Business & Investing
Sponsored by

What to do with a CD

2,727 Views | 13 Replies | Last: 4 yr ago by Ranger1743
jbeck3487
How long do you want to ignore this user?
AG
I'm looking for suggestions on what to do with a CD that's worth roughly 30k. I would like to get better returns than it is currently getting. Should I leave it alone, put the money in mutual funds, pay off more of my mortgage, or put it all on black?

I'm 26 married with no kids (plan is to have at least 1 before 30). We have no debts other than mortgage. My wife and I both max out our IRA every year.

TIA for the advice
Ag13
How long do you want to ignore this user?
AG
When does it mature?

If you want better returns you'll have to take on risk and put it into the markets.
Baby Billy
How long do you want to ignore this user?
AG
Why do you have 30k in a CD at age 26?
TheCougarHunter
How long do you want to ignore this user?
AG
Huell Babineaux said:

Why do you have 30k in a CD at age 26?
This.

Who advised you to put that money in a CD vice an index fund?
jbeck3487
How long do you want to ignore this user?
AG
I was gifted the CD about 5 years ago when my gpa passed. At that time, I wasn't married and was planning on buying a house after I graduated so I never touched the CD.
Keeper of The Spirits
How long do you want to ignore this user?
AG
Assuming you have an emergency fund and no high cost debt and aren't going to need the money for 5 years. I'd put it in a mix of index funds with most in stock indexes. If it had been in the all market index since 2014 it be over 35k

If you need it soon I'd keep it in high yield savings or the cd
cjsag94
How long do you want to ignore this user?
AG
I agree fully with your post.

One correction though....It would be close to $48,000. But that's been an exceptional 5 year return I don't expect to repeat.
Keeper of The Spirits
How long do you want to ignore this user?
AG
Whether you use this money or other money. Do something big before you start trying to have that kid. We just had our first at 35 and traveled 1x to 2x a month before the kid got here, and now I wish we would have gone even bigger. You can still do things when the kid arrives but it's different.
Kenneth_2003
How long do you want to ignore this user?
AG
I find a CD, or a series of them, to be excellent for the emergency fund. One every 3 months... Its distant enough you're not tempted, but you can get to it immediately with a small interest penalty if you're in a jam.

Truthfully, $30k is a nice cushion. Especially if something were to get expensive and create loss of income; health or wife needs extended time after the kid.

jbeck3487
How long do you want to ignore this user?
AG
It's a 12 month CD that matures in August.
rfvgy12
How long do you want to ignore this user?
AG
Pay off the house
RockOn
How long do you want to ignore this user?
Assuming you have an emergency fund of at least 6 months, just put it all towards the principal on the home mortgage.

You'll "earn" a rate of return of your mortgage interest rate by never having to pay interest on that $30,000 again - which is (likely) higher than the CD rate. And there's zero risk. Your next, and every, monthly payment will have more going to principal from here on.

Also, you're under no moral obligation to keep it as a CD. That just happened to be your grandfathers investment choice for that time of his life.
Baby Billy
How long do you want to ignore this user?
AG
RockOn said:

Assuming you have an emergency fund of at least 6 months, just put it all towards the principal on the home mortgage.

You'll "earn" a rate of return of your mortgage interest rate by never having to pay interest on that $30,000 again - which is (likely) higher than the CD rate. And there's zero risk. Your next, and every, monthly payment will have more going to principal from here on.

Also, you're under no moral obligation to keep it as a CD. That just happened to be your grandfathers investment choice for that time of his life.

NoahAg
How long do you want to ignore this user?
Assuming you already have an emergency fund, put it toward a rental property.
Ranger1743
How long do you want to ignore this user?
AG
I'm your age and keep my down payment fund (30-40K) in CDs - but since you already have a home I would move it to another investment vehicle, pay off house early, or put it in a college savings fund for future kids, etc.
Refresh
Page 1 of 1
 
×
subscribe Verify your student status
See Subscription Benefits
Trial only available to users who have never subscribed or participated in a previous trial.