You Can Game Some Long-Term CD Rates

A couple of months ago we advised against buying long-term CDs at the bottom of a rate cycle.

The common wisdom is to go long at the top of a rate cycle and short at the bottom.

Some of our readers disagreed with that strategy, arguing that it’s possible to make more money with long-term CDs than short-term CDs even if you have to bail early and pay a penalty.

So we decided to test that theory with the best nationally available 5-year CDs.

One would indeed pay more than the best short-term CDs if you cashed it in after just one or two years.

But the early withdrawal penalties on the other two are so onerous that you could actually lose money if you take your savings out too soon.

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