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Where can you find bank interest over the 1.1% ally is offering? Even if you did CD ladders,the last 15 years or so have had interest offerings of < 5%, mostly
by sophacles 11y ago
Where can you find bank interest over the 1.1% ally is offering? Even if you did CD ladders,the last 15 years or so have had interest offerings of < 5%, mostly < 4% on 5 year CDs.
- JoeAltmaier 11y agoI'm older than 15
- sophacles 11y agoI'm not saying you aren't - I'm saying that assuming a 7% apr for the last 15 years from banks is not a good one - a savings accounts and CDs just don't pay out that high. Even if you got some big gains early (80s and early 90s) - the very low compounding rate since 2000 will squash those bank returns.
- JoeAltmaier 11y agoNot quite true. Early money dwarfs later money in any calculation. But the last 15 years would certainly put a damper on things. Would be nice if the app calculated real interest return for us!
- sophacles 11y agoBecause I was curious, I looked up historical cd rates and got this: http://www.forecast-chart.com/rate-cd-interest.html http://www.forecast-chart.com/rate-cd-interest.html So i did this: https://gist.github.com/sophacles/a4469f5c656e09e4bc1d https://gist.github.com/sophacles/a4469f5c656e09e4bc1d (Note from the end of the chart linked til this month, I assumed the same interest rate). And found that investing the once a month in a 6 month cd, with a dollar amount equal to the number of days in that month, plus reinvesting the amount coming due (principle + interest) that month from previous CDs, would yeild way less than the market according to this calculator: In the CD case - just under $90K In the stock case - just under $560K If my math turns out to be incorrectly done - please let me know I like to learn, but I think I did this right.