Best CD & MM Rates Thread 2019 - Please post updates here

Kinda interesting to me data point (and perhaps a reason to have VMMXX) is that my CD spreadsheet shows I have a weighted yield of 2.484% and an average duration of 38 days. Looking at Vanguards web site VMMXX is at 2.48% compounded and an average duration of....38 days. So, my chasing CD's has resulted in the same characteristics as the Vanguard MM fund. :(

In my defense, I have a some CD's opened at lower rates (2.00% to 2.05%) which are maturing very soon (w/i a few days), and my overall compound yield should go up shortly....but so will the weighted duration.
 
Best CD & MM Rates Thread 2019 - Please post updates here

Just had a Synchrony CD mature, so DW and I each opened a Navy FCU 17-month 3.25% CD. It has a $50k maximum, but with each of us opening one, it’s a total of $100k.
 
Federal Home Load Bond--Step up 5 year
FEDERAL HOME LN MTG CORP MTN
Coupon End Date
Coupon
Yield to Maturity
10/30/2021 2.700

10/30/2022 3.000

04/30/2023 3.250

10/30/2023 3.500

04/30/2024 4.500

An option for buying some insurance against an extended period of low interest. Most of mm are now below 2.4.
You can buy on Fidelity at no cost as it is new issue.
 
nwsteve said:
Federal Home Load Bond--Step up 5 year
FEDERAL HOME LN MTG CORP MTN
Coupon End Date
Coupon
Yield to Maturity
10/30/2021 2.700

10/30/2022 3.000

04/30/2023 3.250

10/30/2023 3.500

04/30/2024 4.500

An option for buying some insurance against an extended period of low interest. Most of mm are now below 2.4.
You can buy on Fidelity at no cost as it is new issue.
Click to expand...

Just keep in mind that these can be called beginning July this year. Should the Fed lower rates, they will get called. Should rates go higher, they will keep you locked in so long it is to their advantage.

Aside from that, they look pretty good.
 
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njhowie said:
Just keep in mind that these can be called beginning July this year. Should the Fed lower rates, they will get called. Should rates go higher, they will keep you locked in so long it is to their advantage.

Aside from that, they look pretty good.
Click to expand...

Ha, just was going to ask about that.
On a related note, when would it ever be advantageous to hold a callable bond?
 
njhowie said:
Just keep in mind that these can be called beginning July this year. Should the Fed lower rates, they will get called. Should rates go higher, they will keep you locked in so long it is to their advantage.

Aside from that, they look pretty good.
Click to expand...

Point WELL taken! And I am not suggesting it be your only bond position. I have found the Fed to be a bit slow at the call game so can get a bit of benefit from their lag. It just strikes me for a sliver of the fixed income portfolio to have this bit of "juice" in the mix. Certainly not seeing much better in the way of noncallable bonds for the same duration and quality.
 
I'm going to make a plug for iBonds here. This April is the last month you can get the current offering of a 2.83% rate.

Currently the iBond is offering a fixed rate of 0.5% which is much higher than it the recent past when it was mostly 0% and occasionally 0.1% or 0.2% and and just once prior to this 6 months it was 0.3%. You have to go 10 years back to find a higher fixed rate.

I think this fixed rate will drop considerably next month due to recent CPI being quite low - 0% in fact for 3 of the past 6 months, and if you look at the patterns in the past with iBonds, the fixed rate tends to drop to 0% or close when inflation is low. You can see the historical fixed rates offered in this chart. https://www.treasurydirect.gov/indiv/research/indepth/ibonds/IBondRateChart.pdf

I am planning to buy some - I did last fall replacing some iBonds paying 0% fixed rate, and this time I'll replace some iBonds paying a 0.2% fixed rate.
 
On I-Bonds, if you hold off until after April 10 CPI news release to decide, you can see what your 2nd 6 months rate would be. So far, 5 months in, inflation has been low. I do think March CPI will be higher due to gasoline and oil prices , but then you can compare to other fixed rates. I have owned I-Bonds since 2001, but will not be adding any to my holdings.
 
Dave J said:
On I-Bonds, if you hold off until after April 10 CPI news release to decide, you can see what your 2nd 6 months rate would be. So far, 5 months in, inflation has been low. I do think March CPI will be higher due to gasoline and oil prices , but then you can compare to other fixed rates. I have owned I-Bonds since 2001, but will not be adding any to my holdings.
Click to expand...

That does not tell you anything about what the iBond fixed rate will be next month. You don’t know what the second six months iBond rate will be without knowing what they will offer for the fixed rate. My whole point was about the fixed rate and my speculation that it could drop considerably like it has in the past under similar circumstances.
 
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audreyh1 said:
That does not tell you anything about what the iBond fixed rate will be next month. You don’t know what the second six months iBond rate will be without knowing what they will offer for the fixed rate. My whole point was about the fixed rate and my speculation that it could drop considerably like it has in the past under similar circumstances.
Click to expand...

My point was that on April 11th, you will be able to calculate your return for the first year of ownership if you go ahead and buy in last part of April locking in your fixed rate. If inflation is low enough , say equal to 1/2 of 1% for I-Bond purposes( 1st 5 months is now at .267% of 1%) , your 2nd 6 month rate would be 1% total, or a blended rate of 1.915% for the first year. Many, many online savings accounts pay higher, 2.2% (Ally) to 2.47% (USALLIANCE Financial), with full liquidity to move without 3 months interest penalty. I agree if you want I-Bonds for the long haul, the current .50 fixed rate is as good as it has been for quite a while, but still not great and will most probably go down May 1.
 
Oh - OK. Sorry, I misunderstood. You're saying you can calculate what your rate will drop to after six months.

If you purchase this month, you'll have the 2.83% rate for six months, April through September. Your rate wouldn't drop until October 2019.

And we don't know what online accounts like Ally will be offering in six months. If longer term interest rates continue to drop and inflation rates drift lower, they will probably start drifting down as well.
 
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audreyh1 said:
Oh - OK. Sorry, I misunderstood. You're saying you can calculate what your rate will drop to after six months.

If you purchase this month, you'll have the 2.83% rate for six months, April through September. Your rate wouldn't drop until October 2019.

And we don't know what online accounts like Ally will be offering in six months. If longer term interest rates continue to drop and inflation rates drift lower, they will probably start drifting down as well.
Click to expand...
Yes, you can calculate what your rate will be, up or down, the last 15-20 days of April and October every year. In my opinion, you should buy I-Bonds the last few days of April or October , if at all. Fixed rate has been tough the last 10-15 years to earn much, as you well know. Thanks for all your posts thru the years. For anyone new to I-Bonds, keep in mind if you cash them in from end of 1st year(earliest possible) to 1 day before end of year 5, you will forfeit the last 3 months interest, whatever that was. So if it goes to next to nothing, if you cash in 3 months into the low rate, you really don't pay much penalty.
 
My current 2018 federal tax calculation (still in progress) shows me getting a decent refund. Has anyone out there directed the payment to i-bonds? Any gotcha's? This is separate than the annual limit on i-bond purchases, correct?
 
WARNING!

Be careful about clicking on those CD offer ads.

The fake bank scammers are still at it. This morning I came across a Google Ad with the title “12 month CD 3.40% APY | No penalty. FDIC insured | Minimums apply”. The ad pointed to a new fake bank website with many similarities to the fake bank websites I described last week.

As DA readers can tell from the ad, a no-penalty 12-month CD with a 3.40% APY is very suspicious. Even without the no-penalty feature, that would be a very high rate. The best real no-penalty CD that is currently available from a real bank is the 13-month No-Penalty CD (2.60% APY) from PurePoint Financial.
Click to expand...

https://www.depositaccounts.com/blog/fake-bank-website-pops-verifying-bank-website-address.html

Of course there have been real CD offers for short-term CDs above 3%. Andrews FCU offered a 6 month 3.26% CD about a month ago for Military Week. So you never know.
 
copyright1997reloaded said:
My current 2018 federal tax calculation (still in progress) shows me getting a decent refund. Has anyone out there directed the payment to i-bonds? Any gotcha's? This is separate than the annual limit on i-bond purchases, correct?
Click to expand...

I took my refunds in i-bonds for several years but decided to stop (& in the past few years haven't gotten a refund anyway). One thing I didn't like about it is that they usually gave me many bonds in small denominations -- e.g., for an $2000 refund you might get one $1000 bond, one $200 bond, a couple of $100 bonds and MANY $50 bonds. Not sure why they do that, but I now have dozens of bonds in very small denominations. More of a hassle to keep track of.
 
audreyh1 said:
WARNING!

Be careful about clicking on those CD offer ads.



https://www.depositaccounts.com/blog/fake-bank-website-pops-verifying-bank-website-address.html

Of course there have been real CD offers for short-term CDs above 3%. Andrews FCU offered a 6 month 3.26% CD about a month ago for Military Week. So you never know.
Click to expand...
Andrews has an 84 month 3.45% special right now. I want to warn anyone not local, joining can be a hassle possibly not worth it. https://www.andrewsfcu.org/whats-new/promotions/specials.html
 
Find of the day. Suncoast Credit Union special... 3.5% on a 5 year Jumbo CD... $100k minimum... 180 day EWP.... partial withdrawals allowed... $100k minimum.... NCUA.

Or the 3.25% for 24 month CD looks inviting too.

https://www.suncoastcreditunion.com/community/promotions/jumbo-cd

jumbo-cd-rates-chart.ashx
 
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