Thrifty Spending Issue 71

FEATURE ARTICLE:  A safe way to invest

A relatively safe investment instrument is the traditional certificate of deposit (CD) that you may purchase from your local bank. Federally insured for up to $250,000 per depositor, per institution in interest and principal, CDs offer you a fixed interest rate for depositing your money for a specific period of time. If you withdraw your money before that period is up, you may be subject to interest rate penalties.

CDs may also be purchased through most brokerage firms. The brokerage firm will shop the market and find the most attractive rate for you, even if it is out of state. This is something you might find difficult to do on your own. CDs purchased this way are called Brokered CDs.

CDs are most suitable for purchasing and holding to maturity. However, you may find it necessary to dispose of CDs prior to maturity. An important distinction between Brokered CDs and Bank CDs is the different means for early redemption. With a Bank CD, should you redeem your CD early, you will typically be assessed an early withdrawal penalty. Brokered CDs trade in the secondary market which provides you with the opportunity to sell your CD at prevailing market prices, which may be worth more or less than the original amount you invested.

Brokered CDs are more complex and carry more risks than CDs offered directly by banks. Brokered CDs may not be suitable for all investors. Before you purchase a Brokered CD, make sure you fully understand all of its terms and carefully read its disclosure materials provided by your financial professional.

MONEY SAVING TIP:  Don’t buy new

There’s no two ways about it – getting something in the original packaging often means paying twice the price. This mistake is most costly when it comes to cars, but it applies to many things: furnitureclothingtextbooks…the list is endless. So whenever practical, skip the stores and showrooms and choose thrift stores, yard sales, eBay, and Craigslist.


DID YOU KNOW….Many employers use credit history as a tool in their pre-employment screening?  It is used as a measure of judgment and character. If you can’t manage your financial obligations, employers may think it’s a sign of irresponsibility. Some employers think that if your monthly debt payment is higher than your salary, it may distract from your performance.

To make sure you know what employers will be looking at, check your credit reports before they do.  Consumers can check their credit report as often as they would like, without it affecting their score. Everyone is entitled to one free report from each of the bureaus every 12 months. Visit for more information.