By allowing ads to appear on this site, you support the local businesses who, in turn, support great journalism.
Invest beyond short-term CDs
Save money
Placeholder Image

Many people depend on certificates of deposit (CDs) to provide extra income, yet CD rates have been fairly low for a while. In recent months, in fact, one-year CDs were paying about 0.5 percent, two-year CDs topped out at around 1 percent and five-year CDs paid between 2 percent and 2.3 percent. Those rates are scanty enough, but they can seem even lower in an economic environment marked by rising food and gas prices.
Before you consider alternatives, keep in mind that CDs still offer a key advantage:  safety of principal. The Federal Deposit Insurance Corporation (FDIC) typically insures CDs up to $250,000. Because CDs are relatively short-term in nature, you don’t have to worry about locking away that money for long periods of time. Therefore, there can be a place for CDs in the fixed-income portion of your portfolio.
However, during times such as these, you might consider looking at additional options, keeping in mind that when seeking greater income, you’ll likely be taking on more risk. Let’s consider a few alternatives:
• Fixed annuities — Many people buy fixed annuities to supplement their retirement income, but most annuities also allow you to take up to 10 percent of your account value each year without penalty. Plus, the interest rate you receive on a fixed annuity may be more competitive than that currently paid by a CD.
Keep in mind, though, that annuities are not backed by FDIC insurance, and any guarantees are backed solely by the paying ability of the insurance company. Additionally, early or excessive withdrawals may be subject to penalties. If you believe a fixed annuity might be appropriate for your situation, speak with your financial advisor.
• Bond ladders — If appropriate for your situation, you potentially can gain extra income through a strategy known as a bond ladder. To build a ladder, you buy several bonds with varying maturities — short-, intermediate- and long-term.
Once you’ve constructed your ladder, you could gain some advantage in various interest-rate environments. When market rates are low, you’ll still have your longer-term bonds earning higher interest rates. When market rates rise, you can reinvest your maturing short-term bonds at the higher rates.
However, if you need income in addition to your regular interest payments, you can get it from the maturing bonds. Unlike CDs, however, bonds are not covered by FDIC insurance and are subject to credit risks.
Bonds also are subject to interest-rate risk: When interest rates rise, bond prices generally fall, and you may lose some or all of your principal if you sell your bond prior to maturity. But by holding your bonds until maturity, you can avoid loss of principal, assuming the issuer doesn’t default.
• Dividend-paying stocks — Some companies have paid — and increased — their stock dividends for many years now. If you don’t need the dividends to boost your cash flow, you can reinvest them to help boost your ownership stake.
However, companies can reduce or discontinue their dividends at any time, and because stock prices fluctuate, you risk losing some or all of your principal.
By exploring alternatives to short-term CDs, you may find other appropriate investments that may better position you to reach your financial goals, so look around to see what’s available in the financial marketplace.

This column was written by Edward Jones, which Cardella represents in Hinesville.

Sign up for our e-newsletters
GPA grows trade, market share
Intermodal volume up 20 percent
port photo
Rubber tired gantry cranes handle cargo at the Chatham Intermodal Container Transfer Facility at the Port of Savannah. The Georgia Ports Authority's Mason Mega Rail project will double rail lift capacity to 1 million containers per year by 2020 - photo by Provided

The Georgia Ports Authority achieved 14 percent growth in March container volumes, moving 355,208 20-foot equivalent unit (TEU) containers.

From July 2017 to March, TEU container trade grew by 9 percent, or 255,786 additional units for a total of 3.08 million, a new record for Savannah.

"Savannah's continued strength is a reflection of our customers' commitment, Georgia's leadership, and the many dedicated service providers, GPA employees and ILA members who come together every day to achieve great things," said GPA Executive Director Griff Lynch. "March marked our 17th consecutive month of business expansion thanks, in part, to a strong economy and growing market share."

Intermodal rail volumes jumped by 20 percent in March and 15.4 percent for the fiscal year to date, for a total of 318,454 containers handled over nine months – another record for the GPA.

"As the numbers show, our rail cargo is growing at a faster pace than our overall trade," GPA Chairman Jimmy Allgood said. "This is important because rail is playing a key role in our responsible growth strategy. We anticipate our rail infrastructure investments to take 250,000 trucks off the road each year by 2020."

The GPA recently broke ground on its Mason Mega Rail Terminal, on which the Port of Savannah will build 10,000-foot unit trains within its own footprint. From the expanded rail infrastructure at Garden City Terminal, Class I rail providers CSX and Norfolk Southern will provide direct rail service to major Southeast and Midwestern markets from Memphis to St. Louis, Chicago to Cincinnati.

An added benefit is that the Mason Mega Rail project will move all rail switching on terminal – improving vehicle traffic flow around the port.

In August, the GPA will open its Appalachian Regional Port in Murray County. Located in an industrial belt, including the production and export of carpet and flooring, automobiles and tires, the ARP will provide an alternative to all-truck transit to Northwest Georgia.

Each round-trip container moved via the Appalachian Regional Port will offset 710 truck miles on Georgia highways.

March was also a strong month for roll-on/roll-off auto and machinery units at the Port of Brunswick and Ocean Terminal in Savannah. Colonel's Island Terminal in Brunswick handled 66,144 cars, trucks and tractors, while Ocean Terminal added 4,050, for a total 70,194, a 17.2 percent increase.

"The global economy is thriving and our volumes are following suit," Lynch said. "As existing accounts grow their footprint in the expanding auto facility in Brunswick, Georgia's competitive logistical advantages are drawing additional business across all of our docks."

Lynch noted that for the fiscal year to date, Mayor's Point breakbulk terminal in Brunswick grew by 44 percent (34,515 tons) to reach 112,728 tons of forest products. At East River Terminal, bulk cargo expanded by 34 percent July-March (189,918 tons) for a total of 750,384 tons.

Latest Obituaries