Corporate Notes

[jazz4cash]

All the discussion of various Fixed Income products inspired me to explore a bit on Fidelity.com. I'm looking at a prospectus for a Citibank Corporate Note that is rated A3/A, pays 4% for 3 years, callable after the 1st year. Not listed on any exchange and probably illiquid. If I don't find any red flags in the prospectus, I will probably nibble with IRA funds that came from a 3.7% CD.

There is another issue from Citi that matures in 13 months with a 2.75 coupon.

Does anyone have experience, opinions, pros, cons ?

 

[Luvtoride]

Jazz, I just saw a quote today for a 3 year MYGA with an A- rated insurance company at 3.5%. These generally have an annual withdrawal allowable up to about 10%. You should consider this instead of a callable corporate bond.
BTW, a 2 year MYGA is paying 2.85%.

 

[jazz4cash]

Jazz, I just saw a quote today for a 3 year MYGA with an A- rated insurance company at 3.5%. These generally have an annual withdrawal allowable up to about 10%. You should consider this instead of a callable corporate bond.
BTW, a 2 year MYGA is paying 2.85%.

That is a fantastic rate but I’m pretty sure its for a Jumbo and I’m not looking to invest very much. I am very comfortable with MYGAs and those rates have risen nicely.

 

[Luvtoride]

That is a fantastic rate but I’m pretty sure its for a Jumbo and I’m not looking to invest very much. I am very comfortable with MYGAs and those rates have risen nicely.

Not sure how much you’re looking to invest, but there are similar (if not exactly the same rate) through Oceanview Insurance with a $20,000 minimum.
I have MYGAs with that company.

 

[jazz4cash]

The rate is 3.2% below 80k. Still pretty good but the minimum of 20k is too high for me right now.

 

[aja8888]

A two year CD at Schwab I looked at yesterday was yielding 2.81%. It was a new issue.

 

[Rianne]

Jazz, I just saw a quote today for a 3 year MYGA with an A- rated insurance company at 3.5%. These generally have an annual withdrawal allowable up to about 10%. You should consider this instead of a callable corporate bond.
BTW, a 2 year MYGA is paying 2.85%.

Are MYGAs only sold online? Or do you contact the insurance co? Can you buy an MYGA within tIRA?

 

[pb4uski]

All the discussion of various Fixed Income products inspired me to explore a bit on Fidelity.com. I'm looking at a prospectus for a Citibank Corporate Note that is rated A3/A, pays 4% for 3 years, callable after the 1st year. Not listed on any exchange and probably illiquid. If I don't find any red flags in the prospectus, I will probably nibble with IRA funds that came from a 3.7% CD.

There is another issue from Citi that matures in 13 months with a 2.75 coupon.

Does anyone have experience, opinions, pros, cons ?

Where are you finding this available if they are not listed on any exchange?

 

[jazz4cash]

Are MYGAs only sold online? Or do you contact the insurance co? Can you buy an MYGA within tIRA?

I don't know if MYGA's are only sold online. Most are sold through brokers including Blueprint Income, Stan The Annuity Man, and immediateannuities.com. The pretty much all have similar products available from many insurance companies. Fidelity ( and I think Vanguard) also sell MYGA products but Fidelity at least only sells products from highly rated insurance companies. There are a few insurance companies that sell MYGA's direct (e.g. no broker). Canvas Annuity and Gainbridge are two that I am aware of. I think they may also sell through brokers. You can definitely buy a MYGA within a tIRA.

The Blueprint Income website is very informative. Sometimes they are called deferred annuities or fixed annuities.

Edit: Here is the thread I started on the topic:https://www.early-retirement.org/forums/f44/starting-myga-investment-106438.html?highlight=MYGA

 

[Koolau]

Jazz, I just saw a quote today for a 3 year MYGA with an A- rated insurance company at 3.5%. These generally have an annual withdrawal allowable up to about 10%. You should consider this instead of a callable corporate bond.
BTW, a 2 year MYGA is paying 2.85%.

My gut says these rates are going to go up as inflation rages. I had the equivalent of a MYGA (SPDA) back in the last inflation times that paid 11%. The thing to watch is what is the minimum (floor) of interest. The company can lower the initial rate to the floor whenever they want. I THINK most MYGAs are issued at one rate with no changes possible - but I could be wrong and YMMV.

 

[jazz4cash]

I THINK most MYGAs are issued at one rate with no changes possible - but I could be wrong and YMMV.

I’ve looked at quite a few MYGA offers and they were all structured with no surprises. I think some may have a 1st year ‘bonus though. I would not be surprised if they come out with some fancy bump up scheme if inflation continues to run hot.