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Ladder CD's or other safe options for temporary parking of inheritance money

scsiguru 1,739 148 October 27, 2015 at 05:35 AM in Finance (2)

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Sadly, both of my parent's passed away earlier this year w/in 17 days of each other. I have two brother's one of which lived in their town (which is two hours from me), and he is the executor. Dealing with not only their sudden passing but also many other issues, we are now getting to the point of finalizing their estate. As part of the final settlement my share will be around $160K. I plan to fund the remainder of my daughter's education (about $15K) so she will be debt free with her undergraduate degree. As this has been very difficult for us, I don't feel I'm ready to just jump in and start to invest in anything with risk at this point.

So with that said, I'm considering putting the remainder of the cash into some ladder CD's or maybe park it somewhere with some return but not a lot of risk. What are some other options that I may missing? Thanks for any and all suggestions.



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CD ladder stacking is a good idea. You can also find plenty of saving accounts offering 1% interest. Those two are probably the safest for the moment.
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If you are looking for safety with some return, go with an online savings\money market account. Many offer about 1% return and you can take the money out anytime.

As to CD ladders...pointless imo. The rate of return is not much better (if at all) than the online savings accounts unless you go way out in the number of years and you also have to lock in your money for the term. With interest rates as low as they are and only having one way to go, there is absolutely no reason to lock in a CD rate for any term imo.
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If you want to take on a bit more risk, place the money into a target retirement fund. Less risky, put in a target 5-10 years from now, if you want a bit more risk, 10-20 years away. Now you CAN lose money in these. If you go this route, go with a low cost broker like vanguard so you don't get raked over the coals by fees.
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Quote from YanksIn2009 View Post :
With interest rates as low as they are and only having one way to go, there is absolutely no reason to lock in a CD rate for any term imo.

Agreed entirely with this comment.

Do I correctly infer, OP, that protecting principal is your primary goal? If so, you can go ahead and put into a CD Time deposit, but do NOT worry about laddering now. Simply put 100% of the money into a high yield money market savings account (your balance will qualify you for the highest yield tier, so probably in the 0.75-1.00% range).

Once interest rates start to increase, you can then start to layer into various duration CDs. But you still don't want to commit to long-term duration as no one knows how pricing will work in a rising rate environment. Comparing different banks are sure to result in wildly different rates at different durations
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