I enjoyed Tuesday’s article about students managing money. However, the author badly mischaracterized certificates of deposit.
Certificates of deposits are lousy for college students. Instead of giving “high returns,” they compare poorly to many mainstream investments. Also, they often lock up the funds for months or years.
A money market account generally serves students much better. Bankrate.com shows several money market accounts with no minimums, insurance (FDIC or otherwise), and rates above 5%, a total package that beats the tar out of typical CDs.
CDs are an ultraconservative investment mainly appropriate for retirees who need immediate income security. College students have better choices.
Aren Cambre
Graduate Student, Engineering Management
