You can maximize the earning power of CDs by opening different certificates at
varying maturity dates.
The bond is repackaged into a number of zero - coupon or strip securities with
varying maturity dates.
You open CDs with
varying maturity dates.
And they should have
varying maturity dates, from short - term to mid-term, so you always have some bonds maturing and providing you with either income or money to reinvest.
To do it, you divide the amount of money you want to have in CDs, and invest smaller amounts into different CDs with
varied maturity dates.
Not exact matches
Relative yields — which may be discussed in terms of «spread» or difference in yield between a given bond and a «riskless» U.S. Treasury security with comparable
maturity —
vary with the type of bond,
maturity date, the issuer and the economic cycle.
Bonds can
vary according to: * their
maturity dates (e.g. short term vs long term bonds) * their level of risk (e.g. junk bonds, anyone?)
However, the mix of mutual fund holdings
varies based on the target
maturity date.