I'll put this in the POTUS Place, as the CD rates might be a reflection on the current political situation.
Beating low CD rates. Setting aside the pros and cons of CD's, I have considered the following:
2 year CD is 2.0%
10 year CD is 3.5%
Putting 25k into a 10 year CD at 3.5%. Taking it out in two years and paying the penalty and reinvesting at a possible higher rate 1 or 2 year CD.
The 2 year CD would earn $1,500
The 10 year, if withdrawn at 2 years, would earn $ 2625,less a $437 penalty or $2187.
This is almost $600 more for the two year period.
Seems the only way I could get hurt is if the rates two years out are less than today.
Is my thinking correct here? Am I missing something?