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Suze Orman vs. Dave Ramsey: Who Should You Believe About CDs?

When it comes to CDs, does Orman or Ramsey have the winning strategy?

By Chris Adam

Edited by Michael Kurko

Updated Dec. 17, 2024

Certificates of deposit (CDs) are generally considered a safe investment option to build your wealth, and they come with FDIC insurance coverage. They also have guaranteed rates of return.

Financial experts Dave Ramsey and Suze Orman have nearly opposite opinions on CDs. Ramsey is not a big fan because he prefers to maximize growth.

Orman is a fan because of her emphasis on security and risk management. Here’s a look at their views on CDs and if they may be right for you.

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Suitability for long-term investment

Ramsey thinks CDs are too conservative for long-term investing, as they often don’t keep up with inflation, especially when saving for retirement. He recommends growth stock mutual funds for higher returns over time.

Orman agrees that CDs aren’t ideal for long-term growth but are valuable for specific, near-term goals due to their safety and fixed returns. Orman tells consumers to put their money in CDs only when they have funds to keep them safe for a limited time.

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Use for emergency funds

Ramsey recommends saving emergency funds in a regular savings or money market account for easier access. He feels CDs could be more practical due to early withdrawal penalties.

For Orman, she supports using short-term CDs for emergency funds if they offer a higher rate than savings accounts, as long as they are easily accessible or "laddered" for liquidity.

Risk and safety

Ramsey acknowledges CDs' low risk but argues that due to their low return potential, they offer little value for most investors.

Orman values CDs for their stability, especially for risk-averse individuals. She highlights them as a reliable choice for those who can’t afford to lose any principal in market volatility.

Their advice in this area should be tailored to your specific financial situation.

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Interest rates and returns

Ramsey criticizes CDs for their low interest rates, emphasizing that stocks or mutual funds offer better returns for long-term savings.

Orman recognizes that rates are low but feels CDs are still worthwhile compared to other safe options. She recommends looking for competitive rates, especially in high-yield online CDs.

Inflation concerns

Inflation is undoubtedly a timely concern. Ramsey argues that CDs don’t hedge well against inflation, which can erode their value over time, making them unappealing for long-term wealth-building.

Orman agrees that CDs may not outpace inflation but suggests they have a place in a diversified portfolio, especially for those near retirement who prioritize safety.

CDs for retirement planning

Ramsey recommends against using CDs for retirement planning, as their conservative nature doesn’t align with his belief in more aggressive, equity-based growth strategies.

While not ideal for all retirement savings, Orman advises older, conservative investors to consider CDs as part of their retirement portfolio as a secure, predictable income source.

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CDs for diversification

Ramsey is not a fan of using CDs, even as one part of a diversified strategy. He argues that they don’t deliver on returns for long-term investors.

Orman argues that CDs may not be a good replacement for long-term investments in stocks, but they can provide some stability to a portfolio.

Her advice may appeal particularly to those nearing retirement who likely want to safeguard their investments from market volatility.

CD laddering strategy

CD laddering is a strategy where you invest in a series of CDs with different maturity dates. This allows you to take advantage of potential rate increases while ensuring liquidity.

Ramsey rarely mentions CD laddering as he generally doesn’t advocate for CDs. He prefers more growth-focused options with compounding potential.

On the other hand, Orman recommends CD laddering to maximize returns while keeping funds accessible. This strategy allows investors to benefit from potential rate increases.

Bottom line

You’re likely to hear differing opinions on CDs. Ramsey feels that they’re not good options for long-term investing and that other opportunities are better for getting ahead financially.

Orman sees some value in CDs for short-term needs and appreciates the lower risk levels they bring. They’re not the only options you have for bettering your finances.

You may decide to talk to a financial planner about how CDs and other tools can help you protect your wealth.

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