Best CD & MM Rates Thread 2018 Archive

[nwsteve]

Treasury costs for selling early in a rising interest rate environment is the loss on the value as well as the commission. It’s not just the commission.

True! But I don't see how that is different in loss of value (at last on brokered CD) that you sell before maturity. While probably small, suspect value loss would be less on Treasury.
On direct CD's 6 mon loss of interest seems to be pretty common for <2 yr

 

[audreyh1]

True! But I don't see how that is different in loss of value (at last on brokered CD) that you sell before maturity. While probably small, suspect value loss would be less on Treasury.
On direct CD's 6 mon loss of interest seems to be pretty common for <2 yr

Some direct CDs are only 60 days interest penalty on early withdrawal - even up to 2 years (Ally). 12 month or less CDs tend to have much lower than 180 days interest penalty. 90 days or less is common.

 

[audreyh1]

I've been keeping an eye on the 2year CDs offered via Fidelity, as the 2 year seems to be a sweet spot*. Finally today the Morgan Stanley offers a 2.85% 2 year CD - up from the 2.8% CD offered by several banks for quite a while now.

The 2 year Treasury has been lagging, but catching up recently. It finally made it to 2.76% today.

*Not counting the 3.25% 15 month CD special offered by NASA FCU this month.

Wells Fargo did a one-up on Morgan Stanley today offering 2.9% for a 2 year CD.

 

[Another Reader]

Wells Fargo did a one-up on Morgan Stanley today offering 2.9% for a 2 year CD.

Wells Fargo has been consistently offering the highest rates in several durations. It's not a lot of money in total if you add up the offerings, but it's a little unnerving to me as a stockholder.

 

[redshift]

I don't see that rate in my area. What area are you in, and what division of Wells Fargo?

 

[Another Reader]

I don't see that rate in my area. What area are you in, and what division of Wells Fargo?

Not available from the retail bank branches. These are CD's sold through the brokers - Fidelity, Schwab, Vanguard and the like. A lot of the major banks offer much more competitive rates through these channels.

 

[audreyh1]

I don't see that rate in my area. What area are you in, and what division of Wells Fargo?

These rates are available through a brokerage account such as Fidelity. You won’t find them as a direct bank customer.

 

[redshift]

Thanks! Guess I'll open an account with one of them.

 

[redshift]

These rates are available through a brokerage account such as Fidelity. You won’t find them as a direct bank customer.

Thanks. I have a brokerage account at Wells, but they aren't listing that. I'll open an account at one of the others!

 

[Golden sunsets]

Wells Fargo did a one-up on Morgan Stanley today offering 2.9% for a 2 year CD.

2.9% is close to what I am looking for. I have a Northwest FCU 3% coming due on 10/10 and I would dearly love to reinvest it without reducing the return,
and also without going out longer than 2 years.

 

[Golden sunsets]

I've been keeping an eye on the 2year CDs offered via Fidelity, as the 2 year seems to be a sweet spot*. Finally today the Morgan Stanley offers a 2.85% 2 year CD - up from the 2.8% CD offered by several banks for quite a while now.

The 2 year Treasury has been lagging, but catching up recently. It finally made it to 2.76% today.

*Not counting the 3.25% 15 month CD special offered by NASA FCU this month.

Any idea how long one has to fund the CD, after opening it in order to obtain the 3.25% rate?

 

[audreyh1]

Any idea how long one has to fund the CD, after opening it in order to obtain the 3.25% rate?

The mention is that it would be available through Sept, but they have language that the offer can be pulled at any time. I don’t know about specific funding deadlines once the CD is open.

 

[sengsational]

When was the last time CD rates were this much better than Treasuries? What happened next?

 

[jazz4cash]

When was the last time CD rates were this much better than Treasuries? What happened next?

I don’t think CD rates are better than Treasuries. These rates cited here are exceptional. A broad average of CD rates lags equivalent Treasury debt ( I think).

 

[audreyh1]

We did go through a long period where CD rates exceeded treasuries when the 10years was below 2, and shorter durations much lower. But now treasuries are finally catching up at the short end, yet still behind on the longer end.

The average CD may offer crappy rates, but there are plenty of banks and credit unions offering good rates.

 

[copyright1997reloaded]

Any idea how long one has to fund the CD, after opening it in order to obtain the 3.25% rate?

I believe (if my old memory is working properly) that once you 'open' the CD you have ten days to fund it. I don't know what would happen if they closed the offer (or if 9/30 is the last day to fund).

 

[Helena]

.

A regional bank [LA/TX] is offering a new FDIC insured "variable CD" with a base rate and the possibility that rate will increase with an increase in the federal fund rate. But it never goes down below the initial base rate.

For example, a 5 year CD's base rate is 3% [based on a 2% fed fund rate.]

Any comments positive or negative about this kind of CD ??

https://www.fgb.net/variable-cd

.

 

[Helena]

Not available from the retail bank branches. These are CD's sold through the brokers - Fidelity, Schwab, Vanguard and the like. A lot of the major banks offer much more competitive rates through these channels.

Are they not FDIC insured ?

.

 

[Montecfo]

I did fund my 3.25% 15 month CD at NASA FCU on Friday.

Pretty simple.

Hope a few more like that pop up.

 

[pb4uski]

Are they not FDIC insured ?

.

Both brokered and bank CDs are FDIC insured. Brokered CDs are simply tradable like a bond after being issued by the bank.... a holder cannot go back to the bank to get their principal til the CD matures... if they want an early out they simply sell the CD in the open market... if interest rates have changed the CD's value will different from its face value.

So credit risk of bank and brokered CDs are the same, but interest rate risk is very different.

 

[audreyh1]

Are they not FDIC insured ?

.

Yes they are FDIC insured. They are issued by the bank, just sold through the broker instead of directly to retail customers. And you still have to deal with FDIC insurance limits per issuing bank.

One difference is that you don’t have the option of reinvesting the interest in the CD.

There is also no early withdrawal with penalty option like when buying directly from a bank. You would have to sell it on the secondary market through the brokerage to cash out early, so you can’t predict any loss that might incur in advance.

 

[dixonge]

Strangely enough you can get over 8% in Mexico. You do have to have some form of residency though...


https://www.actinver.com/cs/Actinve... Actinver/docs/Consulta Tasas Vigentes EN.pdf

 

[ShokWaveRider]

Strangely enough you can get over 8% in Mexico. You do have to have some form of residency though...


https://www.actinver.com/cs/Actinve... Actinver/docs/Consulta Tasas Vigentes EN.pdf

Check their GAT rates, their inflation is a little higher than ours, also I would debate the overall stability of the Peso over time.

 

[ExFlyBoy5]

I believe (if my old memory is working properly) that once you 'open' the CD you have ten days to fund it. I don't know what would happen if they closed the offer (or if 9/30 is the last day to fund).

Does anyone know for a fact if/when this offer might close? We are in the process of selling our house and are scheduled to close on October 9th and I *really* want to put those proceeds into that NASA CD. I *could* close out a couple of the Ally CDs I have, but would take the two-month penalty hit...but would prefer not to do that. I shouldn't complain...it's a good problem to have.

 

[jazz4cash]

I did fund my 3.25% 15 month CD at NASA FCU on Friday.

Pretty simple.

Hope a few more like that pop up.

I went into the branch to open and fund a 15 mo IRA CD today. I was unable to get the 3rd party website to work. It took about an hour even though I already have an IRA there and had check in hand from Fido payable to NASA FCU. Their system does not adequately distinguish between rollovers and transfers. I’m fed up with jumping through all these hoops and need to find another way to access decent fixed rate offers. I did get good service in the branch but they are very lightly staffed.