Join Early Retirement Today
Closed Thread
 
Thread Tools Search this Thread Display Modes
Old 11-01-2020, 11:09 AM   #821
Recycles dryer sheets
 
Join Date: Oct 2017
Location: New York, NY
Posts: 179
Quote:
Originally Posted by cbo111 View Post
Wow, I just had a $60K CD mature that was earning 4%. I browsed the current rates and found their 5-year CD is now paying .4%!
These are truly "coffee can/under the mattress" equivalent rates. I noticed their MM rate is currently also .4%. I really don't feel comfortable moving it to equities. What to do?
There are CDs for around 1.30% to 1.76% for 5 yr. There's a probability that extremely low interest will prevail for a few more years. This from a very good and reliable site: depositaccoounts.com. I suggest you browse it by Nov. 2020 CDs and other accounts like MMs, checking, etc. They do the searching for you and even give all about the reliability of the bank or credit union. I too woke up from a 6% CD that matured a year ago, and another maturing in December 1... to this awful almost zero percent nightmare. Be sure to always read the comments by very savvy savers too. Good luck!
Rosedala is offline  
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-01-2020, 11:12 AM   #822
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
 
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 13,906
Quote:
Originally Posted by cbo111 View Post
Wow, I just had a $60K CD mature that was earning 4%. I browsed the current rates and found their 5-year CD is now paying .4%!
These are truly "coffee can/under the mattress" equivalent rates. I noticed their MM rate is currently also .4%. I really don't feel comfortable moving it to equities. What to do?
Consider an Ally 5 yr high rate CD: https://www.ally.com/bank/high-yield-cd/

Here is why I buy these instead of shorter term ones:
It pays 1% but if rates go up after 21 months, you can cash it, pay the penalty and still net more than the 2yr CD pays even if the 2 yr had no penalty.

Here are the effective rates including the penalty cost for the 5 yr CD :

1 Year0.58%
2 Years0.79%
3 Years0.86%
4 Years0.90%
5 Years1.00%
__________________
Fortune favors the prepared mind. ... Louis Pasteur
Sunset is offline  
Old 11-01-2020, 11:22 AM   #823
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 32,249
Agree... often even if you have a shorter time horizon you might be better off buying the longer CD and paying the early withdrawal penalty.

Let's say you have $100k and a 3-year time horizon. The 3-year Ally CD pays 0.75%, so your $100k would grow to $102,267 after 3 years. The 5-year CD would have grown to $103,030 and if you withdraw you would owe 150 days interest, so by my calculatons an early widrawal penalty of ~$425... so you would receive $102,604 after 3 years and be $337 ahead.

Plus, if it turns out that you don't need those funds after 3 years and 1% is still an attractive interest rate then you can just stay in.

You got to do the math.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline  
Old 11-01-2020, 11:58 AM   #824
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Aug 2004
Location: Laurel, MD
Posts: 6,977
Quote:
Originally Posted by pb4uski View Post

If you qualify to join Navy Federal, their 12 month CD is ~0.8% and 5-year is ~1.2%... add another 0.05% for more than $100k. Or alternatively, they have 12-24 month add-on CDs that are 0.7% to 0.8%.

.
Hmmm...You made me look but I don't see any add-on CDs at NFCU right now.

As far as what to do, I think many of us are putting year-end CD specials from the likes of Penfed and NFCU on our Xmas list this year. My 5% Penfed CDs mature in Jan.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
jazz4cash is offline  
Old 11-01-2020, 01:13 PM   #825
Full time employment: Posting here.
Lakedog's Avatar
 
Join Date: May 2007
Posts: 900
My local credit union (MAX) pays 0.8% on their performance money market for balances over $100k -- surprised they have not dropped it even more considering what most others are paying currently.
Lakedog is online now  
Old 11-01-2020, 01:53 PM   #826
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 32,249
Quote:
Originally Posted by jazz4cash View Post
Hmmm...You made me look but I don't see any add-on CDs at NFCU right now.

As far as what to do, I think many of us are putting year-end CD specials from the likes of Penfed and NFCU on our Xmas list this year. My 5% Penfed CDs mature in Jan.
If you look under the 'More' tab you'll see a bunch of different Easy Start certificates. Those allow additional deposits.

I'm not very optimistic that we'll see some great CD specials this December
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline  
Old 11-01-2020, 02:03 PM   #827
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Aug 2004
Location: Laurel, MD
Posts: 6,977
I don't even have the more tab anymore. It went away when they re-vamped their website. I know because the variable rate CDs used to hide on that tab also but are now listed with the "standard Cds" I'll keep looking tho.....

EDIT: Found it. They buried it pretty good too. If I use the link at the top of the page, there is no "more" section and no "more" tab but if I follow the link at the bottom of the homepage I can dig down to the "Easy Start" certificates which are add-on products.

Thanks for the head up!
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
jazz4cash is offline  
Old 11-02-2020, 09:05 PM   #828
Recycles dryer sheets
 
Join Date: Oct 2017
Location: New York, NY
Posts: 179
Quote:
Originally Posted by Sunset View Post
Consider an Ally 5 yr high rate CD: https://www.ally.com/bank/high-yield-cd/

Here is why I buy these instead of shorter term ones:
It pays 1% but if rates go up after 21 months, you can cash it, pay the penalty and still net more than the 2yr CD pays even if the 2 yr had no penalty.

Here are the effective rates including the penalty cost for the 5 yr CD :

1 Year0.58%
2 Years0.79%
3 Years0.86%
4 Years0.90%
5 Years1.00%

Sunset, you can get a Wings.com 5 yr. CD for 1.31% now. When I started the membership it was 1.41% but went down in the middle of my process. I may get the 1.31% because the-next-to-nothing interest may continue for a few more years...according to those who know. However, I'm still thinking about it and I'm sure by the time I decide, they'll "trim" it again... Oh, if you have available more money like 100K they go up quite a bit. Go see it. Good luck!

P.S. I saw quite a few others that paid up to over 2%, so if you're lucky and can get those I think it's a good decision. Browse depositaccounts.com.
Rosedala is offline  
Old 11-07-2020, 04:54 PM   #829
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
 
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 13,906
I'm thinking about buying some I-bonds ($10K for me , and $10K for DW). The treasury direct site says they are paying a total of 1.68% for the next 5.75 months.
That is: 0% plus inflation rate.

This suggests to me, that a regular CD at 1% is less than inflation, which sucks...

My Question is: Does it matter when in the month I buy the I-bond ?, as in do they earn daily interest or not.
__________________
Fortune favors the prepared mind. ... Louis Pasteur
Sunset is offline  
Old 11-07-2020, 05:01 PM   #830
Thinks s/he gets paid by the post
 
Join Date: Jul 2013
Posts: 1,549
Quote:
Originally Posted by Sunset View Post
I'm thinking about buying some I-bonds ($10K for me , and $10K for DW). The treasury direct site says they are paying a total of 1.68% for the next 5.75 months.
That is: 0% plus inflation rate.

This suggests to me, that a regular CD at 1% is less than inflation, which sucks...

My Question is: Does it matter when in the month I buy the I-bond ?, as in do they earn daily interest or not.
I've been buying the max each year for the last 7-8 years.

Buy them at the end of the month. Interest is earned at the end of the month, and you get credit for the entire month regardless of when you buy them.
mrfeh is offline  
Old 11-07-2020, 06:42 PM   #831
Recycles dryer sheets
 
Join Date: Jan 2008
Posts: 379
Quote:
Originally Posted by Sunset View Post
I'm thinking about buying some I-bonds ($10K for me , and $10K for DW).

My Question is: Does it matter when in the month I buy the I-bond ?, as in do they earn daily interest or not.
They get credited interest on the first day of the month for the previous month. From Treasury Direct......
*******************************************
When are earnings added to the I bond?
I bonds increase in value on the first day of each month, and interest is compounded semiannually based on each I bond's issue date. An I bond's issue date is the month and year in which full payment for the bond is received.
************************************************
So you buy them near the end of the month, but don't wait until the last day as it takes a little time to actually complete, especially the first time. I would recommend doing it about the 25th or so. When you want to cash in, do it on the first or second day of the month, as you don't earn the interest unless you hold it until the first of the next month. But when you buy them, you get a whole month of interest no matter what day you actually purchase them.

The website is not 100% user friendly, but after you figure it out, it works fine. Due to the low limits of purchasing, I would not recommend them to someone unless they are going to do it every year for several years for whatever reason to get a decent amount. I have owned some since 2001.
Dave J is offline  
Old 11-07-2020, 08:20 PM   #832
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
harley's Avatar
 
Join Date: May 2008
Location: No fixed abode
Posts: 8,425
I found a $20 bill in a parking lot a week ago. That beats the return on my savings account for the past year. I'm going to start hanging out in parking lots until rates increase.
__________________
"Good judgment comes from experience. Experience comes from bad judgement." - Anonymous (not Will Rogers or Sam Clemens)
DW and I - FIREd at 50 (7/06), living off assets
harley is offline  
Old 11-07-2020, 09:30 PM   #833
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands, TX
Posts: 16,017
Quote:
Originally Posted by harley View Post
I found a $20 bill in a parking lot a week ago. That beats the return on my savings account for the past year. I'm going to start hanging out in parking lots until rates increase.
I'm looking for change left in vending machines and collecting aluminum drink cans which have a $0.05 return per can. What cans I can't return due to damage (car ran it over), I save in a 55 gallon drum for selling to scrap dealers.

Sure beats 0.01% interest in my bank account and it only takes a few hours per day!
__________________
Everyone has a plan until they get punched in the mouth...philosopher Mike Tyson
aja8888 is offline  
Old 11-07-2020, 11:50 PM   #834
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
 
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 13,906
Thanks to mrfeh and Dave J I will plan to buy my bonds near the end of the month. It works out well, as it may take some effort to get DW onboard.

I'm planning to buy $10K each this month, and come January buy another 10K each.

One aspect I don't like, from my reading is that they don't allow to designate POD/TOD like a bank CD allows. Once the amount is over $100K they require probate before transferring the money.
Sure one can put the bond in 2 names, but that doesn't really solve the issue, and is probably not flexible to change.
__________________
Fortune favors the prepared mind. ... Louis Pasteur
Sunset is offline  
Old 11-08-2020, 07:27 AM   #835
Full time employment: Posting here.
lucky penny's Avatar
 
Join Date: Jan 2010
Location: NYC
Posts: 560
Quote:
Originally Posted by Dave J View Post
Due to the low limits of purchasing, I would not recommend them to someone unless they are going to do it every year for several years for whatever reason to get a decent amount.
Also, income tax refunds can be issued in I bonds, which are not counted towards the annual purchase limit.
lucky penny is offline  
Old 11-08-2020, 10:13 AM   #836
Thinks s/he gets paid by the post
 
Join Date: Jul 2002
Posts: 1,475
Maximum I bonds through refund is $5K.

https://www.irs.gov/refunds/now-you-...our-tax-refund
RE2Boys is offline  
Old 11-08-2020, 11:39 AM   #837
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Aug 2004
Location: Laurel, MD
Posts: 6,977
Quote:
Originally Posted by lucky penny View Post
Also, income tax refunds can be issued in I bonds, which are not counted towards the annual purchase limit.
That seems like a significant (beneficial) loophole if this is an extension of the 10k limit as lucky penny says. The 10k limit is frequently mentioned as an objections to ibonds. It should be pretty easy to plan for a big refund for the explicit purpose of buying more ibonds. Will be looking into that.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
jazz4cash is offline  
Old 11-08-2020, 12:05 PM   #838
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
JoeWras's Avatar
 
Join Date: Sep 2012
Posts: 8,982
I-bond question: DW and I are jointly listed on Treasury direct.

Can I just buy 20k and call it a day? Or is there something I have to do with the registration? I've previously stopped at 10k each year.
__________________
Retired Class of 2018


JoeWras is online now  
Old 11-08-2020, 12:31 PM   #839
Recycles dryer sheets
 
Join Date: Jan 2008
Posts: 379
Quote:
Originally Posted by JoeWras View Post
I-bond question: DW and I are jointly listed on Treasury direct.

Can I just buy 20k and call it a day? Or is there something I have to do with the registration? I've previously stopped at 10k each year.
I think 1 set in your SS number of 10k and 1 set in her SS number in 10K is how you have to do it.
Dave J is offline  
Old 11-08-2020, 12:36 PM   #840
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
JoeWras's Avatar
 
Join Date: Sep 2012
Posts: 8,982
Quote:
Originally Posted by Dave J View Post
I think 1 set in your SS number of 10k and 1 set in her SS number in 10K is how you have to do it.
Ah, so the account I log onto is probably in my SS # "WITH DW." I'd have to get her a log in (she doesn't really like this stuff), and have her buy an I-bond from that account "WITH ME."

That makes sense that the primary name SS # is the limiting factor.
__________________
Retired Class of 2018


JoeWras is online now  
Closed Thread


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Best CD & MM Rates Thread 2019 - Please post updates here almost there FIRE and Money 929 01-01-2020 11:09 AM
Noticed more people holding signs "need work or food" rayinpenn Other topics 3 05-03-2015 02:51 PM

» Quick Links

 
All times are GMT -6. The time now is 07:12 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2022, vBulletin Solutions, Inc.