Certificate of Deposit

Posts Tagged ‘finance’

Question: Certificate Of Deposit?

I’m not sure how much money I would get by creating a CD investment. I’m not sure if I’m doing the calculators right. How much do you think I would get if I put in 3,000$ for just a year? Thanks.

Answer: Well one year CD’s are paying between 3.5% and 4.0% so that would be between $105 – $120

Question: How risky are Money Market accounts and how much interest will I earn?

I will be opening it with $1000 and adding $1000 each month for the next year. The interest will be 0.10% and the APY will be 0.10%. At these rates, what will my balance be at the end of the year?

Also what is the risk of losing my money with a Money Market account? I have heard that they are unstable.

Answer: What do Money Market Funds Invest In?

These funds invest in short term instruments that mature in less than 13 months – at a maximum. By keeping a short time-frame, these funds attempt to reduce risk. In fact, the SEC says that the average maturity of all the investments in a Money Market fund must be less than 90 days. The longer you loan money to somebody, the greater the chance that something will happen and they won’t be able to pay you back.

Typical investments inside a Money Market fund might be US Treasury issues, short-term corporate paper, and CD’s.

What Risks am I Taking in Money Market Funds?

There are at least three risks that we should highlight.

First, a Money Market fund is technically a security. The fund managers attempt to keep the share price constant at $1/share. However, there is no guarantee that the share price will stay at $1/share. If the share price goes down, you can lose some or all of your principal. The US Securities and Exchange Commission notes that “While investor losses in Money Market funds have been rare, they are possible”. In return for this risk, you should earn a greater return on your cash than you’d expect from an FDIC insured savings account (Money Market funds are not FDIC insured).

Next, Money Market fund rates are variable. In other words, you don’t know how much you’ll earn on your investment next month. The rate could go up or down. If it goes up, that may be a good thing. However, if it goes down and you earn less than you expected, you can end up needing more cash.

A final risk you’re taking with money market funds has to do with inflation. Because money market funds are considered to be safer than other investments like stocks, long term average returns on money market funds tends to be less than long term average returns on riskier investments. Over long periods of time, inflation can eat away at your returns.

Personal Finance & Money Management : Managing Money Market Accounts

Question: can I write a check with entire amount off from my Chase Money Market account?

Hi,
Suppose I have $20K on my Chase MoneyMarket account, but I want to write a check of $20K for paying off my expenses. Can I do that for writing a check with entire amount off from the Money Market account?

Thank you!

Answer: not unless what to close the account which might be a great ideal since every month it is below a certain level you will be charge a fee!!!

Monetary Revolution