Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
is now the time for 5 year cd?
Old 08-09-2022, 06:38 AM   #1
Thinks s/he gets paid by the post
 
Join Date: Jan 2010
Location: dubuque
Posts: 1,019
is now the time for 5 year cd?

I am seeing cd/s at 3.95 for 5 years. Do you folks think this is where it will stop or will there be further increases? I don't know what to think with the fed commenting about not being as aggressive in the upcoming meetings. what do you think? thanks

frank
frank is online now   Reply With Quote
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!

Old 08-09-2022, 06:43 AM   #2
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands, TX
Posts: 16,028
Quote:
Originally Posted by frank View Post
I am seeing cd/s at 3.95 for 5 years. Do you folks think this is where it will stop or will there be further increases? I don't know what to think with the fed commenting about not being as aggressive in the upcoming meetings. what do you think? thanks

frank

Sit tight, Frank, higher rates are coming.

Heck, I got 3.1% on a one year brokered CD this month at Schwab.
__________________
Everyone has a plan until they get punched in the mouth...philosopher Mike Tyson
aja8888 is offline   Reply With Quote
Old 08-09-2022, 06:58 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2016
Posts: 5,310
My answer for most individual fixed income instruments is to ladder them and then stay true to the strategy of reinvesting maturing notes on the long end and enjoy life.
A ladder is a great hedge against interest rate risk and it eliminates having to guess. Rates on the intermediate/long end can drop just as easily as they go up. No one knows the future.
COcheesehead is offline   Reply With Quote
Old 08-09-2022, 07:02 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2003
Location: Florida's First Coast
Posts: 6,121
I would say wait until this years round of rate increases are over. 4+% to 5% is my goal

In the meantime, we are using MYGAs for tax deferral and litigation protection.
__________________
"Never Argue With a Fool, Onlookers May Not Be Able To Tell the Difference." - Mark Twain
ShokWaveRider is offline   Reply With Quote
Old 08-09-2022, 07:25 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Car-Guy's Avatar
 
Join Date: Aug 2013
Location: Citizen of Texas
Posts: 7,769
It would seem (to me anyway) that rates will continue to climb, at least for the next 6 to 12 months. I fully expect CD's, for all maturities over 1 year, to be over 4% before year end, especially if the FED raises rates another .75 points in September. Personally I'm looking to start building a ladder when I see 18 to 36 month brokered CD's hit ~4%. I'm not sure I'd feel comfortable buying 4 or 5 year CD's, "this year" unless they were significantly higher, which could happen I guess.
__________________
I don't know how to act my age since I've never been this old before.
Car-Guy is offline   Reply With Quote
Old 08-09-2022, 08:51 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 14,858
Quote:
Originally Posted by COcheesehead View Post
My answer for most individual fixed income instruments is to ladder them and then stay true to the strategy of reinvesting maturing notes on the long end and enjoy life.
A ladder is a great hedge against interest rate risk and it eliminates having to guess. Rates on the intermediate/long end can drop just as easily as they go up. No one knows the future.
I think of laddering CDs/Bonds/etc. as the same thing as dollar cost averaging for putting new money into the stock market. It's rather humbling since I have to admit I can't predict the future. But, it keeps me from doing something silly like buying a 5 year CD at 1.2% ( I saw one late last year, IIRC) while inflation is starting to rage.

However, I do think with the Fed making it clear that further interest rate hikes are in the cards for later this year and maybe next year, avoiding long-term CDs is a good idea and has the odds going for it .

The July inflation rate is due to be unveiled in two days, the 11th. That might guide you a bit more.
__________________
The worst decisions are usually made in times of anger and impatience.

Self proclaimed President for Life of Outliers United.
Chuckanut is offline   Reply With Quote
Old 08-09-2022, 11:22 AM   #7
Thinks s/he gets paid by the post
 
Join Date: Jun 2016
Posts: 1,347
Nobody has a functional crystal ball
so I read tea leaves.
My biased opinion is that while SHORT TERM rates are rising, rates on longer durations have actually been falling lately as "the market" is expecting rate cuts sooner rather than later. Inventory of longer durations is getting sucked up fast and a lot of new issues are callable.

Today's Fido brokered CD inventory is flat for 2, 3, and 4 years at 3.3-3.35, the 5 year is only 3.45. Even the 10yr is 3.45... I didn't check if it was callable.

Markets pivot a lot faster now days. Which will make you cry more: missing out on a rate increase (that may not move the 5 yr higher) or having rates drop again before you buy?
Spock is offline   Reply With Quote
Old 08-09-2022, 11:37 AM   #8
Moderator
Aerides's Avatar
 
Join Date: Nov 2015
Posts: 11,269
The odds are rates will go up. But even if they don't, I can't imagine them coming down any time in the next 6 months. No need to rush for a long term CD.
Aerides is offline   Reply With Quote
Old 08-09-2022, 11:49 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2016
Posts: 5,310
Rates over 5 years have been coming down. So for all of you that are sure they will go up, I wouldn’t be too sure.
In mid June I could buy 4.5% munis. Now the same duration is about 3.4%
Short term rates react to the Fed, intermediate and long react to the future of the economy.
COcheesehead is offline   Reply With Quote
Old 08-09-2022, 11:54 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Aug 2004
Location: Laurel, MD
Posts: 6,978
Canít go wrong with a ladder.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
jazz4cash is offline   Reply With Quote
Old 08-09-2022, 12:59 PM   #11
Recycles dryer sheets
pletal's Avatar
 
Join Date: May 2009
Location: Tampa
Posts: 163
Quote:
Originally Posted by COcheesehead View Post
Rates over 5 years have been coming down. So for all of you that are sure they will go up, I wouldn’t be too sure.
In mid June I could buy 4.5% munis. Now the same duration is about 3.4%
Short term rates react to the Fed, intermediate and long react to the future of the economy.

Yes they have. Maybe buy a 5 year with 1/2 your money and hold off for a few months (lock into a 3 month) .
pletal is offline   Reply With Quote
Old 08-09-2022, 01:17 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 8,727
Magic 8 Ball says "maybe."
__________________
Ignoramus et ignorabimus
OldShooter is offline   Reply With Quote
Old 08-09-2022, 01:31 PM   #13
Full time employment: Posting here.
wrigley's Avatar
 
Join Date: Nov 2008
Location: Jacksonville
Posts: 557
Quote:
Originally Posted by aja8888 View Post
Sit tight, Frank, higher rates are coming.

Heck, I got 3.1% on a one year brokered CD this month at Schwab.
I've been watching Fidelity for one of those good deal 1 year CDs. Slim pickins there.

Mike
wrigley is offline   Reply With Quote
Old 08-09-2022, 01:32 PM   #14
Dryer sheet aficionado
 
Join Date: Jul 2022
Posts: 45
You guys prompted me to look at my credit union. Their CD rate curve is inverted. One year is 2.44%, five year is 0.9%.
EarlyandLate is offline   Reply With Quote
Old 08-09-2022, 02:21 PM   #15
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands, TX
Posts: 16,028
Quote:
Originally Posted by EarlyandLate View Post
You guys prompted me to look at my credit union. Their CD rate curve is inverted. One year is 2.44%, five year is 0.9%.
They won't sell many of those 5 year ones!
__________________
Everyone has a plan until they get punched in the mouth...philosopher Mike Tyson
aja8888 is offline   Reply With Quote
Old 08-09-2022, 04:59 PM   #16
Thinks s/he gets paid by the post
 
Join Date: Jul 2013
Posts: 1,549
Quote:
Originally Posted by frank View Post
I am seeing cd/s at 3.95 for 5 years. Do you folks think this is where it will stop or will there be further increases? I don't know what to think with the fed commenting about not being as aggressive in the upcoming meetings. what do you think? thanks

frank
Nobody knows.

That includes the people that think they do.
mrfeh is offline   Reply With Quote
Old 08-10-2022, 12:32 PM   #17
Thinks s/he gets paid by the post
John Galt III's Avatar
 
Join Date: Oct 2008
Posts: 2,437
Quote:
Originally Posted by frank View Post
I am seeing cd/s at 3.95 for 5 years. Do you folks think this is where it will stop or will there be further increases? I don't know what to think with the fed commenting about not being as aggressive in the upcoming meetings. what do you think? thanks

frank
May I ask where the 3.95% 5 year CD's are?
John Galt III is offline   Reply With Quote
Old 08-10-2022, 12:40 PM   #18
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands, TX
Posts: 16,028
Quote:
Originally Posted by John Galt III View Post
May I ask where the 3.95% 5 year CD's are?
The best I have seen for 5 year is 3.55%.
__________________
Everyone has a plan until they get punched in the mouth...philosopher Mike Tyson
aja8888 is offline   Reply With Quote
Old 08-10-2022, 02:02 PM   #19
Thinks s/he gets paid by the post
 
Join Date: Jan 2019
Location: Sunny California
Posts: 1,374
From a poster at depositaccounts

4% 60-Month CD Rate Is Here!!
donwein | 4 hours ago
I have just spoken with my CSR at EFCU after completing a wire transfer from Ally Bank.
She told me to wait until tomorrow to open the 60-month jumbo CD, because there will be a rate INCREASE from 3.85% to 4.00%.
All I can say is Hallelujah, 4% has at long last arrived!!

https://www.depositaccounts.com/bank...tml#promo48778
RetiredAndLovingIt is online now   Reply With Quote
Old 08-10-2022, 02:54 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2003
Location: Florida's First Coast
Posts: 6,121
NFCU has 3 year 3.3%
__________________
"Never Argue With a Fool, Onlookers May Not Be Able To Tell the Difference." - Mark Twain
ShokWaveRider is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
24 year old feeling like a 44 year old wanting a 64 year old portfolio Stripes Hi, I am... 9 08-30-2018 05:28 PM
Finally got out in my kayak today. First time this year. This year I was fo... Dog Life after FIRE 32 10-31-2015 03:22 PM
Immediate annuity (in 5 years time) or a 5-year deferred now? (Sorry) jammes2014 FIRE and Money 41 03-26-2015 08:54 AM
Full time to part time...to no time! WestcoastRN Hi, I am... 13 11-17-2013 02:02 PM

» Quick Links

 
All times are GMT -6. The time now is 12:10 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2022, vBulletin Solutions, Inc.