Merrill Lynch/Merrill Edge CD vs Tbills
Ms. Savage: I watch you on channel 9 and I am always impressed so before I invest I would appreciate your opinion. Merrill Edge inside Bank of America is offering me a CD which I can take for 6 months or a year at 2% interest. They are saying it is FDIC insured. Is this a good investment. Thank-you
Terry Says
Well, it's an OK rate for 6 months -- but not for longer. Especially now that rates are clearly rising. If you would go to TreasuryDirect.gov you can likely get a 6-month Treasury bill for a bit over 2 percent, and you won't owe state income tax on the interest. If it's a small amount of money you can do the CD. But for larger amounts and if you live in a high tax state and are in a high tax bracket, T-bills clearly have the edge!
