Why CDs has lower returns compared to Treasury instruments?

Discussion in 'Economics' started by Daal, Nov 17, 2005.

  1. Daal


    Since they are so restrict in theory their return should be higher, why that isn't the case?
  2. Right now, I have almost all of my money in 5 year CD's because I've been getting better rates than the FNX. Also the risk is much lower.

    The advantage for treasuries is that they are exempt from state taxes. Lately I've noticed the FNX is catching up and it may now have surpassed the 5 year CD but I think that the risk is much higher.

    If I didn't need the income, I would be shorting treasuries.

    I also have a 10 year CD because of the low risk.