Lower interest rates have spilled over into banks, and one-year CDs paying 1.5% or less are commonplace. This is a huge decline from a year or two ago when comparable CDs were paying more than 3%. As I mentioned in my Retirement Blog, CD rates are marching in an unclear direction, you may be uncertain about how to keep your income at the level you need and still get the security you have with FDIC. Keep these points in mind: your new rate a year from now may be higher or lower, and CD interest is subject to income taxes. Before you renew that CD with the ridiculously low rate, consider another alternative that offers a guaranteed income stream, with safety, AND can leave you with more money.
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