|
|
01-23-2019, 02:13 PM
|
#1
|
Full time employment: Posting here.
Join Date: Apr 2015
Posts: 575
|
CD Interest Payments
I thought of this yesterday after walking out of my bank while reinvesting a CD. It used to be (year's ago) that banks and S&L gave you the option of having the monthly interest paid out by check or possibly into a second account such as a checking.
Do banks still offer paying monthly interest in cash (check, etc) each month or is it only available by reinvesting now? Been years since I've had them cut me a monthly check.
|
|
|
|
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!
|
01-23-2019, 02:33 PM
|
#2
|
Confused about dryer sheets
Join Date: Jun 2010
Posts: 8
|
Penn Federal is sending a monthly check. Just opened 5 year cd at 3.5
|
|
|
01-23-2019, 03:18 PM
|
#3
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,015
|
Quote:
Originally Posted by Drake3287
I thought of this yesterday after walking out of my bank while reinvesting a CD. It used to be (year's ago) that banks and S&L gave you the option of having the monthly interest paid out by check or possibly into a second account such as a checking.
Do banks still offer paying monthly interest in cash (check, etc) each month or is it only available by reinvesting now? Been years since I've had them cut me a monthly check.
|
Most banks and credit unions I deal with give you the option of receiving the interest monthly/quarterly instead of reinvesting it in the CD.
__________________
Retired since summer 1999.
|
|
|
01-23-2019, 03:31 PM
|
#4
|
Recycles dryer sheets
Join Date: Jul 2013
Posts: 385
|
I have CDs with three online banks and four local banks and they electronically send the interest to an account of my choice each month without fee.
|
|
|
01-23-2019, 04:23 PM
|
#5
|
Full time employment: Posting here.
Join Date: Aug 2013
Location: New Jersey
Posts: 910
|
It depends on the bank/credit union CD terms.
|
|
|
01-23-2019, 04:58 PM
|
#6
|
Thinks s/he gets paid by the post
Join Date: Mar 2004
Posts: 2,341
|
Quote:
Originally Posted by LarryL
Penn Federal is sending a monthly check. Just opened 5 year cd at 3.5
|
Unless you have a special circumstance, the rate is down to 3.35%APY since the 18th.
__________________
I look to the present moment because that's where I live my life.
|
|
|
01-23-2019, 08:20 PM
|
#7
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2004
Location: Laurel, MD
Posts: 8,309
|
In the case of brokered CDs, I think you cannot reinvest the interest in the CD.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
|
|
|
01-23-2019, 09:20 PM
|
#8
|
Recycles dryer sheets
Join Date: Nov 2013
Posts: 238
|
Brokered cd interest cannot be reinvested. Also, to get the actual APY% advertised (as opposed to the APR), you must reinvest - as I believe that the advertised yield is only obtained by compound interest.
|
|
|
01-23-2019, 09:34 PM
|
#9
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,015
|
Quote:
Originally Posted by Debinnov a
Brokered cd interest cannot be reinvested. Also, to get the actual APY% advertised (as opposed to the APR), you must reinvest - as I believe that the advertised yield is only obtained by compound interest.
|
Good point about not getting the full advertised CD rate if you don’t reinvest the interest payments back into the CD.
__________________
Retired since summer 1999.
|
|
|
01-23-2019, 10:28 PM
|
#10
|
Full time employment: Posting here.
Join Date: Apr 2015
Posts: 575
|
Thanks for the responses, it looks like I'll have to look into getting the interest payment directly. Having a few high balance CD's I don't really need to be investing anymore cash.
Time to take the money and enjoy it.
|
|
|
01-23-2019, 11:41 PM
|
#11
|
Recycles dryer sheets
Join Date: Apr 2005
Posts: 114
|
Quote:
Originally Posted by Debinnov a
Brokered cd interest cannot be reinvested. Also, to get the actual APY% advertised (as opposed to the APR), you must reinvest - as I believe that the advertised yield is only obtained by compound interest.
|
Quote:
Originally Posted by audreyh1
Good point about not getting the full advertised CD rate if you don’t reinvest the interest payments back into the CD.
|
This is BS. Brokered CDs give the promised yield. They never advertise APY. The assumption is that the purchaser is sophisticated enough to understand the difference.
In a rising rate environment, this is to the purchasers advantage. We've been in such an environment for over a year. We may still be. It's too early to tell.
|
|
|
01-24-2019, 05:40 AM
|
#12
|
Recycles dryer sheets
Join Date: Dec 2016
Posts: 200
|
My brokered CD’s with Fidelity are reinvested.
Just opened one with Ally and they asked me which I prefer.
|
|
|
01-24-2019, 08:14 AM
|
#13
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,015
|
Quote:
Originally Posted by adrift
This is BS. Brokered CDs give the promised yield. They never advertise APY. The assumption is that the purchaser is sophisticated enough to understand the difference.
|
I was talking about CDs advertised by a bank/credit union. Drake’s question directly asked about that case.
__________________
Retired since summer 1999.
|
|
|
01-24-2019, 08:29 AM
|
#14
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2004
Location: Laurel, MD
Posts: 8,309
|
Quote:
Originally Posted by Carol1862
My brokered CD’s with Fidelity are reinvested.
Just opened one with Ally and they asked me which I prefer.
|
Are these Fidelity CD's reinvested into the CD or elsewhere? Which bank is actually issuing the CD?
I haven't actually bought any brokered CDs and Im trying to learn as much as I can about them including pros and cons of monthly vs. semi-annual interest payments.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
|
|
|
01-24-2019, 08:35 AM
|
#15
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,015
|
Brokered CDs do not automatically reinvest interest payments back into the same CD.
Fidelity will automatically reinvest the entire CD once it matures if you sign up for their autoroll program.
__________________
Retired since summer 1999.
|
|
|
01-24-2019, 10:07 AM
|
#16
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2004
Location: Laurel, MD
Posts: 8,309
|
So you choose an account to accumulate the interest payments until maturity?
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
|
|
|
01-24-2019, 10:14 AM
|
#17
|
Full time employment: Posting here.
Join Date: Apr 2015
Posts: 575
|
Quote:
Originally Posted by audreyh1
I was talking about CDs advertised by a bank/credit union. Drake’s question directly asked about that case.
|
Correct. In my case all CD's or MM are with a B&M bank or online bank. It's funny, years ago I remember banks always asking me how I wished the interest to be paid. At some point it just started to automatically be reinvested.
Just this week when I reinvested a large CD the bank never mentioned interest payments like they use to.
|
|
|
01-24-2019, 10:25 AM
|
#18
|
Thinks s/he gets paid by the post
Join Date: Jan 2018
Location: Elyria, OH
Posts: 1,937
|
Quote:
Originally Posted by jazz4cash
So you choose an account to accumulate the interest payments until maturity?
|
With brokered CDs at Schwab or Fidelity, my interest payments are deposited in the default cash component (Schwab) or core fund (Fidelity) of the brokerage account.
|
|
|
01-24-2019, 10:35 AM
|
#19
|
Full time employment: Posting here.
Join Date: May 2011
Posts: 873
|
Quote:
Originally Posted by gwraigty
With brokered CDs at Schwab or Fidelity, my interest payments are deposited in the default cash component (Schwab) or core fund (Fidelity) of the brokerage account.
|
+1
|
|
|
01-24-2019, 10:44 AM
|
#20
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,015
|
Quote:
Originally Posted by jazz4cash
So you choose an account to accumulate the interest payments until maturity?
|
Yes, at PenFed and Ally I believe they let you choose any local checking or savings account plus any external account you have linked.
Some institutions will also mail you a check, I think maybe Ally and PenFed also give this option. I shudder at the thought of receiving checks in the mail, so I never considered this option.
__________________
Retired since summer 1999.
|
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Thread Tools |
|
Display Modes |
Linear Mode
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|