the certificate of deposit interest rates at my bank for under 10k are as follows:

3 year: 2.47%

2 year: 1.70%

13 months: .9%

12 months: .6%

6 months: .4%

savings account: .3%

yesterday i put in 2k for the 13 month .9%, but i've rethought that.

the penalty for withdrawing your funds before the maturity date is a fine of three months worth of interest.

bearing this in mind, if i put in 1k for 12 months at the 13 month rate, i end up with about 1,009

if i put in 1k for the 3 year rate, i end up with 1025 after 12 months. once you subtract the three month interest from that, i end up with 1019

in this way i would end up with 1019 for signing up for three years and canceling it, vs a little over 1009 if i signed up with and stuck with the 13 month.

i am planning on opening five separate CD accounts with each having 1k in them, so that i can withdraw part of the money when / if i need to and not pay the whole fee.

seems to me like the only danger of locking into the 3 year CD is if interest rates skyrocket between now and then, which is possible but unlikely. the one thing i am wondering is at what point of interest rate change would i cancel, pay the three month fee, and lock in the new rate.

any thoughts on this?

*edited. apparently the penalty for canceling any CD over 11 months is 6 months of interest, not 3

3 year: 2.47%

2 year: 1.70%

13 months: .9%

12 months: .6%

6 months: .4%

savings account: .3%

yesterday i put in 2k for the 13 month .9%, but i've rethought that.

the penalty for withdrawing your funds before the maturity date is a fine of three months worth of interest.

bearing this in mind, if i put in 1k for 12 months at the 13 month rate, i end up with about 1,009

if i put in 1k for the 3 year rate, i end up with 1025 after 12 months. once you subtract the three month interest from that, i end up with 1019

in this way i would end up with 1019 for signing up for three years and canceling it, vs a little over 1009 if i signed up with and stuck with the 13 month.

i am planning on opening five separate CD accounts with each having 1k in them, so that i can withdraw part of the money when / if i need to and not pay the whole fee.

seems to me like the only danger of locking into the 3 year CD is if interest rates skyrocket between now and then, which is possible but unlikely. the one thing i am wondering is at what point of interest rate change would i cancel, pay the three month fee, and lock in the new rate.

any thoughts on this?

*edited. apparently the penalty for canceling any CD over 11 months is 6 months of interest, not 3

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