‘Your Wallet’: CDs as an investment are becoming more popular

LINCOLN, Neb. (KLKN) – The stock market has been hard to watch lately; 2002 was its worst year in 15 years.

And we’ve been hit hard by rising interest rates and inflation. But there are some ways to make money with your investments.

Mark Navratil of Lincoln is 61 years old and retired. He’ll be the first to tell you, completely relying on Wall Street to make money at this point in his life is too risky.

That’s why he’s looking into other investments, like certificates of deposit, also known as CDs.

“I have some money on the sideline right now, so is this a good time to put it in the market or maybe CDs?” he said. “I don’t need the money right now. So, to me, CDs are a good idea. That’s where I’m looking to put some money towards.”

And Navratil is not alone. In today’s volatile financial world, it’s not a bad thing to consider.

Interest rates have gone up nine times in the past year, from a quarter of a percent to about 5%, which is the highest since 2006.

That’s bad news if you’re borrowing money for a mortgage or personal loan or paying off credit card debt.

But as those rates went up, so did the return on CDs.

“For years, I’ve had people ask, ‘Is there anything I can do? I’m making 37 cents a month in my savings account,'” said Tim Kulhanek with Stonebridge Wealth Management. “Now it’s a totally different paradigm. You’d have to go back to the 1980s to have something comparable to what we’re seeing right now with increases in interest rates.”

Kulhanek says that’s big, especially for older investors.

For example, putting $10,000 in a two-year CD at 1% would get you $200. At 5%? It’s $1,000.

Besides CDs, he says there are other safe routes to invest your money in right now.

Kulhanek said fixed annuities have interest rates that are very comparable to CDs, and even higher in some cases.

“Bonds are also an option, but there’s a risk,” he said. “If interest rates keep going up, bond values can go down. Last year was the worst year for bonds in general, but the yields are higher.”

For Navratil, putting some of his money in something he knows will get a decent return means peace of mind.

“It’s guaranteed and safe,” he said. “I’ve been hearing a lot about banks (failing). I don’t think that’s an issue here in Nebraska, but I do feel being safe and secure with an investment is worth looking into.”

The key, of course, is to do a little research and see what’s right for you, whether you’re 25 or 65. And you can always team up with a financial adviser to pick the best options.

Editor’s note: This report is the first in a weekly series Channel 8 is airing, called “Your Wallet.”  We’ll be looking into any topics that deal with your money. The reports air every Monday during the Channel 8 News at 6 p.m.