Another Reader
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- Joined
- Jan 6, 2013
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My online savings account with Bask Bank is now up to 4% from 3.85%.
My email said 4.03 percent. Wonder what will happen when Treasury yields start to drop.
My online savings account with Bask Bank is now up to 4% from 3.85%.
My email said 4.03 percent. Wonder what will happen when Treasury yields start to drop.
Cash rates at banks are sensitive to the Fed Funds rate which drives the shortest end. I don’t think they will be dropping until the Fed drops their funds rate which I don’t expect to happen for a long while.
Of course not. The big retail banks count on their loyal customers who leave their cash there in spite of teeny rates. Online high yield savings accounts compete with each other for deposits and pay much higher interest and have been increasing as the Fed fund rates increase.Cash rates at some banks are sensitive to the Fed Funds rate...not seeing that with the big banks, so for some there are other factors. The little guys have limited sources of capital, which is why they have to be more competitive on deposit rates.
I'm beginning to think that the 5-year, 5% uncallable CD has sailed; we missed the boat.
I know this was discussed a lot already. But the conventional wisdom is that most of the callable 5 year CDs will indeed be called ? And some people were arguing in favor of buying the callable CDs anyway?
Tempted to buy a callable 5 year CD at 4.85% I see on Vanguard.
Are you being amply rewarded for buying the callable CD instead of the non-callable CD? I would need to see at least 0.5% more to tempt me. At 1% more I would probably jump at it. Even then I might consider splitting the funds and buying one callable and one non-callable CD. YMMV.
I'm beginning to think that the 5-year, 5% uncallable CD has sailed; we missed the boat.
Originally Posted by erkevin View Post
I'm beginning to think that the 5-year, 5% uncallable CD has sailed; we missed the boat.
The FED has said there are more rate hikes to come.
But at which durations? This may be confined to the very short end while intermediate and long rates hold steady or continue to drop.My thought is in 3 more Fed rate hikes, the Fed rate will be 1% higher than it is now.... that has to have a positive effect on at least the short term rates. So higher rates are coming.
At some point something will have to give. Either long-term rates will move up or short-term rates will move down. The current inversion will not last forever.But at which durations? This may be confined to the very short end while intermediate and long rates hold steady or continue to drop.
Capital 1. Raised 5 year cd. 4.25 to 4.40
Does that mean if I invest $5,000 I may not get the $5,000 back ? ie, I will not be 'made whole' and maybe I will get a 'market price' back, which may be different from $5,000? I know I get to keep the already earned interest, but what about the principal?
Edit to add : did some more research and looks like 'make whole' means the CD issuer would have to pay off my $5,000 investment plus all interest I * would have earned * if the CD were not called in early. I do not expect to get the future interest anyway, so maybe the 'make whole call = No' is just fine.
So a 'make whole call No' feature is pretty standard in a callable CD ?
I assume he was anticipating the Fed rate hike.FWIW, I was talking with my Fidelity guy this morning and he said their money market, FZDXX, should be around 4.25% next week. It's about 3.8% now, so that's interesting.
I assume he was anticipating the Fed rate hike.
I’m waiting for Vanguard to approve my link to Utah First Credit Union so that I can open up my 5% 22 month CD, but now I’m wondering if it makes sense to hold off for a better rate. I’m not thrilled with Vanguard at the moment. They won’t let me send money to a bank account until almost two weeks after I add it to my account. Pretty ridiculous.
Most of my non-retirement money is in FZDXX. My guess is it ends up around 5% early next year. How long it stays there is anybody's guess.
Most of my non-retirement money is in FZDXX. My guess is it ends up around 5% early next year. How long it stays there is anybody's guess.
So the outlook above would be for a MM fund like FZDXX, not for 3-5 year bonds which respond more to economic outlook.Probably not very long IMHO.
This is the time, starting a month or two ago, to be locking in the best 3-5 year rates you can find.
Of course, people here have been saying that for a while now, so nothing new.