Need advice on putting money into a CD, don’t know where to start

Submitted by itsthebestlife t3_127zmmm in personalfinance

I need to put about $30,000 into a CD. The soonest I would need to access it (if ever) is in 6 months to 1.5 years. If I do need to access it in that time, it may only need to be $5-$20k of it (again, if at all). Should I put a small amount into a year CD and the rest into a longer one? Not sure where to even start with this! I’ve had money sitting in a regular savings account for over 7 years, I’m kicking myself for not doing something with it.

Thanks everyone!

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Berto_ t1_jegjmax wrote

Do a CD ladder. 3, 6, 9, and 12 months. Divided equally. When the 3 month matures, convert it to a 12 month. When the 6 month matures convert that to a 12 month and so on. Eventually, you will have 4 - 12 mont CD maturing every 3 months. This gives you access to some of your cash while still allowing you to earn interest.

I quickly explained that, but make sure you do your research on it.

It doesn't necessarily have to be 3 months apart. Do intervals that work for you

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homeboi808 t1_jegjo2t wrote

> Should I put a small amount into a year CD and the rest into a longer one?

You can do that, sure.

Do you have a stock broker (say Fidelity) that you use?

I have Fidelity and buying CDs thru them are easy, just select the time-frame you want and pick one. They also have automatic “ladders” that you buy and it is split between different time-frames. You just have to fund money to them from your bank account after you link them (takes a few days).

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homeboi808 t1_jegt2jo wrote

Replying to itsthebestlife (#2,554,443)

One thing to add:

With CDs the taxes on earnings are on your income tax bracket, unless bought in a retirement account like an IRA.

With stocks/funds, if you own it for more than 1 year then when you sell the taxes on earning are lower (15% for people in the ~$40k-$400k income range). Selling them in under 1yr has earnings taxed on income tax bracket just like CDs.

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