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How many CD accounts should I have? What experts say
It’s no secret that current returns on certificates of deposit (CDs) are impressive. Some competitive CDs pay 5% or higher APYs on your savings. But, if you’ve researched opening one, you may have decided that just one isn’t the right number for you.
CDs come with a wide range of terms. There are short-term options like those that require a 6-month or 1-year commitment. Then, there are long-term options with terms like 2-years, 3-years, 5-years and even longer. And, you may need to open several CD accounts if you practice a strategy like laddering. We asked several experts for their thoughts on the right amount of CDs to open. Below, we’ll break down what they said to consider now.
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How many CD accounts should I have? What experts say
With so many different CDs available, and various investing strategies to choose from, it’s often difficult to determine how many accounts you should open. “At the risk of sounding too predictable, the answer is, it depends,” says Nick Covyeau, owner and financial planner at Swell Financial, a financial planning firm. Here’s what to account for:
Consider what you have the money earmarked for
“Let’s assume for a second that we have what we need in savings and nothing more,” says John Mason, CFP, President of the financial planning firm, Mason & Associates. “And, let’s say that’s $50,000.” Mason suggests splitting that $50,000 into two accounts, but investing in only one CD. “I’m a fan of $25,000 in savings and $25,000 in a CD.”
But, if you’re saving for a planned expense over the next one to three years, Mason says multiple CDs may be fitting. “Let’s say I need to keep an extra $200,000 in cash for whatever reason. In that instance, I will typically break those up into at least two CDs.” He says doing so “gives you the flexibility that if you have to break one CD for whatever reason, you’re not breaking all of your CDs.”
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Think about safety
One reason to save with a CD is because they’re typically safe savings vehicles. But, that safety dwindles when you deposit too much into one account. “Federally insured banks and credit unions only [usually] insure up to $250,000 per depositor at each bank or credit union,” explains Jim White, CFP, president at the financial planning firm, Great Oak Wealth Management.
And, it’s important to consider your balances in all accounts at each financial institution. “If you have multiple accounts, such as checking, savings, etc., add all of those accounts up,” says White. “Any amount above $2250,000 will be at risk for loss if there is an issue with the bank or credit union.”
But, you can alleviate this risk by having multiple CDs. “You can easily overcome this risk by opening accounts at multiple financial institutions,” explains White.
Your CD strategy
Your strategy should also be considered when choosing how many CDs you’ll open. For example, if you follow a CD ladder strategy, it will involve the use of several CDs.
“I personally prefer owning more than one CD and implementing what is called a ‘ladder’ strategy,'” says Covyeau. “This involves purchasing several CDs with staggered maturities to take advantage and lock in higher interest rates both today and in the future.”
Other considerations
Some of the experts we spoke with say that if you’re focusing on the number of CD accounts you should have, you’re focusing on the wrong thing. “The number of accounts is not important,” argues Noah Damsky, CFA, principal at the financial planning firm, Marina Wealth Advisors. “There’s no right number of CD accounts like there’s no right number of checking, savings or brokerage accounts. What is most important is structuring the CD so that you have the right amount invested and for the right amount of time,” says Damsky.
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The bottom line
There’s no standardized number of CDs that’s perfect for everyone. When you choose how many CDs you should open, consider what you’re saving money for, insurance limits and your savings strategy. And, some experts say you shouldn’t focus on the number of CDs you open. Instead, they say you should think about your savings goals and ensure your CD investments will help you achieve them. Compare today’s leading CDs now.
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New discoveries could rewrite the history of early Americans — and the 4-ton sloths they lived with
Sloths weren’t always slow-moving, furry tree-dwellers. Their prehistoric ancestors were huge – up to 4 tons – and when startled, they brandished immense claws.
For a long time, scientists believed the first humans to arrive in the Americas soon killed off these giant ground sloths through hunting, along with many other massive animals like mastodons, saber-toothed cats and dire wolves that once roamed North and South America.
But new research from several sites is starting to suggest that people came to the Americas earlier – perhaps far earlier – than once thought. These findings hint at a remarkably different life for these early Americans, one in which they may have spent millennia sharing prehistoric savannas and wetlands with enormous beasts.
“There was this idea that humans arrived and killed everything off very quickly – what’s called ‘Pleistocene overkill,'” said Daniel Odess, an archaeologist at White Sands National Park in New Mexico. But new discoveries suggest that “humans were existing alongside these animals for at least 10,000 years, without making them go extinct.”
Some of the most tantalizing clues come from an archaeological site in central Brazil, called Santa Elina, where bones of giant ground sloths show signs of being manipulated by humans. Sloths like these once lived from Alaska to Argentina, and some species had bony structures on their backs, called osteoderms – a bit like the plates of modern armadillos – that may have been used to make decorations.
In a lab at the University of Sao Paulo, researcher Mírian Pacheco holds in her palm a round, penny-sized sloth fossil. She notes that its surface is surprisingly smooth, the edges appear to have been deliberately polished, and there’s a tiny hole near one edge.
“We believe it was intentionally altered and used by ancient people as jewelry or adornment,” she said. Three similar “pendant” fossils are visibly different from unworked osteoderms on a table – those are rough-surfaced and without any holes.
These artifacts from Santa Elina are roughly 27,000 years old – more than 10,000 years before scientists once thought that humans arrived in the Americas.
Originally researchers wondered if the craftsmen were working on already old fossils. But Pacheco’s research strongly suggests that ancient people were carving “fresh bones” shortly after the animals died.
Her findings, together with other recent discoveries, could help rewrite the tale of when humans first arrived in the Americas – and the effect they had on the environment they found.
“There’s still a big debate,” Pacheco said.
“Really compelling evidence”
Scientists know that the first humans emerged in Africa, then moved into Europe and Asia-Pacific, before finally making their way to the last continental frontier, the Americas. But questions remain about the final chapter of the human origins story.
Pacheco was taught in high school the theory that most archaeologists held throughout the 20th century. “What I learned in school was that Clovis was first,” she said.
Clovis is a site in New Mexico, where archaeologists in the 1920s and 1930s found distinctive projectile points and other artifacts dated to between 11,000 and 13,000 years ago.
This date happens to coincide with the end of the last Ice Age, a time when an ice-free corridor likely emerged in North America – giving rise to an idea about how early humans moved into the continent after crossing the Bering land bridge from Asia.
And because the fossil record shows the widespread decline of American megafauna starting around the same time – with North America losing 70% of its large mammals, and South America losing more than 80% – many researchers surmised that humans’ arrival led to mass extinctions.
“It was a nice story for a while, when all the timing lined up,” said paleoanthropologist Briana Pobiner at the Smithsonian Institution’s Human Origins Program. “But it doesn’t really work so well anymore.”
In the past 30 years, new research methods – including ancient DNA analysis and new laboratory techniques – coupled with the examination of additional archaeological sites and inclusion of more diverse scholars across the Americas, have upended the old narrative and raised new questions, especially about timing.
“Anything older than about 15,000 years still draws intense scrutiny,” said Richard Fariña, a paleontologist at the University of the Republic in Montevideo, Uruguay. “But really compelling evidence from more and more older sites keeps coming to light.”
In Sao Paulo and at the Federal University of Sao Carlos, Pacheco studies the chemical changes that occur when a bone becomes a fossil. This allows her team to analyze when the sloth osteoderms were likely modified.
“We found that the osteoderms were carved before the fossilization process” in “fresh bones” – meaning anywhere from a few days to a few years after the sloths died, but not thousands of years later.
Her team also tested and ruled out several natural processes, like erosion and animal gnawing. The research was published last year in the journal Proceedings of the Royal Society B.
One of her collaborators, paleontologist Thaís Pansani, recently based at the Smithsonian Institution, is analyzing whether similar-aged sloth bones found at Santa Elina were charred by human-made fires, which burn at different temperatures than natural wildfires.
Her preliminary results suggest that the fresh sloth bones were present at human campsites – whether burned deliberately in cooking, or simply nearby, isn’t clear. She is also testing and ruling out other possible causes for the black markings, such as natural chemical discoloration.
“A giant ground sloth”
The first site widely accepted as older than Clovis was in Monte Verde, Chile.
Buried beneath a peat bog, researchers discovered 14,500-year-old stone tools, pieces of preserved animal hides, and various edible and medicinal plants.
“Monte Verde was a shock. You’re here at the end of the world, with all this organic stuff preserved,” said Vanderbilt University archaeologist Tom Dillehay, a longtime researcher at Monte Verde.
Other archaeological sites suggest even earlier dates for human presence in the Americas.
Among the oldest sites is Arroyo del Vizcaíno in Uruguay, where researchers are studying apparent human-made “cut marks” on animal bones dated to around 30,000 years ago.
At New Mexico’s White Sands, researchers have uncovered human footprints dated to between 21,000 and 23,000 years ago, as well as similar-aged tracks of giant mammals. But some archaeologists say it’s hard to imagine that humans would repeatedly traverse a site and leave no stone tools.
“They’ve made a strong case, but there are still some things about that site that puzzle me,” said David Meltzer, an archaeologist at Southern Methodist University. “Why would people leave footprints over a long period of time, but never any artifacts?”
Odess at White Sands said that he expects and welcomes such challenges. “We didn’t set out to find the oldest anything – we’ve really just followed the evidence where it leads,” he said.
While the exact timing of humans’ arrival in the Americas remains contested – and may never be known – it seems clear that if the first people arrived earlier than once thought, they didn’t immediately decimate the giant beasts they encountered.
And the White Sands footprints preserve a few moments of their early interactions.
As Odess interprets them, one set of tracks shows “a giant ground sloth going along on four feet” when it encounters the footprints of a small human who’s recently dashed by. The huge animal “stops and rears up on hind legs, shuffles around, then heads off in a different direction.”
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