IF ONLlNE SAVINGS ACCOUNTS HAVE HIGHER RATES AND APYs WHY INVEST MONEY INTO CDs... ?????

Question

your money wouldnt be locked up and you will earn more interest... and its FDIC insured

i've seen online savings accounts offer over 3.5 APYs

so what would make one choose a CD over an online savings account... and lock up their money and take a lower APY???

also you must have a certain amount to open a CD... theres no minimum balance or maintenance fees for the online savings account

im new to finance and thinking of opening an online savings account... im just wondering why if there is some hidden catch... b/c let me repeat myself once more... THE APY IS HIGHER THAT A TWO YEAR CD!!!

sounds too good to be true

Answer 1

The bank is under no obligation to keep the rate at that level.  With a CD they must.  Just depends on your needs.

Answer 2

because the rate in an online savings account can change overnight without notice.

Answer 3

it is called an inverse yield curve..........................it is not a good sign for the economy...

aside from that.fdic.is fdic...............get the one with the highest rate.and read a couple of books on interest rates and investing,it will pay dividends long term..............