How long will someone usually be expected to leave their money in a certificate of deposit account?

Question

Is it as long or longer than it is required to leave it in a mutual fund?

Answer 1

There is no length of time an investor is required to leave money in a mutual fund, with one or two very rare exceptions.

There are mutual funds where you pay a fee if you sell within 1 year or 18 months, but you are not required to leave the money invested; you simply pay a fee to leave.

A Certificate of Deposit (CD), on the other hand, is purchased for a specific period of time, generally in 3-month increments.  You buy a CD for 3 months, 6 months, 1 year, 2 years, etc.  You are expected to leave your money in the CD for the term of the CD.  

There are ways to remove it earlier:  generally you are charged the interest you've earned, or a penalty, or the institution sells the CD for what the market will bring.

Good luck.

Answer 2

CDs and savings account are actually a fraud played by finance industry by banks and financial institutions.

You can find the best current CD/savings acct rate but it will lag 2+ percentage points behind total inflation rate including food and energy.

For example currently you will get maximum 4% rate on a 6 months CD whereas real rate of inflation is more than 5%.

Buy TIPS(US government Treasury Inflation Security bonds) or Vanguard Inflation-Protected Securities Fund Investor Shares (VIPSX) which tracks inflation very well.