD Ladder further. 3 year rate is 2.15% for example. 10 years is 3%.
What does the forum think? Note that moving this portion to stocks is not an option for me. Tax is not applicable (no taxes, sweet expat deal). Also, I'm in the eurozone.