CD interest rates are very low right now but take a look at what US Treasury notes are paying. The chart below shows that you will get less than a half percent for a 12 month note and ONLY 3.58% for 30 years! Are you kidding me? Who is crazy enough to loan the government money for 30 years at 3.58%?

This is an unreal situation that puts anyone with money in a real quandry. US Treasurys have for years been the one place you could put big chunks of money and not worry about it. With bank CD's you always had the $100,000 cap at being guaranteed through FDIC and so if you had a lot more than that you had to put your money in CD's in multiple banks. Having money in many banks is a real hassle and by buying US Treasuries it was easy to not have to do that.

Now that the interest rates for US Treasuries are practically nothing, what do people do? I know I would not loan the US government money at those low rates just out of principle alone and there is no amount of finance advice that would ever persuade me to. There is no way I would give my money to Uncle Sam for a half a percent for a year. That is pretty much the same as loaning them money at no interest as far as I am concerned. The best CD rates you can find are still better than that and so now is the time to start looking I guess.

This again impresses upon you how damaging this recession is to older retired people who count on their interest income for their retirement. Anyone with any money to invest now is faced with getting almost zero return. Additionally, if you do have enough to make any money, Obama will surely be raising the interest income tax rates. Why even bother investing anymore?

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