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From: wmartin@brl-tgr.ARPA (Will Martin )
Newsgroups: net.invest
Subject: Re: CD Advice
Message-ID: <1718@brl-tgr.ARPA>
Date: Wed, 25-Sep-85 15:19:32 EDT
Article-I.D.: brl-tgr.1718
Posted: Wed Sep 25 15:19:32 1985
Date-Received: Tue, 1-Oct-85 07:09:01 EDT
References: <10454@ucbvax.ARPA>
Reply-To: wmartin@brl-bmd.UUCP
Organization: USAMC ALMSA, St. Louis, MO
Lines: 27

I, too, recently had a CD mature (happened to be an IRA CD, but that
really doesn't make any difference). It is insulting what low rates are
available these days, if you consider what the banks and S&L's are still
*charging* people who are borrowing money! Guess it's time for my
perennial net.invest question:

Where can I get an investment vehicle that has the safety and
convenience of a bank CD (I really do want to be able to forget about it
-- I don't want to follow markets and make decisions), but that will PAY
the prime rate as its interest return?

Considering the spread between what most borrowers have to pay for money
and the "official" prime rate, there is *plenty* of room for a bank or
investment organization to pay "prime" as their dividend on incoming
funds while charging regular market rates for loaned money, or getting
the far-higher-than-prime returns that certain specific investments will
provide. They can make their overhead and profit out of that spread.

Even if that spread is only a few percent, if the amount is large
enough that few percent can add up to quite a hefty chunk of money,
quite enough to pay the managers and staff, plus overhead. Also, I keep
reading that supermarkets operate on a 1% or 2% margin, and they
certainly make enough money to keep going...

Will Martin

UUCP/USENET: seismo!brl-bmd!wmartin   or   ARPA/MILNET: wmartin@almsa-1.ARPA