40-.60 percentage points more in interest than a one year CD. Prone to be eaten away by inflation, especially if the CD is opened in a rising rate environment.įour year CDs currently pay between. The value of longer-term CDs are especially For this who remain within FDIC limits, the principal threat is inflation. Receive the uninsured money in case of a bank failure. If your deposit is over the FDIC limit then you may not Generally, an individual should not invest in a four year CD unless they are comfortable partingįour year CDs from FDIC insured banks are insured up to FDIC limits (generally $250,000 per account holder per bank).
The money (termed 'breaking the CD') high penalties make this undesirable. Four year CDs are a longer-term CD and offer a fixed rate for 4 years in return for a commitment to keep the money in the bank for this period of time.
