Best CD, MM Rates & Bank Special Deals Thread 2022 - Please post updates here

[Freedom56]

I misspoke. Is there any NAV that you would consider selling early? Say the price of the bonds went up to 150. Would you sell?

The most I could earn with a 5% 5 year note is $25K over the 5 year term plus 100% of my capital returned. If bond fund were to drive a callable bond up to $110 in the near term, I would sell and move onto something else.

 

[Dtail]

So the "premium" designation refers to the account minimum and possibly the paper held in the fund? There are prime MM funds with lower minimums.

I have had VUSXX, the Vanguard treasury MM fund for probably 25 years. If I recall, the minimum used to be higher. When they moved from treasury-only to a broader range of treasury investments, I moved the bulk of the account to Fidelity, despite the higher expenses. I have 2008 burned in my brain, which affected my concept of security.

Vanguard only has government MM funds. No commercial paper. Interesting...

It seems to make sense to move money into the higher paying Vanguard funds, as they are equal to nearly equal in return to the Fidelity premium fund. Am I missing something?

Huh? How are the Vanguard funds higher paying, but also equal or nearly equal to the Fidelity fund?
Years ago, the expenses on the Vanguard MM fund were lower and the yield higher.
Fidelity is now similar or even lower in ER expenses on many of their funds, as compared to Vanguard.

 

[GenXguy]

Huh? How are the Vanguard funds higher paying, but also equal or nearly equal to the Fidelity fund?
Years ago, the expenses on the Vanguard MM fund were lower and the yield higher.
Fidelity is now similar or even lower in ER expenses on many of their funds, as compared to Vanguard.

I think it's because that nearly equal fund at Fidelity is a Prime MM fund that has a minimum $100K investment. And Fidelity's government MM funds without the large minimum initial investment requirement have less yield than Vanguard's.

 

[Another Reader]

Huh? How are the Vanguard funds higher paying, but also equal or nearly equal to the Fidelity fund?
Years ago, the expenses on the Vanguard MM fund were lower and the yield higher.
Fidelity is now similar or even lower in ER expenses on many of their funds, as compared to Vanguard.

The higher paying Vanguard funds comparable in return to the multi asset Fidelity Premium fund are lower risk. The Fidelity Premium fund cited has exposure to a large amount of commercial paper. The expense ratios on the Fidelity and also the Schwab money market funds are much higher than the Vanguard expense ratios when you compare by the instruments held in the funds. That largely accounts for the difference in yield.

 

[Montecfo]

CFG bank MM fund now up to 1.65 percent. it is rising rather quickly.

 

[Graybeard]

I was going to buy a 26 week T bill this week at Vanguard but out of curiosity I looked at the CDs. I don't understand some things I saw.

The 1-3 month CDs are paying between 1.7% and 1.8%. That is more than the 3 month T bill (currently estimated at 1.65% on Tuesday 7/5). I looked at the 1.8% CD, it is from Wells Fargo Natl Assn. There was a lot of issues with Wells Fargo over the past year, is their CD best avoided? Also that CD says Conditional Puts Death of Holder FDIC #3511. What does Condition Puts mean?

All things being equal, which perhaps they aren't which is why I am asking, the CD even at 1.7% looks better than the T bill.

I also looked at the 4-6 month CDs, they are paying 1.7% to 2.15% but the 6 month T bill (currently estimated at 2.458% on Tuesday 7/5) is a much better rate. I guess you need to look at these and not assume just cuz the 3 month Cds have a better rate that the 6 month Cds will also vs the corresponding T bills.

I never would have considered a CD, Treasuries have been rising with better rates so I'm wondering if the CD (3 month) doesn't make more sense than the 3 month T bill. Is there a lag in getting the CD money at maturity vs the T bill. T bills get to the settlement fund in a couple of days but no idea if Cds are the same.

Mods - If this is too much and should be a new post, I can do that.

 

[Chuckanut]

I have a CD/T-bill ladder I recently built.

Some steps are built on Treasury bills and notes. Others are built on CD's. It all depended on which gave me the highest yield. At the time I built it for example, my 18 month CD was 3.05% vs about 2.9% for the Treasury note with 18 months left on it.

Since both are guaranteed by the Feds, and I don't have to pay state income tax on the interest, it's not a big deal.

What is a big deal is that inflation is still hammering these rates. Not much I can do about that at the moment other than to keep the powder dry and wait for preparation to meet opportunity. IOW, what we call 'luck'.

 

[NomDeER]

Some steps are built on Treasury bills and notes. Others are built on CD's. It all depended on which gave me the highest yield. At the time I built it for example, my 18 month CD was 3.05% vs about 2.9% for the Treasury note with 18 months left on it.

Is there some difference as a result of compounding interest? I've been wondering how much more the treasury bills really pay compared to CDs or money market funds or savings accounts that have compound interest. I am not very experienced with these issues, so don't really know.

 

[jim584672]

Is there some difference as a result of compounding interest? I've been wondering how much more the treasury bills really pay compared to CDs or money market funds or savings accounts that have compound interest. I am not very experienced with these issues, so don't really know.

Easy way to check, add up all the coupons from the CD. T-Bill has a set value and returns to full face, so you know how much you will be getting between now and maturity. Compare the two amounts.

 

[JoeWras]

Or if you like math: https://bogleheads.org/forum/viewtopic.php?p=6741068#p6741068

 

[Dash man]

Synchrony Bank HYS is paying 1.4%

 

[Drake3287]

I also looked at the 4-6 month CDs, they are paying 1.7% to 2.15% but the 6 month T bill (currently estimated at 2.458% on Tuesday 7/5) is a much better rate. I guess you need to look at these and not assume just cuz the 3 month Cds have a better rate that the 6 month Cds will also vs the corresponding T bills

Do you really only need a 3 or 4 month CD? Capital One has a 2.50% CD for 18 months. Do the math and see if the early withdrawal penalty still makes it a wiser choice.

 

[audreyh1]

Synchrony Bank HYS is paying 1.4%

Wow, alright!

I often use this savings to hold cash for my brokerage account.

 

[Another Reader]

Yeah, Ally is really annoying now. Probably going to pull most of the remaining cash there and move it somewhere more responsive to rate increases. Several good choices!

 

[Earl E Retyre]

Synchrony Bank HYS is paying 1.4%

Thanks for this. I have both Synchrony and Ally bank savings accounts but have a lot more in Ally. They historically maintained the same rates. I am going to transfer all of my Ally to Synchrony since 1% vs 1.4% is a huge difference.

 

[daver]

Yeah, Ally is really annoying now. Probably going to pull most of the remaining cash there and move it somewhere more responsive to rate increases. Several good choices!

Agree, the 11 month NP CD is still at 1% same as the savings for over a week now.

 

[Freedom56]

Fidelity is offering a 1 year 3.75% note that pays monthly rated A3/A

CITIGROUP GLOBAL MKTS HLDGS IN SER N
3.75000% 07/20/2023 MTN

CUSIP 17330PSX8
ISIN US17330PSX86
SEDOL --
Pay Frequency MONTHLY
Coupon 3.750
Maturity Date 07/20/2023
Moody's Rating A3
S&P Rating A
Issuer Events NO
Survivor Option NO
Bond Type Corporate Note
Sector FINANCE (NON-BANK)
Interest Accrual Date 07/20/2022

 

[wrigley]

Yeah, Ally is really annoying now. Probably going to pull most of the remaining cash there and move it somewhere more responsive to rate increases. Several good choices!

I sent them an email about their rates. They nicely blew me off!

Mike

 

[Another Reader]

I sent them an email about their rates. They nicely blew me off!

Mike

Time to move!

 

[calmloki]

Was going to mention how very good Ally has been for wire transfers and serving as a hub for moving money around. Still feel that way, especially compared to T-Mobile Money, which is just the weirdest bank/not bank going. BUT Tmobile had 1% interest, so we parked some cash with them. Now I plan to shift that Tmobile money to Synchrony Bank, 'cause 1.4% and I've heard of Synchrony as a real bank. Keeping Ally though. Much to be said for 24/7 access too.

 

[Chuckanut]

IIRC, Vanguard's Federal MM fund is now about 1.4%.

 

[aja8888]

I'm sticking with Ally because both my EFTPS and Treasury Direct accounts are linked to Ally.

 

[audreyh1]

Ally just raised theirs to 1.15%.

 

[Another Reader]

Ally just raised theirs to 1.15%.

I pulled all except a couple of thousand out of Ally this morning. This bit will probably go to Vanguard's Federal MM at 1.42 percent for now. It's also their settlement fund. Fido's premium MM is at 1.40 with $100k minimum with a sizeable portion in financial company paper.

 

[Dtail]

Still keeping some funds at Ally for emergency monies with ease of transfer, etc.