A good bet 4% CDs will be available if not this year, this summer.
I will hold out until around that % for next ladder rung.
For what term?
A-rated Brighthouse MYGA rates just increased. 3.7, 4.1, and 4.15 for 3, 5, and 7 years 10% withdrawals permitted each year.
Here is an article: https://www.bankrate.com/banking/cds/paying-tax-on-cd-interest/Does anyone have any advice they can share re: breaking a cd - early withdrawals? Never did this before, but stuck in a couple of very low paying CDs opened earlier this year, vs current T Bill rates. One has onerous penalties, but is still worth breaking according to a bankrate.com online calculator I found.
Just not sure how it works tax-wise: am I still going to get a 1099 on interest, even though all interest (and a small part of principal) will negated by the early withdrawal penalties? Are there other things to consider before breaking a CD?
How early withdrawal penalties affect taxes owed
In some cases, early withdrawal penalties may reduce your tax obligation.
Most traditional CDs charge penalties for taking out money before the maturity date. If you pay an early withdrawal penalty, you can deduct the full amount from your taxes, even if it’s an amount that’s greater than the interest earned. So, if you earned $50 in interest, but you paid an early withdrawal penalty of $100, the full $100 can be deducted on taxes.
Any early withdrawal penalties will be included in box 2 of your 1099-INT form from the issuing institution and clearly labeled “early withdrawal penalty.”
Do these have age restrictions?
I believe the maximum age allowance is 85 for this company, as it is for many companies.
Does anyone have any advice they can share re: breaking a cd - early withdrawals? Never did this before, but stuck in a couple of very low paying CDs opened earlier this year, vs current T Bill rates. One has onerous penalties, but is still worth breaking according to a bankrate.com online calculator I found.
Just not sure how it works tax-wise: am I still going to get a 1099 on interest, even though all interest (and a small part of principal) will negated by the early withdrawal penalties? Are there other things to consider before breaking a CD?
Ally has the 12 month CD at 1.50% but a 1 year T bill is 2.89%. Rhetorical question - why would anyone buy the CD?
Because most people know about CDs but don't know about or understand t bills? I've known about CDs since I opened my first bank account as a kid. I know nothing about t bills or how to go about getting one. I think that's true for most people. I wouldn't even be trying to understand t bills if I hadn't come across this thread.
Discover Bank savings is now 0.90%
Discover Bank savings is now 0.90%
About 6-8 weeks ago I came to the conclusion that bond funds were not just losing money this year but with lots of Fed rate hikes coming it was going to get much worse. I started to read about T bills and followed threads here and asked questions. I bought several in my taxable and Rollover IRA about 3 weeks ago, it is actually very easy to do, Treasury Direct always made it look so complicated. So I have sold all the shares of 2 of my 3 bond funds and will be buying T bills this year. The coupon may or may not be as high as the SEC yield of the bond funds but when they mature I will get back my principal vs losing to nav decreases as rates rise.
I moved away from Discover when they were at .60% and Bask Bank was at 1.25% They are now at 1.5%.
That was smart. I wish I had done the same thing. I'm wondering if it's too late and whether selling my bond funds now to invest in T bills would be locking in losses. I have bond funds in my retirement accounts at both Vanguard and Fidelity. They aren't down as much as my stock funds, but they are down significantly. I suppose I could hedge my bets and leave some of my money in the bond funds but transfer some of the bond funds into an equity fund and some into treasuries. I also could use some of my cash and put it into treasuries. I have some money in my settlement fund at Vanguard.
Could you or someone else provide me (or direct me) to the clearest information about how to go about buying treasuries? I am a total newbie to this.
I've never heard of Bask Bank. Why and how are they so much higher than everyone else?
Looks like the CD rates are sending us a message from the future.
As to how long the rate increase will last.
Today at CH Sch. 1yr 2.900 / 18 mo. 3.050 / 2 yr 3.150, (3), (4) and (5) yr all. 3.250%
May hold off on the even amount 5 year ladder I had planned. Build a VERY small 5 yr. ladder. And put the bulk in to 5 yr CD's. When we get into the 3.5%- 4% range.
Thoughts?
What about a 5-year or 7-year Treasury Note? There is an auction for both next week. The 7-year hit 3.583% yesterday but is down to 3.375% at the moment.
I'm thinking about dumping in $1M to generate around $30k a year for the next 7 years. Foolish? Wait for CD rates to increase, if they will? I don't know.
I moved away from Discover when they were at .60% and Bask Bank was at 1.25% They are now at 1.5%.