I never applied for CD before and don't know much about it. I saw a sign posted infront of my Credit Union about a 5.00%APY on a 5month certificate. Looking to park 10K of some money i saved. How much will the initial 10K be when it matures @ 5 months. I guess i'm confuse about the 5% that it will yield.

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nkyguy1988 t1_j69c46t wrote on January 28, 2023 at 6:03 PM

#1,558,024

The 5% is based if you held it 12 months. For 5 months you will earn 5/12 of that amount. That works out to about 2.08%, or about $200.

Interesting-Rich425 OP t1_j69d4ve wrote on January 28, 2023 at 6:10 PM

#1,558,202

Thank you u/nkyguy1988. Is that a decent return for a CD?. Lets just say i dont have any plans to use the funds in the next year or so. Are there any better options for me?.

MarbledCoffeecake t1_j69dm2y wrote on January 28, 2023 at 6:13 PM

#1,558,287

Replying to Interesting-Rich425 (#1,558,202)

5% is very high for a short-term CD. Just make sure that it's only 5 months, there aren't limits, etc., and you'll be good

nkyguy1988 t1_j69dyv9 wrote on January 28, 2023 at 6:15 PM

#1,558,352

Replying to Interesting-Rich425 (#1,558,202)

Good for short term. Be aware of grace periods auto renewal. Very likely they will renew it to something paying next to nothing if you don't do something with it in 5 months.

Interesting-Rich425 OP t1_j69emej wrote on January 28, 2023 at 6:20 PM

#1,558,440

Replying to MarbledCoffeecake (#1,558,287)

Thank you. I just checked my bank's website about the promo and it only mentions early withdrawal penalty, minimum balance of 1k to open, and that after 5 months that it will convert to Soar Money Market Account.

Interesting-Rich425 OP t1_j69f1i7 wrote on January 28, 2023 at 6:23 PM

#1,558,495

Replying to nkyguy1988 (#1,558,352)

Fine print says that after 5 months that it will convert to Soar Money Markets Accounts. What do i need to watch out for after maturity that would make me want to move the money out.

nkyguy1988 t1_j69fgar wrote on January 28, 2023 at 6:25 PM

#1,558,559

Replying to Interesting-Rich425 (#1,558,495)

Whatever the current rate on that new account is. They will (should) send you a reminder that it's coming due. Then you will have about 10 days depending on their language to do something with it penalty free.

Interesting-Rich425 OP t1_j69g2wn wrote on January 28, 2023 at 6:30 PM

#1,558,648

Replying to nkyguy1988 (#1,558,559)

I guess in my situation its a no brainer for me not to sign up for the promo my CU is offering for atleast 5 months.