Best CD, MM Rates & Bank Special Deals Thread 2023 - Please post updates here

[audreyh1]

If this interest rate drop stays at current levels or goes lower, our money market fund rates will start to drop.

 

[ShokWaveRider]

Jumped into a 5.4% 18 Month CD with $200k today to start my ~2-3 year ladder. Settles tomorrow. Now waiting till after March 23rd. unless something interesting pops up between now and then.

 

[audreyh1]

I suppose banks are suddenly interested in shoring up their deposits. What a difference with CDs suddenly jumping ahead of treasuries.

 

[foxcreek9]

If you are closing a no penalty to upgrade to a newer CD you would likely want the whole amount withdrawn anyway.

Be aware that Ally still imposes a 6 transaction limit per monthly statement cycle on withdrawals from their savings accounts. You can run into this limit if you do a bunch of CD transactions in one month. For this reason I opened up a checking account (no limits) a few years ago.

I think they are still refunding the fee. Another trick is to create multiple savings account with them, each with it's own limit.

 

[audreyh1]

I think they are still refunding the fee. Another trick is to create multiple savings account with them, each with it's own limit.

Oh, I didn’t know about refunding the fee. But I don’t know why they didn’t drop the transaction limit when the Fed did, or at least increase the limit to like 10 or so. RegardlessI have the checking account which usually just has $100 sitting in it but comes in handy when upgrading CDs.

BTW since their money market account is now paying higher interest than the savings, that’s another option.

I found this:

About the Transaction Limit

Federal law permits limiting certain types of withdrawals and transfers from savings and money market accounts to a combined total of 6 per statement cycle. These limited transactions include things like Online and Mobile Banking transfers from your account to any of your accounts with us, or to a third party and, if checks and debit cards are allowed on the account, check and point-of-sale transactions.

Previously, there was a $10 excessive transaction fee for each transaction that exceeded this limit. However, due to federal regulation changes, we’re currently not applying limits, and are temporarily refunding fees associated with such withdrawals and transfers.

Other transactions are also unlimited. For example, you can make as many deposits as you like, and you can call us any time to request a check made out to you. With a Money Market Account, you can make unlimited ATM withdrawals.

So basically it’s a non-issue. They tell you there is a limit, but they don’t penalize you for exceeding it. Good to know. I learn all sorts of important details here!! Thanks!

 

[Freedom56]

4-5 year non-callable CDs yielding 5% have sold out now at TDA and Fidelity. Rates will likely reset much lower for CDs given how much treasury yields have dropped.

 

[pb4uski]

I suppose banks are suddenly interested in shoring up their deposits. What a difference with CDs suddenly jumping ahead of treasuries.

Yes, they seem to go back and forth... at times CDs are more attractive and at times Treasuries are... and at times even agency bonds are more attractive even after considering call risk. The ebb and flow is interesting but CDs are certainly dominant for now.

 

[Freedom56]

CDs and retail notes are priced 7-10 days in advance (i.e. before the SVB, SBNY debacle). So you are seeing these 5%+ yield CDs and 6% yield notes appearing. It won't last as rates will reset. The Fed is not likely to raise rates next week. Too much money is flowing out of smaller banks to the large "to big to fail banks". If the ECB raises rates tomorrow, they will likely cause a market crash.

 

[jldavid47]

Be aware that Ally still imposes a 6 transaction limit per monthly statement cycle on withdrawals from their savings accounts.

Federal regulation D. It was suspended in 2020 due to the pandemic and banks were given the option whether to enforce the limit or not (or even enforce something higher than 6). The reason for its existence is that savings accounts are not "transactional accounts" unlike checking accounts and has been around to help prevent bank runs. Whether it actually serves that purpose is up for debate.

If you want the gory detail about Regulation D you can find it here:

https://www.federalreserve.gov/supervisionreg/regdcg.htm

 

[Dash man]

Just picked up a Schwab 5.4% CD for 18 months in my Schwab Roth IRA.

 

[ShokWaveRider]

Just picked up a Schwab 5.4% CD for 18 months in my Schwab Roth IRA.

As I did earlier A great deal me-thinks.

 

[jim584672]

Busy day for me, dumped more Treasuries and went to the 2 year AmEX, Discover Bank 5.25% CDs. Also some CDs that mature at the end of the year at 5.3% and 5.35%

 

[copyright1997reloaded]

4-5 year non-callable CDs yielding 5% have sold out now at TDA and Fidelity. Rates will likely reset much lower for CDs given how much treasury yields have dropped.

In a weird way, sort of glad to see them gone as I am out of money to put into them.

Eventually I will have T-Bills rolling off (at which point I will be cussing the lower rates), but for now just smiling.

 

[Another Reader]

In a weird way, sort of glad to see them gone as I am out of money to put into them.

Eventually I will have T-Bills rolling off (at which point I will be cussing the lower rates), but for now just smiling.

I dunno. There are still a lot of banks out there that need to raise deposits. First Republic is offering 4.9 percent on an 11 month CD in Northern California in branch.

 

[copyright1997reloaded]

I dunno. There are still a lot of banks out there that need to raise deposits. First Republic is offering 4.9 percent on an 11 month CD in Northern California in branch.

Now when I see 5.7% non-callable 1/2/3 year CD's being offered it will burst my bubble. Unless it happens right about when my bunches of 6-month T-Bills start maturing (May-June-July)

 

[Spock]

I dunno. There are still a lot of banks out there that need to raise deposits. First Republic is offering 4.9 percent on an 11 month CD in Northern California in branch.

But with rates dropping what sense does it make for a bank to bring in high yielding $ when the loan margins are shrinking. It's just setting up for the reverse problem of paying out big % on short duration and lending lower on long duration.

 

[dmpi]

Just picked up a Schwab 5.4% CD for 18 months in my Schwab Roth IRA.

I just looked and now they're gone. We must of all bought them out!

 

[Chuckanut]

Best CD, MM Rates & Bank Special Deals Thread 2023 - Please post updates here

I just looked and now they're gone. We must of all bought them out!

This just in from the Associate Press:

Early Retirement website participants corner market on 5+% CDs. FBI looking at illegal conspiracy, racketeering, and violations of RICO statutes. [emoji32]

 

[aja8888]

This just in from the Associate Press:

Early Retirement website participants corner market on 5+% CDs. FBI looking at illegal conspiracy, and violation of RICO statutes. [emoji32]

Good thing we all use aliases around here!

 

[Dash man]

This just in from the Associate Press:

Early Retirement website participants corner market on 5+% CDs. FBI looking at illegal conspiracy, racketeering, and violations of RICO statutes. [emoji32]

Oh no! Not again!! [emoji31]

 

[Freedom56]

This just in from the Associate Press:

Early Retirement website participants corner market on 5+% CDs. FBI looking at illegal conspiracy, racketeering, and violations of RICO statutes. [emoji32]

Some of us are are trying to help those mid size banks with their liquidity issues. It's called investment altruism.

You can still ladder out 1-4 years at 5%+ with non-callable CDs.

 

[copyright1997reloaded]

But with rates dropping what sense does it make for a bank to bring in high yielding $ when the loan margins are shrinking. It's just setting up for the reverse problem of paying out big % on short duration and lending lower on long duration.

Banks can treat their loans (assets) as HTM (hold to maturity), but if they are forced to sell them because their deposits (liabilities) are leaving (e.g. to chase those high T-Bills and competitive bank MM/CD rates), then they would be forced to change the designation from HTM to a mark-to-market accounting (AFS, available for sale). If those assets (i.e. loans and investments from the bank) were made at now below market rates, their fair market value is lower than what is recorded using HTM.

Thus, by increasing "sticky" deposits (CDs), the bank can stave off or forgo the exodus of checking/savings deposits, thus pushing out or eliminating the need to change asset designations from HTM to AFS.

ETA: Two banks are walking in the woods when they see a bear. The one bank says to the other "Let's run, there's a bear!". The second bank whacks the first bank in the knee with a rock, causing him to fall on the ground. The first bank says "Why did you do that!!". The second bank replies, "I don't have to outrun the bear, I just need to outrun you!".

ETA 2: Also, on a serious note. By getting CD's, the bank can increase its liability duration (deposits) to better match its assets (loans and investments) duration.

 

[dmpi]

Some of us are are trying to help those mid size banks with their liquidity issues. It's called investment altruism.

Let me help you, help me.

 

[explanade]

I thought banks did better with rising rates.

Maybe that was more when rates were rising as were home sales, so they could tack on more margin n those rates.

Not when going from essentially zero to around 6% within a year or two.

 

[audreyh1]

I thought banks did better with rising rates.

Maybe that was more when rates were rising as were home sales, so they could tack on more margin n those rates.

Not when going from essentially zero to around 6% within a year or two.

Not with an inverted yield curve I think.