9 thoughts to “From HYSAs to CDs, Here’s How to Level Up Your Financial Savings”

  1. What are your thoughts about putting money in an IRA? Principal can be withdrawn penalty-free. If one feels like the money probably won’t be spent anyway in the short term, you might be able to buy while the market it low (or at least lower). Definitely not without some risk, though. Also, IRA contribution deadline was extended to June just like tax deadline.

    1. That’s only true for a Roth IRA, not a Traditional IRA. People have advocated this “benefit” of Roth IRAs for a while now, but try pulling out your $6,000 contribution when the account balance dropped to $4,200… Houston, we have a problem!
      Only as a last resort should the Roth IRA contributions be considered for withdrawal.

  2. How would you suggest starting with a CD or even CD ladder? $1k , $2k etc… or $2, $4, $6k at a time? I know it’s basic but I only have a small chunk of savings and want to dip in. But maybe one toe at a time? :-/

  3. I have been buying 11-month “no-penalty” CDs from Marcus by Goldman Sachs. As long as I don’t touch the funds for the first 7 days, I can then withdraw the funds at any time without paying a penalty starting on Day 8.
    To answer “askingforafriend” about starting a CD ladder, you can do it multiple ways: as stated in the article, you can buy multiple CDs with different maturities (different lengths of time, aka 1, 2, 3, 4 years.) Or you can start by buying 1, say a 12-month CD. Then month 2, buy another 12-month CD. Now you have 1 maturing in 11 more months, and another 12 months from now. Repeat, and you’ll have CDs maturing every month, which you can then roll into another CD of 12 months, keeping your ladder growing.
    Also, a question I never knew I had about CDs was how does the interest get paid? What I’ve found is the interest gets paid into the CD. My $1,500 CD now has like $1504.xx after a month. Kinda cool

    1. As someone who works at a bank, the options for interest on CDs varies. From what I’ve learned (at least at my bank), there are three options:

      1. The interest is added into the total amount of the CD. (The most common option that I’ve observed.)
      2. Interest is paid by cashier’s/official check to the customer at each interval that interest would be added.
      3. Interest is deposited/transferred directly into a checking or savings account , either with us (usually) or another bank.

      Just thought I’d throw that out there!

  4. I find that the CD rates are not that different from HISAs where you can more easily withdraw the money. The CD penalty is typically several months of foregone interest, so you don’t pay out of pocket but there is the opportunity cost. I still use Wealthfront for our HISA but the rate has dropped considerably.

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