Aside from the peace-of-mind provided by the predictable interest payments and return of capital provided by fixed term investments, it also makes budgeting a lot simpler - although my parents are loath to prepare a budget and tend to just put everything on their credit card and get a rude shock every month when the bill arrives.
I told my dad about the Citibank TD but he has already invested their liquid funds (around $400,000) in a 7 month TD with their credit union at 7.00%. I have suggested that he 'ladders' his TD investments so he has some investment maturing every month, rather the investing the entire lump sum at one time (especially if he invests in a five year TD). It will be interesting to see what rates are available in 4-5 months when he needs to rollover his current investment. When I first drafted this post a couple of weeks ago Citibank was offering a 12-month TD for $10,000 minimum at 7.15%. That offer appears to have been replaced by the five year TD, and with a 6-month TD only offering 6.35% pa.
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