A traveling couple put their home's equity in a CD to be 'untouchable' - Business Insider

— but only if you leave your money with the bank for a predetermined amount of time, generally from about 11 months to five years. The interest rate is fixed, but if you take it out before the term expires, you'll incur a penalty.

"We belonged to a credit union, which was for us a much more favorable institution to belong to than a typical bank," Jim said. "We put it into a CD where it would make a little bit less than 3% over the period of a year. The equity for the house was committed for a period of a year and untouchable."

By storing the money in a CD for a year, the Dorseys would keep the money from their home sale growing without being able to access it. "We were constricted to the budget that we had prescribed for ourselves without saying, 'Oh well, we can tap into the equity of the house,'" Jim said. "That was not going to be an issue."

He added: "We had already budgeted for this trip aside from whatever equity we had in the house. For us it wasn't like, 'Take all the money out of the house and travel with reckless abandon.' We couldn't possibly spend the money we got out of the house just by traveling. It would be ridiculous." For this retired couple, making their money "untouchable" gives them a certain amount of comfort while traveling through Europe. They know it will be safe when they want to use it again. "We will still have this money, and we will be able to buy a house again," Jim said. "You can always buy another house."

This is literally the worst financial advice I have ever seen. “Keep your money in a CD that barely keeps your returns in line with the inflation rate”. Hope they weren’t planning on actually building any wealth

2% folks, really. He is 65 and she is 52, at the end of the day on their death bed in a few years they'll realize what? Nothing.

Interesting... I guess a CD would be “safest,” but for them to make any money off of the CD, I’d imagine they’d be locked away from their investment for longer than their travel plans

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