Finally, somebody tells it like it is: longer-term certificates of deposit are bad investments because they make savers "lose out to inflation." Elizabeth Ody, from Bloomberg News, arrived at this conclusion after combing through the latest report from Market Rates Insight.
Many purchase CDs to lock in a fixed return that is also FDIC insured. Unfortunately, you also are insured that your investment will not keep up with inflation - the rising cost of living – in effect, providing a negative true return.
Elizabeth went on to say that inflation "was 2.11 percent in February, surpassing the long-term CD rate of 2.10 percent for the first time since October 2008". Read Elizabeth's full article here.Print This Post