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Old 04-04-2023, 07:48 PM   #41
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Originally Posted by disneysteve View Post
Rates fluctuate a lot, and they tend to be higher earlier in the day. I looked at some this morning and right now, the ones listed are 0.4% lower than they were then. Also, rates have come down some over the past couple of weeks. I got one for 5.35% on March 16 that matures 9/2024.
I haven’t been following it closely lately, but in the past I’ve just never found rates as good as bank CDs. It sounds like I would need to monitor the available CDs frequently and then jump in when a good one shows up. I’m not opposed to doing that. Just haven’t had much luck with it.

If I can find a bank paying 5% and only charging 6 months interest for an early term penalty I still prefer it. That way I’m locked in for 5% for the entire term, but if rates go up a lot I’m locked in at only a 6 month penalty to pull out and reinvest at the higher rate.
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Old 04-04-2023, 08:01 PM   #42
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Good link for the worry warts out there.

https://thefinancebuff.com/brokerage...e-no-fdic.html

Quote:
When you have money at a broker, the broker is only buying and keeping things for you. They do have it in a safe so-to-speak. Your money is in stocks, bonds, mutual funds, ETFs, etc. There is an exact mapping between what the broker says you have in your account and what the broker keeps for you. The broker doesn’t invest your money in long-term bonds for itself.
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Old 04-05-2023, 06:04 AM   #43
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Originally Posted by Brook2 View Post
Ok I know this forum tends to slip up and be snarky- but be nice...
I think it's sad that you joined the forum in just the last few months and have already been exposed to this. The majority of the posts aren't snarky, but that loud minority still persist. Good people and content gets turned away by snarky people. I'm glad you posted your question despite this!
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Old 04-05-2023, 08:48 AM   #44
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I just checked with Vanguard and the highest rate I could find on a non-callable CD was 4.95%. My Utah First Bank CD pays 5%. Now of course the small difference isn’t worth chasing, but I’m not seeing anything in the 5.5% range. What brokerage are you using to get these?
These were purchased at Fidelity, Schwab, and Ameritrade.

None of the CD's I purchased are now available, and yes rates have moved down.

"The early bird gets the worm". Having said that, one of my favorites is "The second mouse gets the cheese".
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Old 04-05-2023, 12:43 PM   #45
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Schwab is still showing a 5.1% 1-year CD. Callable quarterly beginning 7/12/23... but what is the likelihood of a 1-year CD getting called? I dunno. Get'em while they are hot!

Non-callable from a different bank is 4.9% I'm tapped out for now so it doesn't matter to me.
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Old 04-05-2023, 01:02 PM   #46
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^^^^^
One more week and I'll be ready to buy some more. Hope they hold until then.
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Old 04-05-2023, 02:34 PM   #47
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Originally Posted by Brook2 View Post
When I buy a brokered CD from Vanguard, my understanding is that a bank sold Vanguard a bunch of their CDs as a package, and VG is distributing them out for us to buy.

But once VG sells us an individual CD from a bank, why isn’t our primary relationship with the bank, and not Vanguard ?

Vanguard has a decent explanation on their website:
https://personal.vanguard.com/us/con...tOVContent.jsp



The brokered CDs are created specifically for the brokerages and have different rules than the ones sold directly to the public by the bank. One difference seems to be that your interest payments go into your cash sweep account and do not increase your interest-earning balance in the CD. This alone makes the product a "captive" product of the brokerage.


The FDIC apparently has decided to cover brokered CDs on similar terms to other CDs, so as far as I can tell it is still up to you to make sure all your balances at any given bank (including your brokered CDs as well as your regular CDs, savings accounts, etc.) don't exceed the FDIC limits.


The SIPC considers brokered CDs to be "securities" so they are subject to the $500k limit rather than the $250k limit that applies to cash.


It makes sense that brokered CDs would be covered by both FDIC and SIPC because they come with risks associated with both the issuing bank and the managing/operating brokerage firm. If your money goes poof because the bank fails, then FDIC steps in. If your money goes poof because Vanguard fails (or absconds with your money), then SIPC has to step in.
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