One question.. don’t have much time to answer before turning into pumpkin. Are your retirement accounts (401K, profit share, etc) fully funded?
In a general statement; the CDs are actually losing you money in three ways.
1) They are not keeping up with the mortgage costs they could displace (particularly when you include the fact that the CD’s interest is taxed at income rates, further dropping the yield)
2) Opportunity cost of investing somewhere else with a better yield. Most sweeps at brokerages range from 2.2% to over 5%. This is the ‘safe’ money at a brokerage.. stock yields vary.
3) The value of the Dollars in the CDs is actually dropping. If you look at the foreign exchange rates, the US Dollar is dropping against several currencies.
The MMA scheme w/ the program will not really help. Right off the bat, it adds a very expensive cost on top of everything for the software. Then you have that HELOC with a 21% peak interest rate. The other thing is that you have cash that you could potentially drop into the mortgage anytime you like. Using a HELOC for mortgage payments would actually cost you more.
A better allocation of funds combined with a HELOC for emergency cash would work better.. or using the CDs to pay down the mortgage with a HELOC for emergency cash would also work better. You can definitely get better than 21% peak for a HELOC. The choices all depend upon your risk tolerance and where you feel risk is.
