"CDs certainly offer more safety and predictable returns, but they lock up money for fixed terms and early withdrawal penalties. Yields are still much lower than some ETFs that give you a higher yield and upside potential. If you weigh that against the most recent inflation headline, your true yield drops closer to 4% if you open a bank CD today."
"If you keep your money in CDs year after year, the opportunity cost becomes huge as you miss out on the stock market's gains. Moreover, you have the freedom to withdraw your money from dividend ETFs at any moment without any penalties. These higher returns come with higher risks than FDIC-insured CDs, but long-term investors don't have much to worry about, as good dividend ETFs tend to recover eventually."
Certificates of Deposit provide fixed, FDIC-insured returns and greater safety, but they lock funds for set terms and impose early withdrawal penalties. Many dividend-focused ETFs — including iShares Flexible Income Active ETF (BINC), ALPS REIT Dividend Dogs ETF (RDOG), and iShares Preferred and Income Securities ETF (PFF) — offer higher yields and upside potential with immediate liquidity. Inflation can erode CD real yields to roughly 4% today. Holding CDs repeatedly creates opportunity costs by missing stock-market gains. Dividend ETFs carry higher market and credit risks, but diversified funds historically recover over time. BINC uses a multisector, unconstrained fixed‑income approach and holds roughly 4,000 positions.
Read at 24/7 Wall St.
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