High(er)-rate CD deals

[brewer12345]

Dunno if this is too dumb a question to ask... OK to ignore...

Why does one buy an extended (more than 6 month) CD in the under 3% rate, when IBonds currently yield 2.78%, and adjust to the CPI? Yes, Bond held under 5 years lose thee months interest when redeemed early.

For me, a couple of reasons:

- I bonds have relatively small annual purchase limits (10k?), CDs do not

- Dealing with treasury direct is a colossal PITA

I have both CDs and I bonds, but CDs are most of it.

 

[audreyh1]

The 84 mo CD on the AFCU website has been reduced from 3% to 2.2%. This is very disappointing since I was stalking CD rates in anticipation of higher rates and found the opposite. I am still hoping to find some rate increases after April 1st since I have come to the end of the road on my 4% NFCU CD and need to reinvest.

CD rates do seem to have a serious lag compared to Fed rate rises. On the other hand, they never went as low as the Fed Funds Rate did.

I guess banks and credit unions have plenty of money on deposit at the moment. They aren't in a hurry to compete with each other.

 

[VFK57]

CD rates do seem to have a serious lag compared to Fed rate rises. On the other hand, they never went as low as the Fed Funds Rate did.

I guess banks and credit unions have plenty of money on deposit at the moment. They aren't in a hurry to compete with each other.

I think the Feds raised due to a different reason than a boom in the economy. Our GDP growth although OK clearly indicates that we are not booming and inflation the Feds wanted comes only because of Chinese Yuan slowly but surely started to push US$ from world trade. I also noticed that Banks did not move at all after the Feds rate raising. There is no much demand for loans, otherwise we would see a competition for your money to lend.

 

[audreyh1]

I expect the prime rate went up, so loans and mortgages were affected. Just not interest rates paid for deposits.

 

[Dave J]

Dunno if this is too dumb a question to ask... OK to ignore...

Why does one buy an extended (more than 6 month) CD in the under 3% rate, when IBonds currently yield 2.78%, and adjust to the CPI? Yes, Bond held under 5 years lose thee months interest when redeemed early.

There is a $10,000 limit per year per SS number purchase limit on I-Bonds. So if you have more than that , you need to look elsewhere.
HTH

 

[Just_Steve]

Me, neither. That's why I kept my cassette player.

You have a cassette player? I still use an 8 Track player.

 

[Dave J]

You have a cassette player? I still use an 8 Track player.

For real, tomorrow my new record player gets delivered by Amazon!!!!

 

[brewer12345]

I expect the prime rate went up, so loans and mortgages were affected. Just not interest rates paid for deposits.

Yes, but with market interest rates moving up on treasuries, the banks will have to start competing soon. 4 week t bills are .74% as of today. Doesn't take much more for money to start moving in that direction rather than 1 year CDs.

 

[almost there]

Are you a member of the American Consumer Council? I just found out that qualifies you. I forgot about that.

I am now. Joined on line when I opened the account. $15.00 for a life time membership.

 

[savory]

Here is a CA credit union now paying 2.72% for a 5 year CD. Need to qualify for membership. Those living in the San Francisco area have a good chance. Also, they post the following, among other ways to qualify You are an employee or pensioner of one of the 1100+ companies (including AT&T and Walgreens), associations, trade groups, chambers of commerce, or federal government agencies served by Patelco Credit Union.


https://www.patelco.org/Rates/#CDs

 

[Dash man]

Dunno if this is too dumb a question to ask... OK to ignore...



Why does one buy an extended (more than 6 month) CD in the under 3% rate, when IBonds currently yield 2.78%, and adjust to the CPI? Yes, Bond held under 5 years lose thee months interest when redeemed early.

Yields on I Bonds change every six months. It wasn't that long ago there was a six month period where they were paying zero for the inflation portion of the calculated rate. However, we recently bought more I Bonds expecting inflation to be higher for the foreseeable future. We can always cash them in after a year should rates go back down.
Funny thing though...having registered the bonds jointly with DW we bought two $10,000 I Bonds thinking one for each of our social security numbers. We got a warning email about buying too many I Bonds for one social security number, since my number is the primary on the account. But they let us keep the bonds. We also opened an account for DW and bought another $10,000 I Bond in that account registered jointly, but with her number as primary. We also opened a trust account, with my number as primary and bought another.

 

[audreyh1]

Yes, but with market interest rates moving up on treasuries, the banks will have to start competing soon. 4 week t bills are .74% as of today. Doesn't take much more for money to start moving in that direction rather than 1 year CDs.

Yeah, is what I thought, so I've been watching this process to see when high yield savings and CD rates "finally get moving". Many haven't charged their rates for a year or two. At least they stopped going down.

Money market mutual funds, on the other hand, have increased rates quite a bit over the past year, although still way behind the higher yielding savings account.

 

[FiveDriver]

I notice that Capital One CD Rates are moving up recently....their 18 month rate is now 1.45% and the 24 month is at 1.60% and than it flattens out.

https://www.capitalone.com/cds/online-cds/

I don't feel comfortable locking up money longer than that.

 

[Chuckanut]

Me, neither. That's why I kept my cassette player.

What's a cassette player? Can I store my old 45's in it?

 

[Chuckanut]

Yeah, is what I thought, so I've been watching this process to see when high yield savings and CD rates "finally get moving". Many haven't charged their rates for a year or two. At least they stopped going down.

My 3% PenFed CD's still look awfully good right now. Who would have thought?

 

[audreyh1]

I notice that Capital One CD Rates are moving up recently....their 18 month rate is now 1.45% and the 24 month is at 1.60% and than it flattens out.

https://www.capitalone.com/cds/online-cds/

I don't feel comfortable locking up money longer than that.

They are just catching up with some others.

 

[audreyh1]

My 3% PenFed CD's still look awfully good right now. Who would have thought?

Mine mature in Dec of next year.

Many of us have be patting ourselves on the back ever since.

I loaded up on the Andrews FCU 3% early this year and I am curious to see when the rate is finally exceeded.

 

[Dave J]

I loaded up on the Andrews FCU 3% early this year and I am curious to see when the rate is finally exceeded.

Andrews lowered their 3% rate a few weeks ago, to I think 2.2%. Glad I got one also a while back.

 

[Free bird]

Mountain America C U told me I can only transfer $7500 per day via ACH. The CU it's coming from has no ACH limits. Are all of these places different? I thought I read where someone on this thread funded their account with $260k using ACH at MACU.

 

[Freedom56]

I noticed on Fidelity that JPMorgan Chase is offering a 3% 10-Year CD although it doesn't appear that you have the ability to make any early withdrawals prior to maturity. I am considering moving some $ that is currently in a bond fund in my tIRA and Roth IRA to this but wanted to get some feedback from others as to whether this might be jumping the gun since I will be locked into this for 10 years (even though I have no plans of using these funds during that period). Thanks!

A 10 year note with JP Morgan pays 4%.

 

[audreyh1]

Mountain America C U told me I can only transfer $7500 per day via ACH. The CU it's coming from has no ACH limits. Are all of these places different? I thought I read where someone on this thread funded their account with $260k using ACH at MACU.

Usually you can work around daily limits by initiating the transfer (either direction) at the institution with the higher ACH limits. For example, Fidelity Investments allows $100K daily ACH limit, while Andrews FCU has a $5K daily limit, and a $25K monthly limit. I have transferred $100K just fine from Fidelity to Andrews to buy CDs. And I have transferred large amounts out of other credit unions into Fidelity with no problem as long as I initiated the transfer at Fidelity.

 

[jazz4cash]

I'm leaning towards the 49mo 2.23% CD at NASA FCU. Some of the Brokered CDs at Fido look ok also.

 

[jazz4cash]

A 10 year note with JP Morgan pays 4%.

Got a link for that one?

 

[ShokWaveRider]

I am still sitting on $2m At 3% till 2019, fingers crossed that they are higher then.

 

[Free bird]

It seems my credit union here who doesn't have the ability to send ACH transfers on their Web site can fill out a form & you sign it & they will initiate any amount you want to transfer. The whole thing is a bit weird how the different people at different credit unions handle these requests. Not sure where these limits are coming from. Why would a credit union self impose an ACH deposit limit? Isn't odd that a credit union would put up an obstacle to deposit money in their institution? Training level seems to vary widely with employees. If you walked in the a CU with a million dollars I'm sure they wouldn't impose any deposit limits. So what's the difference? Money is nearly all virtual now anyway.