Fixed Income Options

[2B]

I'm about to roll over a CD and am less than thrilled with the nominal 4% for a 2 year CD. Does anyone have a non-mutual fund suggestion for "safe" fixed income. I want to know when the fixed income principle will be returned with a "guaranteed" amount. This would be very safe money.

I'm not interested in preferreds or mutual funds. This is the ultra-safe bucket.

I'm considering TIPS and just eating the low interest rate CD. I just thought I'd see what other people may have stumbled across.

[LOL!]

OOh, ooh! I know, I know! Pay off your mortgage! Then refinance in the future to get your money back.

[W2R]

Quote:

Originally Posted by 2B I'm about to roll over a CD and am less than thrilled with the nominal 4% for a 2 year CD. Does anyone have a non-mutual fund suggestion for "safe" fixed income. I want to know when the fixed income principle will be returned with a "guaranteed" amount. This would be very safe money. I'm not interested in preferreds or mutual funds. This is the ultra-safe bucket. I'm considering TIPS and just eating the low interest rate CD. I just thought I'd see what other people may have stumbled across.

It's a good question. I am not very thrilled with most bonds lately, but I have heard that municipal bonds are good.

I wouldn't want to invest in any long term CD's right now. I also wouldn't want to invest in gold.. Thorny problem. I have mine in MM (which isn't paying well) and bond funds right now (some of which seem to be worse). I have a little time to read and learn while they sit there losing ground with respect to inflation.

[Mysto]

There are several FDIC savings accounts that are in the 3.5% range. Safe as a CD - almost the same interest and liquidity to move when the interest rates increase (as they must)

[calmloki]

Quote:

Originally Posted by 2B I'm about to roll over a CD and am less than thrilled with the nominal 4% for a 2 year CD. Does anyone have a non-mutual fund suggestion for "safe" fixed income. I want to know when the fixed income principle will be returned with a "guaranteed" amount. This would be very safe money. I'm not interested in preferreds or mutual funds. This is the ultra-safe bucket. I'm considering TIPS and just eating the low interest rate CD. I just thought I'd see what other people may have stumbled across.

here's a 5 year cd at 5.28%: Bank Deals - Best Rates and Deals

[brewer12345]

Munis. Buy a GO bond ad go back to sleep until maturity.

[explanade]

Quote:

Originally Posted by brewer12345 Munis. Buy a GO bond ad go back to sleep until maturity.

Buying bonds directly or bond funds?

What are the yields and maturities?

[2B]

I neglected to say that this is in my IRA so munis and paying off the mortgage aren't viable options.

Many years ago I thought paying off the mortgage was a good idea (about 14% at the time). Unfortunately, I lost my job and suddenly had 3 months of living expenses including unemployment outside of my home equity. Since the biggest employer in town was laying people off in droves, home prices plummetted. I luckily got a new job quickly and the new employer did a home buy at my original purchase price.

Ever since then, having at least 1 year of living expenses readily available in an after tax account has been a basic feature of my financial planning.

I suspect that I'll get the short term CD and keep on with my original plan.

[brewer12345]

Quote:

Originally Posted by explanade Buying bonds directly or bond funds? What are the yields and maturities?

If you want a specified sum at a particular time, single bond is the way to go. Yield depends on maturity and issuer, but they compare quite favorably with treasuries and CDs if you are in the 25% or higher bracket.

[Marquette]

Annuity?

[cute fuzzy bunny]

I think I'd rather go back to the 'pay off the mortgage' portion of the program.

[HpRyder]

Quote:

Originally Posted by 2B I just thought I'd see what other people may have stumbled across.

4.25% APY 6 mo. CD, FDIC, at a bank under US Comptroller letter to raise their capitol. Ads seem to be in local paper & last about 2 weeks. Seem to be restricted to local residents.

[CitricAcid]

Muni bonds or short-term cash CDs (6 month CD). As others have stated, with interest rates and inflation in the state that they are now, once the election date is over, interest rates may finally start to rise, hurting bond prices. Would not lock in long-term to that!

[2B]

Quote:

Originally Posted by CitricAcid Muni bonds or short-term cash CDs (6 month CD). As others have stated, with interest rates and inflation in the state that they are now, once the election date is over, interest rates may finally start to rise, hurting bond prices. Would not lock in long-term to that!

That's why I want to stay reasonably short. I don't think that interest rates will go up before the election no matter what. If the banking mess calms down with inflation where it is, I expect a quick 2% increase in the fed funds. More could easily follow.

I bought a 4.25% CD that matures in Dec 2009. I didn't want to go out 4 years for 5%.