Hello everyone, today we are going to talk about a seemingly simple mistake that many people actually make - that is, the amount on the certificate of deposit. What's so hard about this, you may ask?Isn't it my freedom to save as much as I want?However, based on my observation and experience, I have found that many people are "unlucky" in this issue.
Many people like to put large sums of money into fixed deposits, believing that it is both safe and stable income. But in reality, if the amount of fixed deposit is too high, it can bring a series of problems. Liquidity issues. Fixed deposits generally have a fixed term, and if you need to withdraw them early during the term, you will usually lose a portion of the interest. If you put too much money into a fixed deposit and can't withdraw it in time when you need it urgently, it can create an inflation risk. While the interest rate on fixed deposits is usually higher than that on demand deposits, real purchasing power may decrease if inflation is too high. In other words, you may not be getting interest, but your purchasing power may not be increasing.
There is no one set answer to this question, as everyone's financial situation, investment goals, and risk tolerance are different. But in general, I recommend that you decide according to your actual situation. You need to consider your cash flow. If you have a steady income and a fixed balance each month, consider putting some of your money into a fixed deposit. But remember, don't put all your balance into a fixed deposit, leaving a portion as a demand deposit or for other investments. You need to consider your investment goals. If you're looking to preserve and grow your assets over the long term, a fixed deposit may not be the best option. Because while it has a lower risk, it also has a relatively low yield. You may need to consider other ways to invest, such as **, etc. Of course, these investment methods are also relatively risky, so you need to have a certain risk tolerance.
The first thing you need to do to avoid being "hit" on the amount on your CDs is to understand your financial situation and investment goals. Only when you know exactly what you want can you make an informed decision. Diversify your portfolio. Don't put all your eggs in one basket, it's a basic investment principle. In addition to fixed deposits, you can also consider other investment methods, such as bonds,** etc. This will not only increase your yield, but also diversify your risk. Review your portfolio regularly. The market is constantly changing, and your financial situation and investment goals may change over time. Therefore, you need to review your portfolio regularly to see if adjustments are needed.
How much is it best not to exceed a fixed deposit certificate?There is no one set answer to this question. Because everyone's financial situation, investment goals, and risk tolerance are different. But in general, you need to decide according to your actual situation. Remember not to put all your eggs in one basket, diversify your portfolio, and review your portfolio regularly so you can avoid "getting hit".