20 year CD 3.2%

[pletal]

Good Morning, I was looking on Fidelity today and Wells Fargo has a 20 year Cd for 3.2% Callable beginning in 2022. Was thinking about putting some money into that cd. Any thoughts?

 

[Scuba]

I would not buy a long-term CD in a rising rate environment. There are many high quality corporate bond issues paying better than CD's. Totally liquid vs a CD.

 

[Golden sunsets]

What is the withdrawal penalty? If it is only 90 days it would pay for itself in a very short period of time while waiting for better rates.


Sent from my iPad using Early Retirement Forum

 

[pletal]

What is the withdrawal penalty? If it is only 90 days it would pay for itself in a very short period of time while waiting for better rates.


Sent from my iPad using Early Retirement Forum

Being A brokered CD I believe withdrawal rates do not apply, But there should be no need to sell it on the open market. I have figured my retirement at a 2.5% return . I have been hearing about rates going up for 7 years. Have a very good CD ladder going out about ten years now.

 

[jetpack]

I've seen 8 year CDs at like 3% .. 12 more years for extra .2% ?

 

[LARS]

Wouldn't touch with a 20 foot ladder...

 

[Sunset]

I wouldn't bother with it.
I think over 20 years, the S&P 500 will return approximately 6% a year.
It comes with about a 2% dividend, so the stock only has to rise more than 1.2% per year avg to beat the CD.

 

[ShokWaveRider]

I will be looking for 3%+ CDs when mine expire in January of 2019. I currently have 3% CDs and live quite comfortably on the proceeds.

 

[IMATERP]

I generally stay away from callable CDs, Smart Notes, etc. most of the callable long term issues that I purchased in the early-mid 2000's were eventually called.

I do have a couple of Notes and Cd's which are not callable laddered to 2024.

My only concern regarding any fixed income product purchased via Fidelity is their disclaimer "that their fixed income product is designed for the long term," and their fixed income staff have let me know that their fixed products are difficult to sell on the secondary market.

With this in mind, I try to keep my ladder within 10 years.

Michael

 

[pletal]

I've seen 8 year CDs at like 3% .. 12 more years for extra .2% ?

That is great where may I find them?

 

[jebmke]

I'd go with a Tip before I'd do anything nominal for 20 years.

 

[audreyh1]

That is great where may I find them?

They sometimes are offered near the end of the year. CD rates have been creeping up, so chances are some will appear by Nov. I bought some 3% 7 year CDs in January 2017.

 

[jetpack]

For 8 year CDs, I'm looking at brokered CDs at Vanguard.

I've also bought some callable CDs last year, for example, a 3.3% for a 7 year CD. It got called after 6 months... so, I ended up with a 6 month 3.3% CD!

 

[wolf]

Wouldn't touch with a 20 foot ladder...

+1, but would use 100 foot ladder, ha