Wells Fargo 2.9% 3-yr brokered CDs

[24601NoMore]

Hi, everyone. Looks like Wells Fargo is offering a 2.9% 3-year brokered CD with monthly interest (vs the usual bi-annual with most brokered CDs).

I have some Ally CDs coming due and thinking about pulling the trigger on these, or the 2.75% 2-year. Both look to be really good deals, especially after the 2.6% 2-year and 2.8% 3-year Morgan Stanley CDs earlier this month.

My only hesitation is all of the 'issues' with WF over the past couple of years. Not just the fake account opening but all of the other shenanigans - of which there appear to be plenty. I was surprised at how much muck these guys have gotten into, actually.

That said, WF is unlikely to go away - and there's FDIC insurance if they did. Plus, I wouldn't have to deal with them directly if I bought the CD through Fido, VG, etc.

What do you guys think? Seems like a really good deal. Would you pull the trigger or settle for less with another bank to avoid any potential future hassles with WF?

ETA - looks like there are some other banks getting in on the 2.9% fun..but they are every 6 month interest vs. every month. Hmmmm....

 

[Dtail]

Looking to pull the trigger on a 3yr or 2yr CD ladder within a few days through Fidelity.
Wondered the same thing about WF, but the FDIC makes me comfortable using the WF CD's.

 

[Bir48die]

Hi, everyone. Looks like Wells Fargo is offering a 2.9% 3-year brokered CD with monthly interest (vs the usual bi-annual with most brokered CDs).

I have some Ally CDs coming due and thinking about pulling the trigger on these, or the 2.75% 2-year. Both look to be really good deals, especially after the 2.6% 2-year and 2.8% 3-year Morgan Stanley CDs earlier this month.

My only hesitation is all of the 'issues' with WF over the past couple of years. Not just the fake account opening but all of the other shenanigans - of which there appear to be plenty. I was surprised at how much muck these guys have gotten into, actually.

That said, WF is unlikely to go away - and there's FDIC insurance if they did. Plus, I wouldn't have to deal with them directly if I bought the CD through Fido, VG, etc.

What do you guys think? Seems like a really good deal. Would you pull the trigger or settle for less with another bank to avoid any potential future hassles with WF?

ETA - looks like there are some other banks getting in on the 2.9% fun..but they are every 6 month interest vs. every month. Hmmmm....

To me you're bringing up two different issues:

Do you want to do business with Wells Fargo? If you don't then look for another vehicle. If you want to punish all employees for the decisions and direction of a few idiots, so be it. They will survive.

Is a two year 3% CD attractive? From what I have seen recently it is. Your money is safe.

 

[njhowie]

Every few weeks when they bump the rate higher I take a couple. I took both the 2-year and 3-year at those rates ... even took the 4-year 3.0% this morning. Best approach is to just keep nibbling - no telling how high they may go or when they take their foot off the brakes.

 

[jazz4cash]

I'm seriously considering pulling out of an Ally CD and taking the 90 days interest penalty. It's a 3 yr@ 1.55 that I just bought July 2017. It's not a big amount but I cringe at the thought of initiating another direct transfer.

 

[Dtail]

Every few weeks when they bump the rate higher I take a couple. I took both the 2-year and 3-year at those rates ... even took the 4-year 3.0% this morning. Best approach is to just keep nibbling - no telling how high they may go or when they take their foot off the brakes.

IF you wish to say, are you generally or at all using CD's as substitutes for bond funds?

 

[foxfirev5]

I just pulled the trigger on another 5 year ladder at Fido. 2.79 % avg yield. By the end of the year I'll have twice as much in the CD ladders vs my bond funds. Since they're brokered CDs I'm keeping the bond funds for liquidity and diversification.

 

[Dtail]

I just pulled the trigger on another 5 year ladder at Fido. 2.79 % avg yield. By the end of the year I'll have twice as much in the CD ladders vs my bond funds. Since they're brokered CDs I'm keeping the bond funds for liquidity and diversification.

Yes, I will keep a small % in bond funds mainly for liquidity for small rebalancing vs. stocks.

 

[jazz4cash]

IF you wish to say, are you generally or at all using CD's as substitutes for bond funds?

Your question was not directed at me, but FWIW I am using CDs in lieu of bonds. I arbitrarily designate CDs with >2yrs to maturity as bonds in my 60/32/8 AA.

 

[limeyx]

Hi, everyone. Looks like Wells Fargo is offering a 2.9% 3-year brokered CD with monthly interest (vs the usual bi-annual with most brokered CDs).

I have some Ally CDs coming due and thinking about pulling the trigger on these, or the 2.75% 2-year. Both look to be really good deals, especially after the 2.6% 2-year and 2.8% 3-year Morgan Stanley CDs earlier this month.

My only hesitation is all of the 'issues' with WF over the past couple of years. Not just the fake account opening but all of the other shenanigans - of which there appear to be plenty. I was surprised at how much muck these guys have gotten into, actually.

That said, WF is unlikely to go away - and there's FDIC insurance if they did. Plus, I wouldn't have to deal with them directly if I bought the CD through Fido, VG, etc.

What do you guys think? Seems like a really good deal. Would you pull the trigger or settle for less with another bank to avoid any potential future hassles with WF?

ETA - looks like there are some other banks getting in on the 2.9% fun..but they are every 6 month interest vs. every month. Hmmmm....

I just bought the 2 year 2.75 one. Seems like a pretty good trade off between rate and duration although obviously now rates will immediately skyrocket making me look like a complete idiot

 

[Dtail]

Your question was not directed at me, but FWIW I am using CDs in lieu of bonds. I arbitrarily designate CDs with >2yrs to maturity as bonds in my 60/32/8 AA.

All responses are good. lol
Yeah just don't wish to keep losing money daily in a bond fund with rising rates.
Will keep about a small 4% in a bond fund for liquidity and potential rebalancing.

 

[njhowie]

IF you wish to say, are you generally or at all using CD's as substitutes for bond funds?

No ... in fact I hold no bond funds. 90% of my holdings are CDs and municipal bonds. I buy the individual bonds. I would not buy bond funds - I want control. My split is roughly 60/40 between the CDs and municipal bonds.

 

[Dtail]

No ... in fact I hold no bond funds. 90% of my holdings are CDs and municipal bonds. I buy the individual bonds. I would not buy bond funds - I want control. My split is roughly 60/40 between the CDs and municipal bonds.

Thanks njhowie. If I am reading your response correctly, it sounds like you are in great shape overall, with little need then for Equity exposure.

 

[Fleur58]

I checked at Fidelity and I saw the WF CDs you reference.
I am very interested in this type of investment. I am WF banking customer. They have always treated me well. Thinking of going for the 2 year ladder since the rates could go up. I have living expense money for the next 4 years just sitting in SPAXX for the past 8 months doing nothing. I just felt no rush to invest it. Its been nice not seeing it lose money, unlike my other investments of late.

 

[njhowie]

Thanks njhowie. If I am reading your response correctly, it sounds like you are in great shape overall, with little need then for Equity exposure.

Dtail, we're in a good place. True, little need for equity exposure at this time. Simply plan on riding interest rates higher at this time. I've been planning for this the past couple years and am happy the time has finally arrived.

Thanks.

 

[Freedom56]

The WFC CDs are zero risk if you stay within your FDIC limits. 2-3 year investment grade corporate notes (i.e Ebay, Ford, Allergan) are yielding about one point more. Buying these short term CDs is far better than a bond fund. At least your principal is guaranteed. Watch for the rate inversion. We are moving closer and closer to it.

 

[RobbieB]

I'm not getting on the stagecoach. Not now, not ever.

 

[Another Reader]

I'm not getting on the stagecoach. Not now, not ever.

I have been banking with Wells Fargo for 36 years. Never had a problem with them. Got my mortgage through them in 2012 at a lower rate and fees than I could have elsewhere and I have a complicated file to underwrite. The loan officer was able to package the information to get it through underwriting. She is extremely good at her job and she is still with Wells Fargo.

No large bank is perfect, but I prefer them to B of A and to Chase, which has no clue how to underwrite a complicated mortgage.

What's your beef with the stagecoach?

 

[njhowie]

Synchrony 3-year available today for 2.95%.

We'll get the next bump to 3.0% by the time of the next Fed hike in 4 weeks.

3-year may well go to 3.25% by end of summer.

 

[Red Badger]

I'm not getting on the stagecoach. Not now, not ever.

+1.

Don't have any use for Big Banks - this one or others. WRT the stagecoach, they just had a 2 full page ad in USA Yesterday espousing their newfound wholesomeness and honesty. Anyone who has to explain just how honest they are - - - isn't.

 

[Henry Lili]

3.2 % 5yr at Wells via broker as well.

 

[53anddone]

I just pulled the trigger on another 5 year ladder at Fido. 2.79 % avg yield. By the end of the year I'll have twice as much in the CD ladders vs my bond funds. Since they're brokered CDs I'm keeping the bond funds for liquidity and diversification.

I also ended up with a new 5 year CD ladder at Fidelity. On top of a two year I bought a few weeks ago.

I am 55 and am pretty secure so am at the point where I am only comfortable with about a 40% stock exposure. That may go up if the market has a significant correction but right now I am sleeping well with this mix.

 

[njhowie]

I just purchased 3-year 3.0% Synchrony CD. Merrill has it, Fidelity has it, surely other brokers will have it within days.