Best CD & MM Rates Thread 2018 Archive

[almost there]

They had like a 2 star rating from reviews. May have just been a stunt to drum up some quick business? Hmmm..

 

[almost there]

Schwab has 2.8% 1 yr up from 2.7% 2 weeks ago, and a 3.6% 5 year.
Might just do that as its easy..............Have 5 weeks to shop around.

 

[ShokWaveRider]

We will need to see what comes out of the Fed's December meeting. If the language suggests reducing hikes and there is NOT a December Hike. That may be interesting.

 

[audreyh1]

We will need to see what comes out of the Fed's December meeting. If the language suggests reducing hikes and there is NOT a December Hike. That may be interesting.

I’m inclined to think that the market may continue be nervous until the Fed Dec 19 meeting. If there is a hint of backpedaling, they might be a relief rally. Or not, if traders think the Fed is seeing a softer outlook. Or both! LOL!

 

[almost there]

Tough to say. Even though the market was flat this year, the fed has been so behind the curve it would not surprise me to see rate hikes through 2019. Time will tell.

"The U.S. economy is in good shape
Inflation remains steady
We have a workforce that's at full employment"

 

[eytonxav]

On the 5 years, be careful - at least on the ones from Fidelity, the 5 years at 3.55% and 3.6% are all callable, non-callables max out at 3.5%.

I purchased a 5 yr 3.6% at Fidelity the other day that is call protected.

 

[Amethyst]

I am hoping any rallies stay away until after Dec 31st, to keep Mr. A.'s 2019 RMD as small as possible.

I’m inclined to think that the market may continue be nervous until the Fed Dec 19 meeting. If there is a hint of backpedaling, they might be a relief rally. Or not, if traders think the Fed is seeing a softer outlook. Or both! LOL!

 

[Dtail]

Actually Goldman has a 3.60 5yr call protected new issue CD currently at Fidelity.

 

[njhowie]

I purchased a 5 yr 3.6% at Fidelity the other day that is call protected.

Apologies - I was misreading the screen I was looking at. My bad.

 

[audreyh1]

Andrews FCU has 8 mo CD at 2.84. Their 84 mo CD IS 3.45.
Eighty-four is too long for me.

One nice thing about Andrews FCU CDs is that you can do partial early withdrawals - at least in the past this was an option. That's a comfort when you are contemplating something like a 7 year CD.

 

[51togo]

I have a few 5 years PenFed accounts expiring in couple weeks to a month with 3 % rate. I got the tip from this site then while rate was relatively low also PenFed is turning out to be troublefree and good services. Thank you! Although I see other CU rate are slightly higher at 4% but not sure as trustworthy so I tend to keep it for another 1 or 2 may be even 3.3 as Fed may keep rate flat after December? What’s your take on this? Also six months ago I placed a large sum to my bank Chase into a broker CD at 2.5 for couple years, in understand the broker CD does not reflect the daily compounds but is it the same when mature and why additional risk? Thanks all!

 

[REWahoo]

...PenFed is turning out to be troublefree and good services.

Check out the change PenFed made to their early termination penalty a couple of years ago - definitely not member friendly. I'm going elsewhere when my CDs mature next month.

2) Certifcates Having a Term Greater Than Six
Months.
a) If redeemed within the frst year, all dividends
will be forfeited.
b) If redeemed thereafter, but prior to the maturity
date, the early withdrawal penalty will equal 30%
of what would have been earned if the certifcate
had been held to maturity, not to exceed total
dividends earned

 

[almost there]

understand the broker CD does not reflect the daily compounds but is it the same when mature and why additional risk? Thanks all!

Would also like to know of any risk? If its Non-Callable and insured by the FDIC.
"What difference does it make" Several pay Semi-annually if thats a concern. Other than that?

 

[Ready]

I would not buy callable CDs through a brokerage. They are a bad deal. The banks get to decide if they are going to keep paying the posted rate or call the CD, yet if you decide you want to cash out you have to sell it on the secondary market with no guarantee you will get back what you paid for it.

Bank CDs are the opposite. The bank has to guarantee the rate for the entire term, but you get to “call” the CD if you want to cash in early by paying a pre-determined early termination penalty.

Given the benefits of a bank CD, brokerage CDs should be paying higher rates to compensate for the added risk. But for many years now they simply have not.

 

[almost there]

Thats just it. What added risk if its "non- callable" and you know you will not need the money in a 1- 5 yr CD for 10-15 years? Am not seeing the risk?
(But am not all that sharp either)........
Maybe some one could explain it to me. Thanks!

 

[Ready]

Thats just it. What added risk if its "non- callable" and you know you will not need the money in a 1- 5 yr CD for 10-15 years? Am not seeing the risk?
(But am not all that sharp either)........
Maybe some one could explain it to me. Thanks!

If interest rates rise sharply you will be stuck holding on to a CD with below market returns, for perhaps many years if you buy a long term CD. I will pay a modest early term penalty to the bank and reinvest at the higher rate. It’s lost opportunity risk, not risk of default. But it’s still a valid risk.

 

[jim584672]

Check out the change PenFed made to their early termination penalty a couple of years ago - definitely not member friendly. I'm going elsewhere when my CDs mature next month.

They are going to have a mass exodus with that kind of penalty.

 

[almost there]

If interest rates rise sharply you will be stuck holding on to a CD with below market returns, for perhaps many years if you buy a long term CD. I will pay a modest early term penalty to the bank and reinvest at the higher rate. It’s lost opportunity risk, not risk of default. But it’s still a valid risk.

Good advice. Will do a few, but will avoid the brokered 5 yr.
Hard to imagine a huge spike in rates after the past decade.
But it is a possibility. 3.5%-4% seems big after the past 10 years. lol lol
Thanks

 

[jazz4cash]

Andrews FCU has 8 mo CD at 2.84. Their 84 mo CD IS 3.45.
Eighty-four is too long for me.

I just noticed the email preview says 2.89 apy for the 8 month CD but when you open the email it’s 2.86 instead. I know it’s trivial, but still...Anybody else see this?

 

[copyright1997reloaded]

They are going to have a mass exodus with that kind of penalty.

Twenty days until the first of my PenFed 3.05% certificates come due. I have the ACH link set up to be able to draw the funds out. The Federal Reserve December meeting is right when the certificates come due - I wonder what the wording will be when they do the 0.25% rate hike (expected).

If the economy is softening, the end of the upward trend in rates might come sooner than later. If this is just a temporary blip (or not a blip at all) caused by order jumps earlier in the year to get ahead of tariff hikes, then we can expect rates to continue their upward trend.

Any thoughts out there as to when you think we will peak on this cycle (at which point I might want to go longer term on some CD's, e.g. 4-6 years)?

 

[calmloki]

Oops - I had already set our Penfed CD to go into the share account rather than renewing, but notice that our ACH transfer banks aren't the best current ones. Updated ACH banks at Penfed, but the trial deposits will take a couple days and then I need to verify them. Our certificates mature on 12/2 - sloppy of me to let the cash camp out earning diddly in the share account for a few days. Set up Discover and Ally as ACH partners - they both earn 2%. I've more banks linked to Discover, but Ally only charges $20 for a wire transfer vs. $30 at Discover. I think Ally has been faster and easier to do wires with.

 

[pb4uski]

Awesome! Your post made me realize that I didn't have a link between PedFed and my Vanguard IRA brokerage account... so I initiated one so once those CDs mature and get put into my Share account I can easily transfer the funds back to Vanguard... (I hope).

Mine don't mature until Dec 12 so I should have ample time to get the links established.

 

[REWahoo]

Awesome! Your post made me realize that I didn't have a link between PedFed and my Vanguard IRA brokerage account... so I initiated one so once those CDs mature and get put into my Share account I can easily transfer the funds back to Vanguard... (I hope).

I need to do the same. How did you initiate the link? I don't see any way to set that up at Penfed unless the other institution has a transit routing number, which I don't believe applies to Vanguard. What am I missing?

 

[Amethyst]

I set up a link from Penfed to my credit union, then transferred from the CU to VG. It does take an extra day or two for everything to clear and go through.

I need to do the same. How did you initiate the link? I don't see any way to set that up at Penfed unless the other institution has a transit routing number, which I don't believe applies to Vanguard. What am I missing?

 

[pb4uski]

I need to do the same. How did you initiate the link? I don't see any way to set that up at Penfed unless the other institution has a transit routing number, which I don't believe applies to Vanguard. What am I missing?

I got the routing and account numbers from the PenFed website and set the banks up on the Vanguard website. I just needed to make sure that my IRA share account was linked to my Vanguard IRA brokerage account and not my taxable account to avoid a nasty surprise.