Best CD, MM Rates & Bank Special Deals Thread 2023 - Please post updates here

[pb4uski]

Thanks all who answered my question on the value loss on my CD. It makes sense, and I appreciate the financial knowledge and wisdom on this site!

Another thing to consider is that even if you sold and only received $49,992.85, the $7.15 "loss" is a lot less than an early withdrawal penalty on a bank or credit union CD.

 

[Freedom56]

Another batch of City National 5/5 and 5.1/3 at Fidelity.

 

[njhowie]

Another thing to consider is that even if you sold and only received $49,992.85, the $7.15 "loss" is a lot less than an early withdrawal penalty on a bank or credit union CD.

Plus commission of $1/CD at Fidelity, could be more elsewhere.

Though it's doubtful he'd be able to sell at that price, as he'd likely have to request a bid, and then get low ball offers back.

 

[Dream Weaver]

Another thing to consider is that even if you sold and only received $49,992.85, the $7.15 "loss" is a lot less than an early withdrawal penalty on a bank or credit union CD.

There is also the upside that if the Fed turns dovish and rates drop these brokered CDs will increase in value and can be sold for a profit at any time. That doesn't happen with bank CDs.

OK I do remember back in the early 80s? my Grandma had a long term CD locked into a super high rate at her bank and the bank manager tried to buy her out early because they were losing their ass on it but she wouldn't budge.

 

[Brook2]

Forgive if this has been answered before - but I can't find an answer.

I found this statement on a google search. Is this true?
--
Can You Add Money To A CD?
If you have a CD about to mature, you may be wondering if you can add more money to it to continue earning interest on your investment. The answer is yes! You can add money to a CD any time, even if it is about to mature.
--

So, for example if I bought $10,000 of a 5 year CD at 6% and then for some unexpected reason CD interest drops dramatically to 2% during the next two years, I can still buy $50,000 for 6% at any time during the 5 years before it comes due?

 

[Car-Guy]

So, for example if I bought $10,000 of a 5 year CD at 6% and then for some unexpected reason CD interest drops dramatically to 2% during the next two years, I can still buy $50,000 for 6% at any time during the 5 years before it comes due?

I doubt that! If you were a bank, would you want to accept an additional 50k at 6% for three more years when they are only paying 2% to other depositors.


Could be possible if the rates were the same.

 

[pb4uski]

... So, for example if I bought $10,000 of a 5 year CD at 6% and then for some unexpected reason CD interest drops dramatically to 2% during the next two years, I can still buy $50,000 for 6% at any time during the 5 years before it comes due?

Some bank or credit union CDs do allow that but it is rare these days.

The GTE Financial 3% 5-year CDs sold in 2019 allowed additional deposits but I think they regretted allowing it.

 

[Brook2]

I doubt that! If you were a bank, would you want to accept an additional 50k at 6% for three more years when they are only paying 2% to other depositors.

It sounded crazy to me too, but here's the web page https://www.annuityexpertadvice.com...~:text=If you have a CD,it is about to mature.

"What Happens After I Add Money To My CD?
Once the additional funds have been added to the CD, the account will continue to earn interest at the same rate as before. This is a great way to continue to grow your investment without having to cash out the CD and reinvest the money into a new one."

 

[Car-Guy]

It sounded crazy to me too, but here's the web page https://www.annuityexpertadvice.com/can-you-add-money-to-a-cd/#:~:text=If%20you%20have%20a%20CD,it%20is%20about%20to%20mature.

"What Happens After I Add Money To My CD?
Once the additional funds have been added to the CD, the account will continue to earn interest at the same rate as before. This is a great way to continue to grow your investment without having to cash out the CD and reinvest the money into a new one."

Just skimmed the article but these two things quickly caught my attention

-The interest rate on your CD will not change, even if rates have increased since you originally opened the account.

- you may have to pay a fee to add money to your CD.

Bought of those things are not in your favor. Probably more issues, but as I say, I just skimmed it.

 

[jazz4cash]

Some bank or credit union CDs do allow that but it is rare these days.

The GTE Financial 3% 5-year CDs sold in 2019 allowed additional deposits but I think they regretted allowing it.

I’d say it’s extremely rare. The linked article is garbage IMO. Navy Federal Credit Union is the only one I know of that regularly offers add-on feature and they don’t always advertise it’s available. It doesn’t hurt to ask.

 

[Dtail]

Some bank or credit union CDs do allow that but it is rare these days.

The GTE Financial 3% 5-year CDs sold in 2019 allowed additional deposits but I think they regretted allowing it.

Damn straight on that one. In a declining interest rate environment at that time, the Risk Manager should have been fired.

 

[Brook2]

Just skimmed the article but these two things quickly caught my attention

-The interest rate on your CD will not change, even if rates have increased since you originally opened the account.

- you may have to pay a fee to add money to your CD.

Bought of those things are not in your favor. Probably more issues, but as I say, I just skimmed it.

But that only matters if you want to buy more. You aren't forced to buy more. You can still keep the rate you planned on keeping all along.

Fee would be a negative tho'

 

[RetiredAndLovingIt]

It depends on how much you are putting in play. If you are putting $1 million in play, technically you only need 4 CDs since each CD is FDIC insured for up to $250k, but if it were me I would do 5 CDs for each $1 million in play to leave room for interet to be covered.

It's definitely not the norm but some institutions offer them from time to time. GTE had a great one and Navy Federal does them from time to time as well.
If you can get one at a decent rate and length then it can't hurt to buy one as protection against rates dropping in the future. I opened mine at GTE with $500 and it was over 6 figures when I bailed out since 3% was no longer a great rate. In the case of GTE there was also a loophole which has since been closed on their current CD disclosure that allowed us to get out with no EWP.

 

[Dtail]

It's definitely not the norm but some institutions offer them from time to time. GTE had a great one and Navy Federal does them from time to time as well.
If you can get one at a decent rate and length then it can't hurt to buy one as protection against rates dropping in the future. I opened mine at GTE with $500 and it was over 6 figures when I bailed out since 3% was no longer a great rate. In the case of GTE there was also a loophole which has since been closed on their current CD disclosure that allowed us to get out with no EWP.

I thought the loophole was closed only on newer certificates, not older ones.

 

[Quattro73]

City national in LA is a division of RBC

 

[RetiredAndLovingIt]

I thought the loophole was closed only on newer certificates, not older ones.

I meant that new CD's since January 2023 don't have the loophole due to the disclosure being changed at that time. The changes not impact the older CD's.

 

[John Galt III]

This one popped up at Schwab this morning:

Zions BanCorp, Ntnl UT 5.4% CD 09/27/2024, CUSIP 98970LC43

I bought some for two of my accounts. 5.4% for 18 months is as good as it gets right now.


Edit: As of 9:47AM EDT there are still over $20mm worth available.

Thanks to whoever started the Zion tip. Bought some today. Still keeping some dry powder, just in case we see 6.0% !

 

[brucethebroker]

I'm not concerned about loss of capital within FDIC limits. I've been buying short duration CDs and don't care too much about bank soundness. However, moving out to a 5 year investment, reinvestment risk gets my attention. That risk is that my 5 year CD bank fails 2 years from now and I have to either accept much lower terms from the new bank or cash it out and reinvest it, possibly at a much lower rate. So, for longer maturities I'm paying attention to bank soundness.

Interesting points. Thanks.

 

[brucethebroker]

When you buy/own a brokered CD, like any other fixed income instrument which trades in the market (e.g. treasuries, corp and muni bonds) the market value changes day to day. This is called "Mark to market". If you are holding the CD (or treasury or bond) to maturity, this value is meaningless. You hold the bond to maturity, the value will always be $1000 per CD. The value is informational in nature in that it gives you a barometer for what you might expect to get if you were to attempt to sell it in the market today. If you're not selling, again, meaningless...only that it will not show full value on your account page/statement. Similarly, on the flip side, the value can go higher, if interest rates are going lower, for example.

I finally figured that part out also, but thanks for the info.

What I do not know is what happens to any unpaid, but earned interest? If you own a one year CD, interest paid semi, and you sell with 3 months left, does any of that semi annual interest go to me? Thanks. BB

 

[njhowie]

I finally figured that part out also, but thanks for the info.

What I do not know is what happens to any unpaid, but earned interest? If you own a one year CD, interest paid semi, and you sell with 3 months left, does any of that semi annual interest go to me? Thanks. BB

Yes, just like bonds, you have the price for the CD bought/sold, commission, and accrued interest which buyer pays and seller collects.

 

[Golden sunsets]

I bought the same one. Question for those with Fido, this issue doesn't settle until 3/31. Is your settlement account reduced today or on 3/31?

Pb for Fido, I believe your account is reduced early only once the new issue is fully subscribed. Otherwise your funds are still earning in your settlement account until the day before or day of. An order can be canceled, but not once the issue is fully subscribed.

Sent from my SM-T510 using Early Retirement Forum mobile app

 

[njhowie]

Pb for Fido, I believe your account is reduced early only once the new issue is fully subscribed. Otherwise your funds are still earning in your settlement account until the day before or day of. An order can be canceled, but not once the issue is fully subscribed.

Sent from my SM-T510 using Early Retirement Forum mobile app

Depends. Usually doesn't matter if it's fully subscribed, can still cancel unless...they change the order status to "Execution Pending". I saw this one just a couple weeks ago for the first time. In the past, CDs were always done to settle on settlement date. Now, when you place the order, the info tells you between 0 days and the date indicated on the CD info. Lately, I have seen some quickly close orders/purchases and immediately issue them if rates happen to move lower during a particular day. Then there was that Execution Pending one, which sat in that state for 2 weeks. Lastly, just in the past couple days, I did cancel a fully subscribed 9 month for 5.25% when a 5.35% showed up, so I switched. When you do that, you can immediately see in the new issue list the ones you just released are then available

 

[ShokWaveRider]

Schwab MM Yields today.

SWVXX - 4.58%
SNAXX - 4.73%

Not so shabby for dry powder. Not worth moving unless 5.5+% Brokered CDs become a reality.

 

[dmpi]

Schwab MM Yields today.

SWVXX - 4.58%
SNAXX - 4.73%

Not so shabby for dry powder. Not worth moving unless 5.5+% Brokered CDs become a reality.

Yes, In this environment it's hard to justify buying a 6-month because if you lose even one day of interest on the buy or mature side you're going to have almost no profit. Anyway it's nice to have a bunch of dry powder so you can jump on the opportunities that people bring up here.

 

[Another Reader]

Schwab MM Yields today.

SWVXX - 4.58%
SNAXX - 4.73%

Not so shabby for dry powder. Not worth moving unless 5.5+% Brokered CDs become a reality.

I don't view non-treasury money market funds as being as safe as treasury-only money market accounts right now. I have moved some funds as a result. Willing to lose the difference until this is sorted out. Still looking for CD's from stronger banks.