Article: That 5% CD Is a Great Deal –

Description

With the Fed cutting interest rates, some savers are learning there is fine print on their certificates of deposit. The era of 5% cash returns is ending early for some investors.

Part A) Complete Each Question

(Separate your response by question number)

1. Before the Fed began cutting rates, financial institutions (banks, etc.) offered CDs promising high yields for locking up cash years into the future. Some of the highest yielding money market securities such as CDs had what feature (provision) attached to it?

2. Why did features like this get little attention when rates were rising? When you have this feature attached to the security, when is the investor at threat of the security being called?

3. According to the article, what did one investor write in Reddit after having what happen? The investors receiving cash back for their CDs, now have to reinvest at what, if they want to reinvest back into CDs?

4. Most CDs aren’t callable, but the ones that are typically offer higher or lower rates? Why?

5. According to the article what are some things mentioned to avoid panicking if you owned a callable CD? Do you agree or disagree? Do you own money market securities? As rates are falling have you changed or thought about where to allocate?

Part B) Post a link of One article that supports One of your responses to the questions above and/or provides more insight on the subject discussed in the article.