What might be a savings goal for a person who buys a
five-year CD paying 4.67 percent instead of an 18-month savings certificate
paying 3.29 percent?
person saving for a longer-term goal such as childrens education, retirement,
or purchase of a vacation home may make use of a five-year savings certificate.
A person who will need the funds in less than two years would use an 18-month
savings certificate. Also, if you believe interest rates will be dropping, use
of a long-term certificate will guarantee a higher savings rate over this time