Nov 6 2013, 06:21 PM
QUOTE(plumberly @ Nov 5 2013, 07:46 PM)
One thought came to my mind a few days ago. Someone raised the question about getting multiple FDs when the amount is large. Tied to the large amount is the ability to negotiate for a higher rate.
Now, the potentially good part is, in the event that one needs to prematurely withdraw some money, then one can terminate one of the FDs without loosing out interest on the rest and also still keeping the higher rate for the remaining FDs.
This is of course provided the bank does not keep track that these FDs are supposed to be a package for the higher rate and does not allow customer to partial withdraw.
Anyone has experienced this?
Cheerio.
I have used and still using the concept of laddering for my FDs. Essentially, you split and stagger one big amount into multiple FDs each of them maturing right behind each other. I’m lazy to explain the concept here, you can google under CD (yes, CD for certificates of deposit) and you can find all kinds of info and calculators. When using the calculator, make sure you use months instead of years. The effect of using laddering is you get the flexibility of withdrawal in the event of emergencies while giving you a very slightly better yield.Now, the potentially good part is, in the event that one needs to prematurely withdraw some money, then one can terminate one of the FDs without loosing out interest on the rest and also still keeping the higher rate for the remaining FDs.
This is of course provided the bank does not keep track that these FDs are supposed to be a package for the higher rate and does not allow customer to partial withdraw.
Anyone has experienced this?
Cheerio.
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