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Aruba, October 29, 2018 - Interest rates on two-year certificates of deposit have just cracked 3%

Yes - cash is back.

Once again people who don't want to take on the risks of the stock market or the bond market or the gold market or any other market - and just want a reasonable rate of return on their savings without having to worry - are starting to feel some love.

Interest rates on two-year certificates of deposit or CDs - not quite "cash"€ but pretty close - have just cracked 3% for the first time since living memory. And rates on parallel two-year Treasury bonds are not far behind. Just a couple of years ago they were offering barely half a percent - and this minuscule rate of interest, of course, was fully taxable too.

These rates are already well ahead of the 2.2% overnight Federal Funds rate set by the Federal Reserve, as financial markets have already anticipated further rate hikes by the Fed, expected later this year and in 2019.

The surge in rates for deposits comes at a time when stocks and bonds are both suddenly looking distinctly rocky. And for the first time in quite a while, those buying CDs can beat inflation, which has averaged about 2.5% this year.

One woman's trash is another woman's treasure, so while Wall Street speculators freak out at the prospect of rising interest rates, and President Trump complains that the Federal Reserve is going "crazy" by putting rates back up, let's not forget all for those whom rising interest rates are a matter of enormous relief. That means, above all, retirees, and those near retirement, as well as all those who are willing to accept lower returns for a lot less risk.

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