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<p>[QUOTE=&quot;GeorgeM, post: 1250805, member: 28550&quot;]One thing about CDs - most of the time, the penalty for early withdrawal is expressed in terms of &quot;months of interest&quot;. So, if rates go up significantly, it&#039;s well worth it to take the hit and reinvest.</p><p><br /></p><p>For instance, an average CD rate right now is around 0.75% (annualized rate), and an average penalty is &quot;3 months of interest&quot;. So, let&#039;s say you have a 24 month CD... and 6 months from now the interest rate goes from 0.75% to 4%. Would you be better off leaving it at 0.75% and not paying the penalty, or would you be better of switching the rate and swallowing 6 months of only earning 0.37% interest (or whatever the annualized rate would be depending on the compounding)? </p><p><br /></p><p>On a thousand dollar CD, you&#039;d only be paying less than $6 to switch from 0.75% to 4%.[/QUOTE]</p><p><br /></p>

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