Just remember that if you decide to go with something like this, you actually end up loosing "wealth" or "purchasing power" year to year once you account for inflation at a rate of 3-3.5% annually. Not the easiest thing to explain, but let me try:
Say you have $100,000, and a can of soda costs $1.000. Today, you'd be able to buy 100,000 cans of soda. Now if you invested that money into a CD at 2.25% annually for one year, and came back a year later, you'd then have $102,250. If you account for inflation at 3.5% annually, that $1.00 soda now costs you $1.035. So at one year later, you are only able to buy 98,792 sodas. So even though you have more money, you actually have less wealth and purchasing power.
This is why I always strongly advise people I converse with to seek other investment opportunities vs these pathetically low ROI's like 2.25% bonds/ CDs. Of course at the end of the day, the CD is a better investment than just letting your money sit in a bank. If you did that, at the end of the year you'd only be able to buy 97,087 soda.
Now if you took that $100,000 and invested in something at 8-10% range, you would end the following year with $110,000 and be able to buy 106,796 sodas. There are a lot of opportunities like this out there, you just have to seek them out and try to find them. And if we ever hit a point where we get into a hyper inflationary period, and having a government backed CD, where the government will actually need to pay you back, it will cause endless headaches and procedures to actually get your money back, and at the end of the day you'll just get more printed worthless fiat money from the government anyways. The FDIC only insures people for $250,000. If SHTF and all the big banks went under, how do you expect the government to actually pay back 93% of Americans who have some type of holdings in these large banks? It's kind of an unrealistic expectation to hold the FDIC/ government responsible for this. In the end I think they would end up having to print more money to pay everyone back, just devaluing the dollar even more.
We are entering into a very new era here in modern history with extremely low interest rates, with the possibility of zero/ negative interest rates in the near future. While I can see the argument for negative interest rates, I think the harm would exceed the good drastically. Huge bubbles, riots, increased crime, money moving offshore, bank withdraw limits for your own cash, etc. Its going to be interesting to see how Denmark, Switzerland, and Japan economies look after 5/10 years of implying negative interest rates.
Just my 2c. Take it as you will.
I don't even know how much I have now.
