Where Should I get a Certificate of Deposit?

You Never Get Something for Nothing

Me:  Turbotax is suggesting I take a standard deduction of $5,600, which would be nice … but if I ever get audited I won’t have the receipts or anything to back it up.

Dad:  If you take the standard deduction, you do not need any documentation.

Me:  Sweet!  New subject.  I was thinking of getting a certificate of deposit.  I guess getting one at Bank of America would be easiest cause that’s where all my accounts are… however … What is all this stuff about leaving big banks and going to smaller local banks?  Am I going to get the same rates everywhere?  Shouldn’t I help the little man?!?

Dad:  I haven’t seen “stuff” about moving to smaller banks.  My guess is that it is marketing backlash against the notion that big banks are all Wall Street crooks. Go where ever you get the best rates – and, no they won’t be the same everywhere. You might think you are helping the little man. But many of these little banks are owned by big banks. Rates are starting to move upward, so when you look at CD structures make sure you are not getting locked into a low rate – it should have some mechanism that allows you to elect a higher rate if it’s available.

Me:  Is the term “high yield” just a marketing trick that makes me think I’ll make lots of money?

Dad:  Pretty much. A rate is a rate. If they call it “High Yield” it might have a slightly higher rate than other CDs they offer, but be more restrictive in some way. You never get something for nothing.

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