A: Certificates of deposit (CDs) are great if you need to lock up your cash for a future expenditure or if you’ve earmarked the money for emergencies. Otherwise, consider a short-term bond fund, like NEARX, which still gives you the flexibility you may want plus a higher short-term rate. It’s one of the few instances where the risk may be worth the reward. I don’t believe the rates on longer-term instruments carry enough of a premium to justify the risk of principal loss, any more than I think locking up your money makes sense right now given the Fed’s outlook.
Category: Money Map Report