Best brokerage to by brokered cd's with

[summer2007]

I have accounts with Vanguard Fidelity and Schwab.

I would say by far that Vanguard has the most to choose from as far as brokered cd's go. Fidelity and Schwab have offerings also but no where near as many as Vanguard. Fidelity's fluctuate sometimes they have a lot sometimes they have only a small amount.

I just wanted to see if I'm missing a brokerage that has lots of CD offerings?

Jim

[LOL!]

I can report that TDAmeritrade has more than WellsFargo, but TDAM appears to have less than Vanguard. However, the list of available CDs changes daily. Sometimes drastically. You might as well not even look at the website outside of banker's hours.

[2B]

ETrade has a good selection. I've compared it to Vanguard and it is usually as good or better as far as rates and selection.

I definitely agree it's not worth looking at outside normal banking hours.

[cardude]

I have been thinking of setting up a CD ladder, but don't really know how to do it. I was just going to look up various banks and start calling.

Is there a fee on these brokered CDs? Is that how everyone does it?

Also, how do you plan it out? For instance, if I need 3K per month to live on, surely I don't buy tons of 1 month CDs. Is there a system out there that has been tested by some of yall that works?

My plan is to put all my cash in CDs so I can live on that over the next 6-7 years while I wait on my equities to recover, then start spending that. I hope 6-7 years is enough time...........

[2B]

[quote=cardude;751833]
Is there a fee on these brokered CDs? Is that how everyone does it?

Also, how do you plan it out? For instance, if I need 3K per month to live on, surely I don't buy tons of 1 month CDs. Is there a system out there that has been tested by some of yall that works?

[quote]
I don't pay a fee through my Etrade account when they are directly with a bank but there are commissions on CDs that are being resold. I don't intend to try to shop the individual CD market with after tax money. All of my CDs are inside my IRA. I find it very easy to do brokered CDs with Etrade.

I am not currently retired but I've set my CD ladder up like I will be. I think in 6 month blocks of money so I'd theoretically only pull cash out of my IRA every six month. This is my anticipated living expenses minus a small pension I'll start receiving when I'm retired.

I also believe interest rates will go up sooner rather than later so all of my maturities are less than 2 years. It hurts a little on the yield now but I'll be able to take advantage of the higher yields if they hit as I expect. That means I have multiple 6 month blocks maturing in the same 6 month period. That's not a problem in my view because I just keep the money in a 6 month lump and roll it over as necessary.

Originally, I started with quarterly CD lumps. That created way too many CDs and it became a book keeping chore to keep up.

[clifp]

I've compared Schwab with Vanguard relatively frequently, Vanguard seems offer slightly higher rates.

[Nords]

Quote:

Originally Posted by summer2007 I would say by far that Vanguard has the most to choose from as far as brokered cd's go. Fidelity and Schwab have offerings also but no where near as many as Vanguard. Fidelity's fluctuate sometimes they have a lot sometimes they have only a small amount. I just wanted to see if I'm missing a brokerage that has lots of CD offerings?

I'm curious-- do the CD rates at the brokerages beat the rates at Navy Federal Credit Union, Pentagon Federal Credit Union, USAA, or other credt unions? Fidelity has never seemed to beat the CUs.

[Gotadimple]

Quote:

Originally Posted by Nords I'm curious-- do the CD rates at the brokerages beat the rates at Navy Federal Credit Union, Pentagon Federal Credit Union, USAA, or other credt unions? Fidelity has never seemed to beat the CUs.

Nords,
I don't know about PFCU, but at my credit union, the CDs 1 year less pay .2% more (roughly) than what is available at Schwab, but Schwab's rates are better for 18 months and longer.

I think that the situation is a little different now with some banks looking for deposits so they can lend $.

A two year CD at PenFed is available for 3.25% APY today,
A two year at Capital One (Schwab) 4.00% APY (or 4.00% direct)

That's generally upside down from what I've seen in the past, but then, things have exactly been right side up, lately.

-- Rita

[charlie]

You have to pay a commission on brokered CDs (duh) and the higher rates
are usually offered by banks of dubious quality.

I would stick with a high quality credit union like PenFed, who usually offers very competitive rates.

Normally, their best offering of the year occurs in December or January.

I was lucky enough to put a chunk of my IRA into a 6.25% CD (7 years)
about 2 years ago. At that time, their policy was to allow IRA CDs for persons over 59 and 1/2 to be cancelled and reinvested at a higher
rate anytime. That policy has been cancelled but they grandfathered existing IRA CDs to allow 1 step up at any time.

I love PenFed.

Cheers,

Charlie

[saluki9]

Quote:

Originally Posted by charlie You have to pay a commission on brokered CDs (duh) and the higher rates are usually offered by banks of dubious quality. I would stick with a high quality credit union like PenFed, who usually offers very competitive rates.

1. Most brokerages are paid by the banks, not the buyer. Schwab for example does not charge you to buy CDs

2. There are several very good banks that sell through brokerage channels. Besides, with the FDIC coverage who cares?

[charlie]

Saluki9, I guess I was thinking about after-market CDs.

Also, I think you would care very much if a bank holding your CD went
belly side up. You would get your money, but when? I think it would be a big pain in the A**.

Cheers,

Charlie

[ziggy29]

Quote:

Originally Posted by charlie You have to pay a commission on brokered CDs (duh) and the higher rates are usually offered by banks of dubious quality.

A couple of thoughts:

(1) Brokered CDs don't have to come with a commission. Some brokers receive a fee from the banks to market their CDs. That *could* result in a slightly reduced yield to make up for it, but it's not a commission.

(2) CDs from "banks of dubious quality" are still FDIC-insured. I wouldn't use a weak bank to get an extra 5 basis points of yield because that's not worth the potential hassle factor, but for an extra (say) 25 basis points or more, I definitely would.

[SteveL]

There is more to a CD ladder than the yield. If you are in a Community Property State, like CA or WA, this is an important. The East Coast Banks and CU's often don't have this option. Also, simplicity has to have some importance. If you chase yield, you can end up with funds in 25 institutions. This makes taxes and keeping track of your finances a lot harder. Also, there is the 10-day window on renewal. Some banks want that notice in writing, and then want to send you a paper check, or charge you $35 for a wire, meanwhile you are losing interest on the funds.

The more assets you have, the more important simplicity becomes.

[SteveL]

Buying FDIC guaranteed CD's from troubled institutions is a way to boost your yield. As long as you are under the limit ($100k or whatever) you are safe. I got some great deals via Schwab on Indymac CD's last year. Brokered CD's are a quick way for an institution to get a lot of bucks in a hurry. I read somewhere that these can be a sign of trouble to regulators.
One of my friends has someone manage his money. They put him into very "safe" Fannie and Freddie preferred, and Lehman bonds.