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Old 01-23-2023, 08:15 PM   #121
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I think there have been unusual situations where munis have out yielded regular bonds, and in that situation tax deferred is fine.

I remember many years ago, around 2010 maybe, some high profile guru bashed muni bonds implying that they were about to implode in another 2008 type scandal. Rates were high. I loaded up. The big implosion never happened. Bunch of hot air.
Oh yeah - Meredith Witney late 2010. Probably behind paywall. https://www.nytimes.com/2011/02/08/b...08whitney.html
Not behind a paywall https://www.cnbc.com/id/44670656 and https://www.cnbc.com/id/47014123
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Old 01-24-2023, 12:33 AM   #122
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I think there have been unusual situations where munis have out yielded regular bonds, and in that situation tax deferred is fine.


I didnít think it was all that unusual but itís hard to say since muniís tend to be much longer term. In any event itís another instance where you have to do the math and investorís in higher brackets are more likely to benefit. A brother bragged to me that he was in a tax free fund but when I asked him about his tax bracket (e.g. taxable equivalent yield) he had no clue.
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Old 01-24-2023, 08:31 AM   #123
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I think there have been unusual situations where munis have out yielded regular bonds, and in that situation tax deferred is fine.
But then you just turned something that in a taxable account would have $0 in taxes due and you now made it taxable at your income rate.
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Old 01-24-2023, 08:49 AM   #124
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I think there have been unusual situations where munis have out yielded regular bonds, and in that situation tax deferred is fine. ...
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But then you just turned something that in a taxable account would have $0 in taxes due and you now made it taxable at your income rate.
But that doesn't matter... see emphasis above... in those unusual situations where munis have better yields than regular bonds all else being equal, would you refuse to buy the muni in a tax-deferred account solely because the income is tax free? You advocate buying the lower yielding regular bond? That doesn't make sense. Yield is yield.
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Old 01-24-2023, 08:55 AM   #125
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But that doesn't matter... see emphasis above... in those unusual situations where munis have better yields than regular bonds all else being equal, would you refuse to buy the muni in a tax-deferred account solely because the income is tax free? You advocate buying the lower yielding regular bond? That doesn't make sense. Yield is yield.
What if 20% -30% of your yield disappears due to taxation? Itís not strictly gross yield, but what you have net after taxes, which I will agree will vary by individual.
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Old 01-24-2023, 09:03 AM   #126
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What if 20% -30% of your yield disappears due to taxation? Itís not strictly gross yield, but what you have net after taxes, which I will agree will vary by individual.
In a tax-deferred or tax-free account, gross yield is what matters, since everything is taxable upon withdrawal.
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Old 01-24-2023, 09:22 AM   #127
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In a tax-deferred or tax-free account, gross yield is what matters, since everything is taxable upon withdrawal.
A muni is not taxable in a taxable account. That is what we are discussing.
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Old 01-24-2023, 09:26 AM   #128
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A muni is not taxable in a taxable account. That is what we are discussing.
No dispute on taxable account. Well understood. But see post 113.
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Old 01-24-2023, 09:26 AM   #129
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Old 01-24-2023, 10:01 AM   #130
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No dispute on taxable account. Well understood. But see post 113.
Ah, I see your point.
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Old 01-24-2023, 01:39 PM   #131
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PenFed is now offering CDs at 4.60% for 12 months, 4.65% for 15 months and 4.70% for 18 months. $1000 minimum.
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Old 01-24-2023, 02:05 PM   #132
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Chase is offering a checking & savings bonus worth up to $900. Bonus is as follows:
Receive a bonus of $300 when you open a Chase Total checking account and have a direct deposit post to the account within 90 days.
Receive a bonus of $200 when you open a Chase savings account and deposit $15,000 or more in new money within 30 days and maintain a balance of $15,000 for 90 days.
Receive an extra $400 bonus when you complete both of the above bon
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Old 01-24-2023, 02:25 PM   #133
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Highest CD rate "today" at Schwab is 4.75 for a 1yr.
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Old 01-24-2023, 02:48 PM   #134
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Highest CD rate "today" at Schwab is 4.75 for a 1yr.
14 1/2 and 15 month at Fidelity 4.85%
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Old 01-24-2023, 03:57 PM   #135
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Navy Federal CU 15 mo CD, 5% APY AND, they will cash in existing CD's with no EWP to convert to this higher yielding CD. We had a Navy FCU CD yielding 3.45% APY due in July of 24. Converted to the 5% due 4/22/24, via a Sunday phone call. Annual increase in income on this transaction is $930.
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Old 01-24-2023, 04:25 PM   #136
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Hopefully after the next FED increase in Feb. we will see a few 5% CDs at Schwab for around 2 years. I do not see rates going down for at least another year. I am trying to consolidate our stash with one broker. I will move it all to Fidelity if I have to.
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Old 01-24-2023, 04:38 PM   #137
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^^^^^
I'd expect all the majors to be extremely competitive and I seriously doubt their brokered CD offerings will vary more than .25% per maturity term between them. And probably .1% or less...

An extra .25% on each 100k CD for 1yr would get you $250 before tax. Of course even less for <.25

Honestly not enough for me to move my money between brokers, unless maybe the accounts were already established and linked, but YMMV. But I too would like to see the magical 5% CD offered for any term length.
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Old 01-24-2023, 06:17 PM   #138
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^^^^^
I'd expect all the majors to be extremely competitive and I seriously doubt their brokered CD offerings will vary more than .25% per maturity term between them. And probably .1% or less...

An extra .25% on each 100k CD for 1yr would get you $250 before tax. Of course even less for <.25

Honestly not enough for me to move my money between brokers, unless maybe the accounts were already established and linked, but YMMV. But I too would like to see the magical 5% CD offered for any term length.
I think everything is baked in at this point. Fed rates have continued higher and we've already seen peak CD rates at the brokerages maybe 3 or 4 months ago. Retail banks and credit unions may offer specials here and there, but in general, I wouldn't be expecting any kind of significant move higher in CD rates.
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Old 01-24-2023, 06:19 PM   #139
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^^^^
IMO, CD's still have another > 1/4 to 1/2 point to go over the next 6 to 9 mos and then peak out... But that should be about it unless more SHTF.
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Old 01-25-2023, 09:26 AM   #140
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PenFed is now offering CDs at 4.60% for 12 months, 4.65% for 15 months and 4.70% for 18 months. $1000 minimum.
Interesting. I am surprised they went up that much. I had thought they topped out. Might have to chow down on the 18 month 4.7% to fill a rung in my ladder.
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