Certificate of Deposit

Archive for the ‘Certificate of Deposit’ Category

Question: Will a 5 year Certificate Of Deposit interest be taxed yearly @ accrual or at maturity?

Say I was a Panama resident (no tax , no employment) & my only source of income is interest from my Certificate Of Deposit(from Panama Bank) maturing in 5 years (again ,not taxed).

What if I stay/holiday in the US for the first 4 years – earning nothing – (no citizenship/no home ownership). & on the 5th year when interest is due, I move back to panama & collect the interest.

Will I be taxed in the US even though the money was not earned in that financial year?

Will I be able to do this again & again.-Having to stay in Panama once every 5 years?

Answer: No it would not be taxed as you are not a US CITIZEN and you are not working therefore you are not subject to income tax

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CD 1999: Pony Car Convertible Comparison Road Test

Question: What are municipal bonds and are they safe as certificate of deposits?

and also, mind telling me how much taxes i would have to pay on annual C.D interest vs municipal bonds?

Answer: They are not as safe as a CD. Some munis are junk bond status. There is no federal tax on most, but not all muni bonds. Some are taxed. If you buy muni bonds issued in your state there are no state taxes either. The taxes on a CD are at your normal tax rate. CDs are paying such low interest these days that the taxes on them will not amount to a great deal.

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