is now the time for 5 year cd?

[frank]

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

 

[aja8888]

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.

 

[COcheesehead]

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.

 

[ShokWaveRider]

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.

 

[Car-Guy]

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.

 

[Chuckanut]

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.

 

[Spock]

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?

 

[Aerides]

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.

 

[COcheesehead]

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.

 

[jazz4cash]

Can’t go wrong with a ladder.

 

[pletal]

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) .

 

[OldShooter]

Magic 8 Ball says "maybe."

 

[wrigley]

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

 

[EarlyandLate]

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%.

 

[aja8888]

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!

 

[mrfeh]

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.

 

[John Galt III]

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?

 

[aja8888]

May I ask where the 3.95% 5 year CD's are?

The best I have seen for 5 year is 3.55%.

 

[RetiredAndLovingIt]

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/banks/efcu-financial.html#promo48778

 

[ShokWaveRider]

NFCU has 3 year 3.3%

 

[REWahoo]

NFCU has 3 year 3.3%

Actually 33 months and limited to $100k per member.

 

[Dash man]

I picked up a 2.85% six month CD today. Rates should be higher by then. Also got a 4.76% ten year bond. Both on Schwab.

 

[Golden sunsets]

And, best of all, the NFCU 33 mo 3.3% is an add on CD up to $100K.

 

[Henry Lili]

And, best of all, the NFCU 33 mo 3.3% is an add on CD up to $100K.

+1

 

[jazz4cash]

+1

+2