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So for example, a 3 month CD on a fixed 4.16% interest rate on a 16k investment would yield approximately $650 at the time of maturity? Or because it may be APY, will it earn approximately $160 at 3 month maturity?
Great question here. To be specific for this, at the time of maturity, you would earn approximately $166 on a $16,000 investment over 3 months with a 4.16% APY. The $650 you mentioned would be the interest earned if the CD were held for the entire year, not just 3 months. The rate is based on annual so another way you could view it is 1/4 of the 4.16% interest rate. Since 3 months is a quarter of a year. $166 is the interest you would earn. Unfortunately it's not as high as many would think but since these are extremely low risk and guaranteed returns over the fixed time period, this is how it works. Hope this helps and thanks for watching my content :)
I have been researching CDs for a while and purchased my first one! I have a quick question though. I see a lot of banks that I have never heard of that offer high. interest rates. I'm scared to invest my money into these random online banks. Are they safe? I've researched some of them and so far I've read good and bad things about all of them.
I'd say to make sure the bank is FDIC-insured, which protects your money up to $250,000, and read reviews to check their reputation. The banks through raisin should all be secure, but going through their own websites and reading reviews should help you out as well. You could always go through other options, such as brokerage firms like fidelity.
Hey no worries! So the interest rate is what you would received for holding the investment for a full year. It is an annualized rate. So for three months, you would get 1/4 of what you stated 3k. So 1/4 of 3k is $750 for holding 3 months. Hope this helps you out! Thanks for watching my content!
So the point is if your goal is to leave that savings alone and not touch it then it's best to have that money work for you. Capitalize on it while you're saving it. Then when it's matured and you're ready to use it you now have extra
So you end up making the same amount of money with a 4 month CD than a 7 month one if both have the same interest rate and apy ? Why would I want to wait 7 months to make 5k if I can make the same amount in 4 months ? can someone tell me if I'm right please ? Maybe I just don't understand
Hey so the amount you make is based on an annual return. If it’s 5% on $10,000, that is $500 after a full year, 12 month cd. If it’s a 6 month, after 6 months you will have made $250. I hope this clears up the confusion. It is based on an annual rate.
If you got 5% of 250k, that would be $12,500 income earned. The amount you would pay taxes depends on your tax bracket. The income will be through a 1099-INT form and be taxed as ordinary income on top of your taxable income. Hope this helps! :)
Do you use CDs?
💵 Start earning with CDs on Raisin today! Sign up in less than 5 minutes with a minimum deposit of just $1.
Get started here: dannysully.com/Raisin
In today’s market the short term CDs are higher interest rates than long term.
Exactly why it's important to be somewhat up to date with the market :)
Great info. Keep up the great work.
Thank you so much!! Will do :)
I’m thinking of doing a weekly cd ladder on 6 month CDs for my 6 month emergency fund. 🤷♂️
So for example, a 3 month CD on a fixed 4.16% interest rate on a 16k investment would yield approximately $650 at the time of maturity? Or because it may be APY, will it earn approximately $160 at 3 month maturity?
Great question here. To be specific for this, at the time of maturity, you would earn approximately $166 on a $16,000 investment over 3 months with a 4.16% APY.
The $650 you mentioned would be the interest earned if the CD were held for the entire year, not just 3 months.
The rate is based on annual so another way you could view it is 1/4 of the 4.16% interest rate. Since 3 months is a quarter of a year.
$166 is the interest you would earn. Unfortunately it's not as high as many would think but since these are extremely low risk and guaranteed returns over the fixed time period, this is how it works.
Hope this helps and thanks for watching my content :)
thank you so much for your video
Of course!!
I have been researching CDs for a while and purchased my first one! I have a quick question though. I see a lot of banks that I have never heard of that offer high. interest rates. I'm scared to invest my money into these random online banks. Are they safe? I've researched some of them and so far I've read good and bad things about all of them.
I'd say to make sure the bank is FDIC-insured, which protects your money up to $250,000, and read reviews to check their reputation. The banks through raisin should all be secure, but going through their own websites and reading reviews should help you out as well. You could always go through other options, such as brokerage firms like fidelity.
Interest earned is taxable, just like a hysa?
Yes, the interest is taxed as ordinary income. Great question!
What do you recommend regarding BMO ALTO?
appreciate the video but I still don't fully understand how accruing interest works? 60k at 5.16% interest wouldn't be 3k a month?
Hey no worries! So the interest rate is what you would received for holding the investment for a full year. It is an annualized rate. So for three months, you would get 1/4 of what you stated 3k. So 1/4 of 3k is $750 for holding 3 months. Hope this helps you out! Thanks for watching my content!
@DannySully is there any platform I can message you on brother ? ts confusing me
So for 10k i can make 500 bucks
Yes. But if you keep it in your checking account it gains $0. If you keep it in your savings account it gains .1%.
So the point is if your goal is to leave that savings alone and not touch it then it's best to have that money work for you. Capitalize on it while you're saving it. Then when it's matured and you're ready to use it you now have extra
So you end up making the same amount of money with a 4 month CD than a 7 month one if both have the same interest rate and apy ? Why would I want to wait 7 months to make 5k if I can make the same amount in 4 months ? can someone tell me if I'm right please ? Maybe I just don't understand
Hey so the amount you make is based on an annual return. If it’s 5% on $10,000, that is $500 after a full year, 12 month cd. If it’s a 6 month, after 6 months you will have made $250. I hope this clears up the confusion. It is based on an annual rate.
So for example if i invest 250k for 1 year at welfargo bankhow much will i make after tax please?
If you got 5% of 250k, that would be $12,500 income earned. The amount you would pay taxes depends on your tax bracket. The income will be through a 1099-INT form and be taxed as ordinary income on top of your taxable income. Hope this helps! :)
@@DannySully thank you very much sir!👍
@@DannySully does the money increase every month or every year?
can I edit your youtube videos?
CAN i edit YOUR CZcams videos?