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Stock Strategist

Is Your Money Smarter 'In' or 'On' the Bank?

Between bank CDs and bank stock, we discuss which is the better bet.

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Is it better to put your money in the bank--or bet on the bank? Investors face this dilemma when weighing the choice between bank certificates of deposit and shares of a given bank's stock. In the discussion below, we explain why the decision boils down to how quickly an investor needs to access the funds. That is, there is no one-size-fits-all solution.

When to Buy CDs
We always emphasize that investors need to think long-term. However, investors also need to be willing to commit money for the long term. If an investor expects to need the money he is looking to invest within a short period, then putting money in the bank makes more sense.

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Jaime Peters does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.