At Great Eastern Management we recommend staggering your CD maturities in order to get the best performance and yield from your portfolio. Rates are typically higher the longer out on the yield curve you go, but many investors have short term or cyclical/seasonal needs for money. To insure having money available every month many investors will invest all of their funds in short term (3 to 6 months) CDs and consequently do not take advantage of the higher long term rates. The simple answer is to use the most time tested investment strategy and build a laddered investment portfolio. This is the best way to protect yourself from interest rate swings on the way down, and take advantage of the rising rates on the way up.
Consider building a laddered portfolio with an average duration of 3 to 5 years. After you build the initial ladder you can structure it so that maturities come up every month, quarter or other incremental time that meets your needs.
CD rates are not tied to Prime or Libor and are fixed for the full term. There are no “Call” features or rate step options that will decrease your rate or have your money sent back to you prematurely in a low interest rate environment. Maturities should be staggered long and short to guard against interest rate swings.
You don’t ever have to waste time shopping around for the best rates. One call to Great Eastern Management will put you in touch with a list of hundreds of the most aggressive CD rates being offered across the country. Your funds are wired directly to the banks on the Fed wire system (we never handle or touch your money) and the CD is set up that day. Great Eastern Management keeps detailed records of all of your CDs purchases so if you have any questions or problems with the paperwork on your CD we will contact the bank on your behalf. Prior to all of your maturities we will call you with rollover rates and/or other reinvestment options.