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Comment by starkfist | Hacker News Reader

CD rates are at 1% and are only FDIC insured up to $250K. I'm not convinced any bank will let you buy a $4.9 million CD. Although I'm sure brk is as smart as anyone I wouldn't take tips from random people on the internet.

Whenever these types of questions appear I find them a bit hard to believe. The anonymous OP suddenly has $5M in cash? There's just a un-cashed check for $5M hidden in the sock drawer? Where is the money now? As soon as you show up at a bank with more than $100K you're going to be swarmed with people suggesting various things to do with your money. Hasn't the OP already had to deal with all the tax and legal surrounding a transaction like this? He or she should be familiar with a flotilla of financial professionals by now.

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You can buy 20 CD's or buy a CDAR, which is a pass-through instrument that aggregates CDs at multiple banks to get it all under FDIC insurance.

http://www.cdars.com/

Personally, I think you'd just be better off buying government bonds from your favourite world leaders.

Based on past experience, nobody will bother you.

Yeah. Unless you're going to Mom's Bank of Sheboygan, $5m isn't that big of a deal. I only have experience with 7 figure sums in corporate accounts, but even the bank teller at the supermarket isn't wowed by that.

If you tell a bank you have $5m to to put in CD's they'll wet their pants alright, but it won't be security they call. It'll be their boss to gloat. (Unless maybe you bring it in in $100's in a duffel bag.)

I'm with you about it smelling a bit fishy, but on this site I take people at face value.

That said, there's plenty of places you can invest in AAA securities that pay much more than 1%. Split across several of these the capital should be safe until he finds a better place for it.

Credit ratings are BS. It's as if we didn't learn anything from watching the disaster that occurred when the world believed AAA-rated MBSs were sound investments. Don't let someone else tell you what investments are "safe".

That sounds impressive and popular with all the 'the market doesn't work/they're all corrupt' type of outrage currently doing the rounds, but the failures of ratings companies to correctly rate highly complex debt instruments doesn't make them all useless.

The fact remains there are a lot of simple, understandable securities which the ratings companies are across and have a long history of payments to look back on. I'm talking about corporate bonds where you can assess the creditworthiness of the company, government (non-US) bonds of stable and credit-worthy nations that pay much more than 0-1%

The other brk seems like a pretty decent idea if brk's advice regarding buying large CDs is incorrect:

http://www.google.com/finance?client=ob&q=NYSE:BRK.A

You can buy Tbills directly from the Treasury at http://treasurydirect.gov/ Lower rates than a CD, but safer if you are worried about your bank going belly up (if you own a Tbill, the US Govt would have to go bankrupt for you to lose your money).

Short-term T-bills, then?

http://www.treasurydirect.gov/indiv/products/prod_tbills_gla...

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