Okay, my understanding of a CD is that you put your money in for a fixed amount of time, and they give you a higher rate of interest than you would get out of a regular savings account. My main question is, can you withdraw the interest, or is it stuck in the account with the money you started with? Here's a situation, around 4.5 million USD. But I'm thinking that it would be possible for the interest to make a livable income. What's the best choice for this kind of situation? I'd need some sort of account to draw on the interest. Perhaps something besides a CD or a savings account would work out better? I'm looking for the safest option.|||Edited answer:
Did not read the part about 4.5 million USD
Call a broker like Charles Schwab, Fidelity Investments, TD Ameritrade
They all sell long term cd's.
A broker, in just 5 minutes can ladder all these cd's for you at no cost
They can set it up so the money gets transferred once a month to your checking
(essentially, you wave a wand and they can do whatever you want them to do)
Currently you can buy 15 year cd's yielding around 3% interest
Some pay out monthly, quarterly, or yearly.
The money goes right into the account as cash at specific times.
Careful - this is the bond market (not like bank cd's)
It becomes tricky if you ever want to sell the cd's early - since they sell at market value.
If rates go up, you could lose principal.
So only buy them, if you know you will hold for the term of the cd
Also consider buying 30 year treasuries.
A broker will hold your hand through all this - that is what they are there for
Charles Schwab and Fidelity also sell the lowest cost annuities around.
Ask for the fixed ones tied to cd's. Once a month, you get a check
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