What happened to those who got CDs at 7 percent?

Q: I remember that towards the end of 2007, banks such as ING Direct and Countrywide were offering CDs for increasingly high interest rates. CDs for as short as 3 or 6 or 9 months advertised interest rates as very high as 7 percent. Some longer CDs offered interest rates even a bit over 7 percent. Furthermore, these CDs didn't require relatively big deposits compared to the past and the present. Though I considered sticking a small wad of money in one of these mouthwatering CDs, I never pulled the cash from my money market bank account where the cash sits today.

At that time would you have advised me to go for such an ING or Countrywide CD? On the other hand, knowing about this year's financial crisis, what is your Monday morning quarterback analysis?

What happened with those who bit the juicy bait for a 3 or 6 or 9 month CD at 7 percent before the year (and those great rates) ended -- and those people whose CD term is not yet completed?

A: First, I would have -- and did -- let my mother do that. As long as you're below the insured level, no problem -- has always been my advice.

Second, the CD contract is in place -- and the FDIC has never "broken" a contract in a takeover -- though it is theoretically possible that an acquiring bank could do so, I remember from my studies during the last go-round with bank failures in the late 1980s.

So today, you would have been collecting a juicy premium on interest rates -- but that's hindsight!

Terry Savage is a registered investment advisor and the author of the newly published The Savage Number: How Much Money Do You Need To Retire? (256 pages, Wiley, $24.95).