DeepSummary
In this podcast episode, Nicole Lapin discusses different types of CDs (Certificates of Deposit) and their features. She explains seven varieties of CDs, including brokered CDs, jumbo CDs, bump-up CDs, step-up CDs, liquid CDs, callable CDs, and add-on CDs. Each type has its own advantages and disadvantages, such as varying interest rates, flexibility, and risks.
Lapin highlights the key differences between these CD types, such as brokered CDs being purchased through brokerages rather than banks, jumbo CDs requiring a large minimum deposit, and bump-up CDs allowing for interest rate increases during the term. She also covers step-up CDs with predetermined rate increases, liquid CDs offering penalty-free withdrawals, callable CDs that banks can redeem early, and add-on CDs allowing additional deposits.
Throughout the episode, Lapin emphasizes the importance of understanding the terms and conditions of each CD type, as well as shopping around for the best rates. She advises listeners to consider their financial goals and risk tolerance when choosing the appropriate CD for their needs.
Key Episodes Takeaways
- There are various types of CDs, each with its own features and suitability for different financial goals and risk tolerances.
- Brokered CDs, jumbo CDs, bump-up CDs, step-up CDs, liquid CDs, callable CDs, and add-on CDs offer different combinations of interest rates, flexibility, and risks.
- Understanding the terms and conditions of each CD type is crucial before investing.
- Shopping around and comparing rates from different banks and brokerages is recommended to find the best CD for one's needs.
- Factors such as the investment amount, the need for liquidity, and the potential for interest rate changes should be considered when choosing a CD type.
- CDs can be part of a diversified investment portfolio and a way to earn modest returns while protecting principal.
- Reading the fine print and understanding the risks associated with each CD type is essential to making an informed decision.
- CDs with more flexibility or higher rates may come with trade-offs, such as lower initial rates or the risk of being called by the bank.
Top Episodes Quotes
- “Brokered CDs may offer flexibility to sell on the secondary market before maturity. And don't get me wrong, being able to sell early is a huge perk with this type of CD, but it's not all rainbows and butterflies.“ by Nicole Lapin
- “Jumbo CDs typically offer higher interest rates than standard CDs due to the, well, jumbo investment.“ by Nicole Lapin
- “Bump up cds give you that, have your cake and eat it to feeling they're a hedge against rising rates while maintaining the core benefits of a CD.“ by Nicole Lapin
- “If you are squirreling away money for your future baby fund or cash that you might need sooner than expected, this can be a great choice to give yourself a little more flexibility.“ by Nicole Lapin
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Episode Information
Money Rehab with Nicole Lapin
Money News Network
6/5/24