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726372816482 t1_j2dvppn wrote

Reply to comment by jammun14 in What to do with emergency fund? by jammun14

Generally CDs have very minor penalties for withdrawing early such as reversing the last 2 or 3 months interest they pay out. IBonds are fairly similar as well. Just wanted to point that out, good luck!

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ku91fanatic t1_j2e4kfn wrote

One further point to this is that there are brokered CD's that offer full liquidity and higher rates. Brokered CD's function the same (guaranteed rate, FDIC insured, etc) but there is a market for them to be sold if you need your cash back. There is interest rate risk (as rates go up, the underlying value will go down. But if you hold to maturity then you receive a full return of your principal) but with short durations, the impact is negligible.

I am seeing 3-month CD rates north of 4% and the 1 & 2 year CDs are at ~4.65%.

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