Historical Cd Rates
When looking at historical Cd rates, it is apparent that some trends have remained constant. Generally, institutions that offer certificate of deposits grant higher rates of interests on their Cds that customers deposit money for the agree-on term than those on the Cds in which customers can withdraw the money on demand. For instance, while 2004 most of the beloved banks in the world had offered 0.4% each year rate of interest on rescue catalogue deposits which are payable on demand, 0.8% on a 3-month Cd and 2% on a 2-year Cd.
Historical Cd Rates
When studying historical Cd rates, the trend indicates that over the last 30 years the rates of interest were ranging in between 2-16% annually. while 1979, the mean rate of interest on Cds was 11.44% worldwide. This was the rate before considering tax rate and inflation rate. while the same period, those rates were 66% and 13% respectively, which in turn left the net rate of interest of Cd as 9.41%.
In 1981, the Cd rate was almost 16% and in which year the tax rate and inflation rate were 66% and 9%. All of these factors have kept the net rate of return on Cd as 3.5%. while the year 1986, the gross rate of interest was only 6.6%. However the tax rate and inflation rate were comparatively low which were only 52% and 1.1% respectively. Therefore there would not be more deductions from rate of return on Cds resulting in the net rate as 2.02%.
Whatever the former rates may be, one can say that billions of dollars have been invested in Cds while the 20th and 21 centuries. When deciding on either to invest in a Cd or to go for other sources of investment, Investors need to take their goals and the rate of return into account.
No comments:
Post a Comment