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Any New Ideas - Best CD interest
Old 05-05-2015, 06:22 PM   #1
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Any New Ideas - Best CD interest

Will have to reinvest CD's maturing next year. (7yr@ 4%). Funny, 6 years ago, Financial Advisors, were saying, DO NOT GO LONG. Do not buy long term CD's.

Advice, was, interest rates will rise shortly, So buy short term. Did not
take there advice. Here it is 6 years later. Interest rates are lower, and
still have not gone up. Actually, have fallen.

How are other's handling this situation?
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Old 05-05-2015, 07:51 PM   #2
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May want to bookmark this site if your want to stay in FDIC/NCUA Insured CD's: https://www.depositaccounts.com/blog/


Every once in a while there are some decent CD's available. Mostly at CU like Navy FCU and sometimes Pentagon FCU.


Frankly not anything to rave about but best site for information.
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Old 05-05-2015, 10:41 PM   #3
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2.25% is the best, nationally available 5 year CD rate. Hopefully the Fed will start raising the interest rate later this year, and you should see an increase in the 5 year CD rate by next year.
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Old 05-06-2015, 04:43 AM   #4
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I'm holding our cash reserves in interest checking until at least January.
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Old 05-06-2015, 05:48 AM   #5
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I started build a CD ladder 5 years ago, and was getting 3.5% on a 5 yr CD. Today at 1.7%. I have tried to stick with the same idea that I can't outsmart the market, take the best rate I can find when I am ready to buy another CD. That 3.5% I had and that 4% you had didn't look that good back then. However, with the world going to negative rates in some cases, 1.7% might look good in 3 or 4 years.


If you have one CD you could split it into say 1yr, 3yr, 5yr and 7yr CDs, so you don't get locked into a low rate long term.
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Old 05-06-2015, 07:23 AM   #6
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Will have to reinvest CD's maturing next year. (7yr@ 4%). Funny, 6 years ago, Financial Advisors, were saying, DO NOT GO LONG. Do not buy long term CD's.

Advice, was, interest rates will rise shortly, So buy short term. Did not
take there advice. Here it is 6 years later. Interest rates are lower, and
still have not gone up. Actually, have fallen.

How are other's handling this situation?
The Federal Reserve is sending clear signals of its intention to raise short term interest rates, although the timing of the rate increases is uncertain. If I were in your situation with a seven year CD maturing next year, I would avoid making any plans right now. The interest rate landscape is likely to look much different when your CD matures than it does now.

The good news for you is that interest rates are likely to be higher next year. The bad news is that they are unlikely to have peaked. Still, you will probably have more options to reinvest your CD and get better yields than if you were facing the decision today.
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Old 05-06-2015, 07:32 AM   #7
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people are talking about negative rates, does anybody see this as realistic?
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Old 05-06-2015, 08:42 AM   #8
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Consider Synchrony Bank.........w/ their longer term (>= 5yr) CDs.
With their 6 mo. EWP, you can go 1 yr , then w/d and still be better than
current savings rates. You will have to convince yourself that the EW is possible on your request, not their approval.
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Old 05-06-2015, 08:55 AM   #9
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At 2.5% for 5-7 year CD's is about the best rate now available (not withstanding this past weeks 3.5% APY at Navy FCU for a 15 month CD for a limited amount of money (maximum of $7,500 per account holder). Factor in your marginal tax rate and most long term CD's are probably returning under 2%. However, locking in a long term rate could not be too costly if you have to redeem early IF rates rise significantly (remember any forfeiture of interest on early redemption would be an "above the line" deduction). Rates may rise but probably will not rise quickly. IMHO rates may NEVER go up significantly and have we not been waiting about 7 years for them to go up?
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Old 05-06-2015, 08:58 AM   #10
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Actually if ensure that your CD has only a 6 month interest withdrawal penalty, you can figure out at what point it becomes uneconomic to do an early withdrawal and re-invest.
For the sake of arguement assume a 5 year at 2% and 2 years left. Then if you get 2% more per annum at that point you would be 3% ahead at the end of the 5 year term.
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Old 05-06-2015, 09:12 AM   #11
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Do you have any debt? Let's say you have a mortgage at 4%. Paying down some principal with you spare cash will give you a guaranteed ROI better than any CD you can get nowadays. Of course the tax deductibility of mortgage interest payments has to be taken into account, but chances are you would still be ahead.

I am employing this strategy with a mortgage on a rental property.
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Old 05-06-2015, 09:46 AM   #12
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Rates may rise but probably will not rise quickly. IMHO rates may NEVER go up significantly and have we not been waiting about 7 years for them to go up?
Saying rates may never go up seems like saying stocks have reached a permanently high plateau.
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Old 05-06-2015, 09:57 AM   #13
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The War on Savers Fed's low interest rate policy continues no matter what anybody says at the moment. The transfer of wealth from savers like us to the Banks continues and with a very mediocre recovery growth rate, relatively low interest rates will probably continue.

Note: I have been consistently wrong on interest rates for over 5 years. Except for my purchase of the 3% PenFed CD's over a year ago, doing the opposite of what I have done has been more profitable.
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Old 05-06-2015, 11:34 AM   #14
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Originally Posted by wolf View Post
Will have to reinvest CD's maturing next year. (7yr@ 4%). Funny, 6 years ago, Financial Advisors, were saying, DO NOT GO LONG. Do not buy long term CD's.

Advice, was, interest rates will rise shortly, So buy short term. Did not
take there advice. Here it is 6 years later. Interest rates are lower, and
still have not gone up. Actually, have fallen.

How are other's handling this situation?
Interest rates will stay very low as long as wages remain low.

The housing market is another problem.

This low wage economy cannot handle higher interest rates. Not until it gets out of the race to the bottom downward spiral.
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Old 05-06-2015, 11:46 AM   #15
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At 2.5% for 5-7 year CD's is about the best rate now available (not withstanding this past weeks 3.5% APY at Navy FCU for a 15 month CD for a limited amount of money (maximum of $7,500 per account holder). Factor in your marginal tax rate and most long term CD's are probably returning under 2%. However, locking in a long term rate could not be too costly if you have to redeem early IF rates rise significantly (remember any forfeiture of interest on early redemption would be an "above the line" deduction). Rates may rise but probably will not rise quickly. IMHO rates may NEVER go up significantly and have we not been waiting about 7 years for them to go up?
Alas, one must have a military direct deposit to get the special rate at Navy this time. I am hoping for a general member appreciation offer later this year.
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Old 05-06-2015, 05:28 PM   #16
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Quote:
Originally Posted by wolf View Post
Will have to reinvest CD's maturing next year. (7yr@ 4%). Funny, 6 years ago, Financial Advisors, were saying, DO NOT GO LONG. Do not buy long term CD's.

Advice, was, interest rates will rise shortly, So buy short term. Did not
take there advice. Here it is 6 years later. Interest rates are lower, and
still have not gone up. Actually, have fallen.

How are other's handling this situation?
That's my story too greetings10. Got the same advice not to do it. Now here we are almost 7 years later. I had also put some into 2 jumbo CD's at 5% for 5 years. Those already came due and luckily I was able to roll that during the 5 year PenFed 3% deal over a year ago thanks to this forum. Now wish I had done more.

I'll be searching for something as well when those 4% ones come due next year. For now..just biding time. Wish I had some possibilities for you…but …the rates just are not there.
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Old 05-06-2015, 08:55 PM   #17
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That's my story too greetings10. Got the same advice not to do it. Now here we are almost 7 years later. I had also put some into 2 jumbo CD's at 5% for 5 years. Those already came due and luckily I was able to roll that during the 5 year PenFed 3% deal over a year ago thanks to this forum. Now wish I had done more.

I'll be searching for something as well when those 4% ones come due next year. For now..just biding time. Wish I had some possibilities for you…but …the rates just are not there.
Your story and mine are the same. Also, have the same Penfed 7 yr Cds.
Was lucky, got some Penfed 10yr@5%, like others.
Seems, best advice, invest in long term CD's, with 6 month EW penalty.
(although, even that strategy, is getting harder to find).
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Old 05-06-2015, 10:18 PM   #18
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Alas, one must have a military direct deposit to get the special rate at Navy this time. I am hoping for a general member appreciation offer later this year.
Still using Navyfed's "Add On" CD feature that's generally available from Jan 1 to Apr 15th each year (and not advertised). Just added to a 7 yr 4% CD originated in 2010 that still has 2 yrs to run.

Nasa FCU has a 49 month special at 2.13 that was trimmed down from 2.35. I received a mailer stating the 2.35 was available until May 31st but they actually invoked the "rates may change at any time without notice" clause the day after I opened an account with them.....I now have cash stashed at 4 institutions just to get a bit more interest.....Stable Value fund is under 2% now.
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Old 05-06-2015, 11:13 PM   #19
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Still using Navyfed's "Add On" CD feature that's generally available from Jan 1 to Apr 15th each year (and not advertised). Just added to a 7 yr 4% CD originated in 2010 that still has 2 yrs to run.

Nasa FCU has a 49 month special at 2.13 that was trimmed down from 2.35. I received a mailer stating the 2.35 was available until May 31st but they actually invoked the "rates may change at any time without notice" clause the day after I opened an account with them.....I now have cash stashed at 4 institutions just to get a bit more interest.....Stable Value fund is under 2% now.
Eh, I have my CDs spread out chasing yield. At the moment I am content to let cash pile up when CDs mature. If the pile eventually gets too big, I will go see what I can find. A hair over 2% for 5 years does not do much for me.
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Old 05-06-2015, 11:33 PM   #20
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Still using Navyfed's "Add On" CD feature that's generally available from Jan 1 to Apr 15th each year (and not advertised). Just added to a 7 yr 4% CD originated in 2010 that still has 2 yrs to run.

Nasa FCU has a 49 month special at 2.13 that was trimmed down from 2.35. I received a mailer stating the 2.35 was available until May 31st but they actually invoked the "rates may change at any time without notice" clause the day after I opened an account with them.....I now have cash stashed at 4 institutions just to get a bit more interest.....Stable Value fund is under 2% now.

I was 'lucky' enough to get that 2.35 rate a few weeks ago. But with the 10yr having gone up quite a bit in the last week or so, I would expect some more deals to come up pretty soon.


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