[quote=flu]For me, personally, short term, I’d like to keep a percentage liquid…With CD rates like 1-1.5%, I gave up tieing any significant amount of money up for 1 year+ in a CD. 1-1.5% interest ends up being closer to 0.75-1% after taxes anyway…If rates happen to go up while you’re stilled tied down, you’re pretty screwed….[/quote]
That’s why I looked into the penalties for early withdrawal… it was precisely because I want to be able to move the money to higher rate cd if the rates go up. I explicitly asked the question at SDCCU… I can pull the money and reinvest it in a higher rate if the rates go up… No principal lost, the only thing at risk is the most recent 6 months worth of interest.
You’re only screwed out of 6 months of interest.
This is not the case on cd’s purchased through my brokerage account (Schwab)… My F.A wouldn’t let me cash those out early. Fortunately, the CD money I have there is at a higher rate so I’m not as worried about it. FWIW – my boss is the one who tipped me to the SDCCU policy… He’s done it several times – pulled out of lower rate cd’s and into higher rates if the rates popped up.
