Your money matters: Weekend report: Yield-hungry CD investors seek alternatives
For millions of investors with certificates of deposit maturing this month, the thought of stashing their money in the proverbial mattress may not seem entirely ludicrous. CD yields are at all-time lows, and with stocks and bonds trading near all-time highs, the alternatives can seem pretty risky.</br></br>The average yield on six-month CDs, among the most popular with individual investors, is just 2.81%, about par with the inflation rate. Once taxes are taken out, the return is a negative number. One-year CDs don't look much better with an average yield of 3.08%.</br></br>Nobody is predicting a turnaround any time soon. "Rates are still eroding, not as much as in the last few years, but still eroding," says Robert K. Heady, publisher of Bank Rate Monitor, a North Palm Beach, Fla., newsletter.</br></br>October and April are the two biggest months for CD rollovers. CDs were deregulated in October 1982, and a flood of cash coming out of the stock market after the October 1987 crash went into CDs. Tax deadlines in April make it a natural time for investment decisions.</br></br>Some people in the industry estimate that as much as $100 billion of CDs will come due this month. Typically, most of the money in maturing CDs is rolled over into new certificates of similar maturity.