good question to which I have no answer

Traditionally, CD's have paid higher interest rates than regular savings accounts. However in Dec. of 2008, when the feds went to a zero interest rate policy (ZIRP), all banks and credit unions began to lower their rates. When we began our savings plan, we decided to create a 5 year CD ladder. What that means is that every six months we would open a CD for whatever amount we had saved during the previous six months. We would open the CD for a 5 year term, which would pay the highest rate, back then it was very close to 7%. As time went by we had a CD maturing every six months at which time we would decide if we were to cash it out, or to add money to it and re-invest it for another 5 years. The first 5 years were the major saving years because once we had that ladder established, we knew that we would have money every six months if we needed it. Because of this ladder we are still averaging 3% on our CD's. Why not invest in the stock market? Because we have a very low tolerance for risk. We feel that a little bit of return is safer than losing some of our principal. Just a personal choice at our age.

Back to your question,....the longer the CD term, the higher the interest rate, and some banks have minimum amounts in order to open a CD ranging from $500 to $2500. If you go to http://www.bankrate.com/compare-rates.aspx then under rates click on CD's you will find a comparison of rates for online banks nationwide. For example I just saw that GE Capital bank is offering 1.05% for a 1 year CD with $500.00 minimum deposit. Be sure the online bank is FDIC insured or if its a credit union that it is NCUA insured.

Why do we have a ZIRP? Well the feds want us to spend our money to boost the economy. They do not like savers. Plus the national debt is paid back with cheap money. That is the short of it.

On another note, I received a call from my local Chase Bank yesterday. Both my CC are from Chase, their normal cash back plan is 1% on all purchases and 5% on certain categories every quarter. (example: Jan-Feb-March would be 5% back on gasoline purchases) Anyway, they told me on the phone that if I opened a checking account with them that I would be entitled to a 10% cash back on all my CC purchases monthly. This is big, and I plan to go see what the fine print is on this offer. Once I know, I will share that with you.

I hope I have helped answer your question.
Toty

Wow... that is a heck of an offer from Chase... hopefully it works out

Your idea with the ladder is one I've entertained but haven't done yet.

One thing I have noticed with me and finances is I really look at everything involved with it. Really analyze it all. And honestly, it is something I'm grateful for because in the past I was very impulsive with money.

As far as stocks and that. Right now, I'm involved with that with my 401K. The rest, I'm just going to stay with banks and safe investments...

Thanks totylupe let us know more about chase offer when you find out

You should go to your local library and read Rich Dad, Poor Dad by Robert Kiyosaki and then continue on with his next books. You will learn more than you can imagine!!