Best CD, MM Rates & Bank Special Deals Thread 2024 - Please post updates here

[stephenson]

Got it, thanks ... an additional selection was needed ... not quite as intuitive as I expected. I bought the 5.7% 9 month.

 

[RetiredAndLovingIt]

Hi, again!

Set up EFT at Fidelity and transferred some funds to NASAFCU - can "see" the funds online with NASAFCU.

What I can't see is a way to move those funds into CDs ... am I missing something? Please don't tell me I have to call them to do this? Aack ...

When I transferred my IRA funds the paperwork included instructions on what CD's I wanted to open. I have not had after tax funds there in a long time though. Just call them, I called yesterday and she set up a new HSA CD for me in less than 5 minutes and e-mailed over a receipt.
Easy peasy.

 

[Chuckanut]

The past few CD’s that matured have been lower rate ones from my early ladder building.

Today, for the first time since this dip in rates started, I purchased a replacement CD that was yielding less than the one that recently matured.

Note. I am not counting an agency bond that was called since it did not mature.

 

[Earl E Retyre]

I just purchased two CDs. One was a 5.5% 15 month Synchrony Bank CD and the other was a Vanguard brokered secondary market 5.5 year CD at 4.44%.

 

[jazz4cash]

4.44% for 5 yrs sounds pretty good. What is the call provision?

 

[jim584672]

US Senate FCU

36 month
$200,000 Plus Jumbo 5.34% 5.20%
$100,000 -$199,999 5.28% 5.15%
less than $99,999 5.23% 5.10%

180 day penalty for early withdrawal.

 

[Earl E Retyre]

4.44% for 5 yrs sounds pretty good. What is the call provision?

Up until recently, I have only been buying new and noncallable CDs mostly at 5 years. However, in my IRA accounts in Vanguard and Fidelity today the best rate I could find for new/noncallable 5 year CDs is 3.9%.

So, I decided to look into secondary market callable CDs that have a yield to maturity at 4.4% or above and a coupon at 3.25% or below. The logic being that they would be unlikely to be called with a lower coupon. So, while they are immediately callable, I am assuming they will not be unless and until rates fall below 3.25%. If they do get called, it is a low percentage of my fixed income and I still get the 4.4% return.

I wound up buying 2 CDs this week:
(1) Wells Fargo CD 3% coupon with a YTM 4.44 (matures 6/26/2029)
(2) JP Morgan CD 3.25% coupon with a YTM 4.468 (matures 10/29/2030)

In my non-IRA accounts, I am buying shorter term noncallable CDs at above 5% at banks that I already have accounts with. This week, I bought a couple of the 15 month Synchrony Bank 5.5% CDs.

 

[jazz4cash]

Thanks. I like the low coupon high discount strategy.

 

[pb4uski]

A similar strategy is useful with callable agency bonds.

One thing that I learned recently is to look at the details on corporate callables, especially for non-financial institutions... while the header migh say they are callable in a lot of instances the first call is just a few months before maturity so it isn't a big deal... for me it is effectively non-callable if a Dec 2028 maturity is callable in Jul 2028.

 

[Trooper]

In my non-IRA accounts, I am buying shorter term noncallable CDs at above 5% at banks that I already have accounts with. This week, I bought a couple of the 15 month Synchrony Bank 5.5% CDs.

That's a good rate but I don't like having lots of accounts. Is Synchrony one worth having? IOW do they often have good rates?

 

[audreyh1]

That's a good rate but I don't like having lots of accounts. Is Synchrony one worth having? IOW do they often have good rates?

Of the three online banks plus 1 FCU I have, Synchrony almost always has the best rates and raises them more aggressively.

 

[John Galt III]

My CDs at Penfed just matured yesterday. I kept the money there, got some 5 year at 4.0 % and some 15 month at 5.0 %. Thought about opening a NASA account, for the higher rates, but I just have too may places already, lol.

 

[MJ]

I brought this up once before about the very good rates at United States Senate credit union but got no reaction so I'll do it one more time. I joined over 5 years ago so I don't remember how I joined but I believe it was pretty easy. They have better rates the ones that have been quoted for 3-5 years. The rates change at the beginning of the month.

 

[teej1985]

Does USSFCU still let you fund with credit card? They didn't like my ChexSystems report the last time I tried to apply to their CU.

 

[jim584672]

I brought this up once before about the very good rates at United States Senate credit union but got no reaction so I'll do it one more time. I joined over 5 years ago so I don't remember how I joined but I believe it was pretty easy. They have better rates the ones that have been quoted for 3-5 years. The rates change at the beginning of the month.

To join you need to join the AMERICAN CONSUMER COUNCIL which is easy.

 

[jazz4cash]

One thing that I learned recently is to look at the details on corporate callables, especially for non-financial institutions... while the header migh say they are callable in a lot of instances the first call is just a few months before maturity so it isn't a big deal... for me it is effectively non-callable if a Dec 2028 maturity is callable in Jul 2028.

I like to sort on the ‘next call date’ column to search these out. Haven’t gotten around to setting up a search profile for this plus I’m afraid I might filter out something good.

 

[BrianB]

I understand the strategy of buying a lower coupon rate CD from the secondary market at below par. It's much less likely to be called if rates start to drop, while still giving a greater total return.

If I do this then is the difference between my purchase price and redemption value considered a capital gain? If so, LT or ST?

If it's a ST gain that would make this strategy much better in an IRA, either Roth or traditional, right?

BrianB

 

[jazz4cash]

LT vs ST treatment depends on how deeply discounted the bond is and time to maturity. It’s called the de minimus threshold. Buying in an IRA mitigates the issue but Roth really is the way to go

 

[Earl E Retyre]

Today I purchased another secondary market brokered CD on Vanguard. I got a 5 year Morgan Stanley CD that has a 4.8% YTM/YTW and a coupon of 4.7% but is not callable until Dec 2026. So, while I fully expect it to get called, it still gives me a guaranteed 4.8% rate for 3 years with some potential of having that rate for all 5 years under the off-chance it does not get called. As a side benefit, in my 5 year ladder, I was heavy in all years other than 2026 so it serves the purpose of evening out my ladder as well (if it does indeed get called).

BTW, in the details of the CD it has the words "make whole" which was set to "no". I am not sure what that means, but since Vanguard indicates that the yield to worst is 4.8% whether it matures or gets called, I am not too worried. I think all the CDs may say this. But I just noticed it today. When I googled what it meant, it still was not clear to me.

 

[pb4uski]

^^^ I think this is the way that the make whole works (but not in your case since it said "no").

Say you buy a $10,000 5-year 3.5% callable CD.

After 3 years the issuer calls it and at the time interest rates for 2-year CDs are 2%.

If the issuer had not called the CD then at the end of 5-years you would have received $11,877 [10,000*(1+3.5%)^5].

At the current interest rate of 2% that you would reinvest the call proceeds in, in order to have $11,877 at the end of two years you would need to receive $11,416 today [(11,877/(1+2%)^2].

The CD with accrued interest is currently $11,087 [($10,000*(1+3.5%)^3].

So when the CD is called the issuer pays you $10,000 principal, $1,087 of accrued interest and a $329 make-whole call penalty for a total of $11,416.

You reinvest the $11,416 for 2 years at 2% and at the end of 2 years have $11,877... the same as if the issuer had not called the CD... so you have been "made whole".

 

[Earl E Retyre]

^^^ I think this is the way that the make whole works (but not in your case since it said "no").

Say you buy a $10,000 5-year 3.5% callable CD.

After 3 years the issuer calls it and at the time interest rates for 2-year CDs are 2%.

If the issuer had not called the CD then at the end of 5-years you would have received $11,877 [10,000*(1+3.5%)^5].

At the current interest rate of 2% that you would reinvest the call proceeds in, in order to have $11,877 at the end of two years you would need to receive $11,416 today [(11,877/(1+2%)^2].

The CD with accrued interest is currently $11,087 [($10,000*(1+3.5%)^3].

So when the CD is called the issuer pays you $10,000 principal, $1,087 of accrued interest and a $329 make-whole call penalty for a total of $11,416.

You reinvest the $11,416 for 2 years at 2% and at the end of 2 years have $11,877... the same as if the issuer had not called the CD... so you have been "made whole".

Wow! Thanks for that explanation. I think I follow it. So, it sounds like Make Whole is a good thing. But the CD I bought says make whole is set to "no". However, Vanguard lists the Yield to Worst as 4.8%. So I think I am still good since I am happy with a 4.8% guarantee (whether it is called or not). But, if Make Whole would have been set to yes, then presumably I could make even more than 4.8%. Let me know if you disagree.

 

[pb4uski]

Wow! Thanks for that explanation. I think I follow it. So, it sounds like Make Whole is a good thing. But the CD I bought says make whole is set to "no". However, Vanguard lists the Yield to Worst as 4.8%. So I think I am still good since I am happy with a 4.8% guarantee (whether it is called or not). But, if Made Whole would have been set to yes, then presumably I could make even more than 4.8%. Let me know if you disagree.

If you had bought it as a new issue then you would make the coupon or stated interest rate for the entire original term if it was called with a make whole. Yes, make-whole is a good thing compared to nothing.

If you buy it as a secondary issue then I don't think that would necessarily hold but I suspect that if there was a make-whole that it would be included in the WTC calculation... not sure how though.

 

[njhowie]

Snagged two month secondary market CD yesterday - 18% YTM! Yes, only two months, but compare to new issue two month going for ~5.1% and what could be bad?

I was waiting the remainder of the day for Fidelity to call and tell me they were reversing it due to a pricing mistake, but that call never came.

 

[jazz4cash]

Wow. Nice catch. I know it happened before but it didn’t register that they actually called you until I pictured you sitting by the phone waiting. I’m seeing the guy from Better Call Saul but he wanted it to ring.

 

[Earl E Retyre]

Snagged two month secondary market CD yesterday - 18% YTM! Yes, only two months, but compare to new issue two month going for ~5.1% and what could be bad?

I was waiting the remainder of the day for Fidelity to call and tell me they were reversing it due to a pricing mistake, but that call never came.

Yeah, but what are you gonna do when it matures in two months and you cannot find a rate over 17%?