BestCashCow today shows online banks offering one-year CD rates as high as 2.28%. Depending on where you live, you may also find local banks or credit unions near where you live that have 1-year CD rates at or around that level.
It is very compelling to want to rush into 1-year CDs at or around that level with any FDIC-insured bank up to FDIC limits. Savings rates are still strong, but they seem guaranteed to fall further as we work our way through 2020.
But, it also seems to me that it is an especially important time to think very, very differently about liquidity than we may have ever thought about it before. As we work our way through a COVID-19 crisis that is certain to become more and more profound over the next several months with a desperate President.
If you anticipate that you might be economically vulnerable through a loss of job or sickness, the next year would be an important time to keep your liquidity.
Those who are not economically vulnerable and are certain to have the resources to get to the other side of the Coronavirus pandemic will also want to be certain that they have the liquidity to take advantage of opportunities that we will certainly see in equity and bond markets over the summer and fall as it proves difficult to safely reopen the economy. Opportunities to invest in real estate and in struggling small businesses where you live are almost certain to emerge as well.
Finally, when I encourage people to be careful to preserve their liquidity, they often tell me that they can always get their money out of CDs with the payment of an early withdrawal penalty. I would encourage these folks to read this article that I wrote in 2016. Banks and credit unions retain discretion to deny early withdrawal request, and while it is exceedingly rare, we really do not know what steps banks may need to take to preserve their positions as we get through 2020.
BestCashCow has always advocated that consumers keep large percentages of their assets in cash for difficult periods and that they make the most of their cash by seeking the highest returns available. This next year, however, could be an important time to favor liquidity over the premiums that short-term CDs may offer.
If you insist on locking down a rate, no penalty CDs may offer a solution. You’ll find those rates listed among our special CD products here.
Comments
Richard darling
April 16, 2020
Do you really expect us to believe anyone who says, "desperate President who is bound to continue to cause death and destruction before he finally leaves office on January 20, 2021." Such a careless comment. He needs to be disciplined for personal opinions like these.
Is this review helpful? Yes:19 / No: 18
joe
April 20, 2020
I may be naive, but to say, "desperate President who is bound to continue to cause death and destruction before he finally leaves office on January 20, 2021."
I find offensive...
Is this review helpful? Yes:19 / No: 18
dave
April 20, 2020
I also was offended by the guy who remarked about our President. If he ever said that about Obama,He would never get away alive.
Is this review helpful? Yes:18 / No: 14
Larry
April 21, 2020
Your biased comment about the Greatest President this nation has ever had the privilege to serve tells me you are nothing but a I'll (sic) informed, blind, blow hard, like most money managers!
Is this review helpful? Yes:16 / No: 19
R
April 22, 2020
As we work our way through a COVID-19 crisis that is certain to become more and more profound over the next several months with a desperate President who is bound to continue to cause death and destruction before he finally leaves office on January 20, 2021.
Are you a fool or just out of touch with reality...
If things were left up to the Left wing Radicals who can't see beyond the hateful spiteful nose on their ugly face the socialist democrats living in their gated mansions while hard working americans get screwed by the Nancy Pelosi's and chuck schulers with the aid of the Commi media types that print this garbage about the president we would be in worse shape than we are. Instead of focusing your political hatred for a Republican and Christian's around the country you would do better to put the rage where it would do the most good, like who is behind this pandemic China you fool and not the only man who is doing something to help other people. The problem with hate is it is a poison that grows and grows just like a virus and you my friend are infected.
Is this review helpful? Yes:17 / No: 19
Jerome Jackson
April 22, 2020
Agree with the author's analysis. It is fascinating that at least 5 Trump-loving racists were able to make it to the third paragraph and then to write comments.
Is this review helpful? Yes:14 / No: 7
McHale
April 27, 2020
Jerome,
Simple minds pull out the race card......
Is this review helpful? Yes:14 / No: 3
RK
May 15, 2020
To blame the President for a pandemic is not only ridiculous, it shows the true nature of the author of this article. Obviously, I will look elsewhere for financial advice, from someone who is not using the current pandemic disaster to push his own political views.
Tell me, Mr. Socolow, do you blame every leader of every country worldwide for the deaths from this pandemic?
Is this review helpful? Yes:9 / No: 9
Rod Flunck
May 16, 2020
@RK You may have been asleep the last 4 years, but since this man became President he has undermined every preparedness measure imaginable, leaving the US completely exposed to this disaster. Now, as over 80,000 Americans have perished, he celebrates his rankings and continues to motivate his base to take to the rise up against countermeasures. As for Mr. Socolow, I have been reading his articles on this site for years, and if anything he is much too deferential to the President.
Is this review helpful? Yes:12 / No: 9
Joe
October 22, 2020
Trump is a complete moron he is a liar whats worse people believe him so sad for us all
Is this review helpful? Yes:5 / No: 7
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