Best CD, MM Rates & Bank Special Deals Thread 2022 - Please post updates here

[ShokWaveRider]

There is a lot of talk here about "Consolidation" of institutions. I assuming you all mean Vanguard, Fidelity or Schwab?

Perhaps there should be a separate thread about where folks consolidate.

 

[lucky penny]

VMFXX is the settlement fund in my taxable Vanguard account. It currently pays 2.11 percent, based on the 7 day SEC yield. The settlement account is the one that money enters and exits Vanguard. VMRXX is not the settlement account. You buy and sell the shares in that fund and the money goes through the settlement account in both directions. VMRXX currently pays 2.12 percent. So, to buy VMRXX or sell it and move the money somewhere else, you go through the settlement account, VMFXX.

Thanks for this explanation! I see that VMFXX is shown as the settlement fund in my account too & that I can add money to that account. So, essentially the idea is to put $$ into that account & let it sit there earning a nice return until something better comes along? (Are the earnings in that account interest or dividends?)

This raises another question: a few years ago when VG was pressuring everyone to move their investments into the brokerage account, I spoke to a VG rep who set that up & moved my two bond funds into the brokerage account, but for some reason my taxable VTSAX account didn't get moved there. Since then I haven't done much with the bond accounts but I've moved money easily into & out of VTSAX account without involving the settlement fund, which is why I'm unfamiliar with it. Is there any reason why VTSAX should or shouldn't be moved into the brokerage account? (Sorry this is off-topic, but I probably need to know this...)

 

[freedomatlast]

I've been meaning to ask this question for a while:

I currently have money in VMRXX (VG's Cash Reserves Federal Money Market Fund Admiral Shares, which is showing a 7-day yield of 2.12%) & I've been assuming that's the "settlement fund" everyone is referring to -- is it? Can I simply transfer funds in & out of that fund to my bank or any other account?

I haven't transitioned to Vanguard's Brokerage platform yet and I use VMRXX as the account to transfer funds in and out of my bank or any other account.

Maybe it's because I haven't transitioned to the Vanguard Brokerage account yet that I don't see any account specifically designated as a Vanguard 'settlement account'.

I tried to set up a similar account at Fidelity using FZDXX but what should have been relatively simple transaction, turned into a complicated mess, so I gave up and am back using my Vanguard account for these types of transactions.

 

[Car-Guy]

There is a lot of talk here about "Consolidation" of institutions. I assuming you all mean Vanguard, Fidelity or Schwab?

Perhaps there should be a separate thread about where folks consolidate.

Go ahead, might be interesting....

For me I consolidated at Schwab. Reason? I been using them for over 40 years and already had a regular brokerage, IRA and checking account there. They seem to be a full service company (or at least meet my needs). I even have a FA assigned to me although they switch them around so often, I can't keep track. Some have been really good, others not so much. (What do you expect for free) However, their customer service phone service and web interface have been excellent.

I've gone from 7 or 8 financial institutions to 2. (not counting credit cards)

 

[jazz4cash]

There is a lot of talk here about "Consolidation" of institutions. I assuming you all mean Vanguard, Fidelity or Schwab?

Perhaps there should be a separate thread about where folks consolidate.

I assume consolidation means using a limited number of financial institutions selected based on safety, convenience, and competitive offerings. It could be a combination of 1-3 brokers, banks, or credit unions. That is opposed to having 5 or more institutions some of which were selected for a one time bonus or CD special. Throw credit card accounts into the mix as well. I’ve probably had 15 such accounts at times but I’m aiming for 5. Unfortunately one of these will be Treasury Direct. A major factor for consolidation is to make things easier for DW if I pass before her. The more I think about it the more I realize 5 is not attainable for me.

 

[John Galt III]

** snip *** When it looks like the Fed is done hiking, I'll buy 3, 6, maybe 12 month T bills. ** snip **

Does anyone think there will be a period of flat rates, maybe 12 months, after rates stop rising, before rates start to decline? Or could rates make a sudden downward move, with no flat period? I guess the answer is "no crystal ball". But maybe there is a "typical" way rates change. Curious.

 

[Car-Guy]

^^^^^
I'd hope so, but I have no idea...Similar to market timing, albeit slower.

 

[Drake3287]

Being one to chase that never ending last interest dollar, my most recent $100k CD was rolling over at Luther Burbank S&L here in California at 2% for another 12 months. Knowing that I had already rolled over another large CD at another bank for 2.75%, I simply called and asked about having them match this rate. Surprising they couldn't have been nicer over the phone and agreed to the 2.75% match.

Bottom line, it pays to ask. All they can do is say no.

 

[mrfeh]

Does anyone think there will be a period of flat rates, maybe 12 months, after rates stop rising, before rates start to decline? Or could rates make a sudden downward move, with no flat period? I guess the answer is "no crystal ball". But maybe there is a "typical" way rates change. Curious.

Nobody knows. Will depend on what happens with inflation, if there is a recession, etc.

The important thing to remember is that rates are set by the market, not the FOMC, and the market has already taken the anticipated rate hikes into account.

 

[Dash man]

DW just rolled her 401k into a tIRA. What’s the best Fidelity money market to put the funds in until we allocate all the money? We don’t want to have to maintain a high balance since it will be invested over the next six months. I personally use Schwab, so I’m not used to Fidelity.

 

[disneysteve]

Being one to chase that never ending last interest dollar, my most recent $100k CD was rolling over at Luther Burbank S&L here in California at 2% for another 12 months. Knowing that I had already rolled over another large CD at another bank for 2.75%, I simply called and asked about having them match this rate. Surprising they couldn't have been nicer over the phone and agreed to the 2.75% match.

Or you could have moved the money to your brokerage account and gotten a CD for 3.00% and earned an extra $250 for the year if you really wanted to chase every last dollar of interest.

 

[Drake3287]

Or you could have moved the money to your brokerage account and gotten a CD for 3.00% and earned an extra $250 for the year if you really wanted to chase every last dollar of interest.

True, I do have a brokerage account with Raymond James which handle my other investments but I have to admit I like having real-time control over some of these CD investments. Sort of a throw back to my original do-it-yourself early 1990's era of CD's. And 10% rates if I remember right!

 

[disneysteve]

True, I do have a brokerage account with Raymond James which handle my other investments but I have to admit I like having real-time control over some of these CD investments. Sort of a throw back to my original do-it-yourself early 1990's era of CD's. And 10% rates if I remember right!

Buying CDs through your brokerage is just as do-it-yourself as buying them straight from the bank so not really any difference that way. You have just as much control.

 

[Graybeard]

I've been meaning to ask this question for a while:

I currently have money in VMRXX (VG's Cash Reserves Federal Money Market Fund Admiral Shares, which is showing a 7-day yield of 2.12%) & I've been assuming that's the "settlement fund" everyone is referring to -- is it? Can I simply transfer funds in & out of that fund to my bank or any other account?

I'm confused because I also see listed in my Brokerage Acct something called "Vanguard Federal Money Market Fund (Settlement fund)", which shows a balance of $0 funds available. Can someone please explain in general how & when funds move in & out of that account, and more to the point, whether I would need to use that account at all if I want to transfer funds in & out of VMRXX for the short-term?

2 different funds. The Federal Money Market Fund VMFXX is different from the Settlement Fund but the SF yield is the same as VMFXX, this is confusing. If you want to buy CDs or Treasuries et al in your taxable account, the money has to be in the Settlement Fund. I made the mistake thinking the SF and VMFXX are the same fund and had money in VMFXX and nothing in the SF. When I tried to buy T bills it said I did not have funds available to trade. Just beware of this.

 

[COcheesehead]

2 different funds. The Federal Money Market Fund VMFXX is different from the Settlement Fund but the SF yield is the same as VMFXX, this is confusing. If you want to buy CDs or Treasuries et al in your taxable account, the money has to be in the Settlement Fund. I made the mistake thinking the SF and VMFXX are the same fund and had money in VMFXX and nothing in the SF. When I tried to buy T bills it said I did not have funds available to trade. Just beware of this.

At Fidelity, you don’t need the funds in the settlement in order to buy. They will liquidate your MM first to settle the buy. You will also need to rebuy the MM in order to get funds back into the higher yielding fund. I hold FDZXX yielding 2.2%. It works like a settlement with a little bit of extra effort for the buys.

 

[mpeirce]

I'm surprised by how many people are willing to forgo a half percent interest just to consolidate.

I don’t really view my “cash” as investments - that’s all in the stock market. For us, cash is there for spending in the short term. It’s nice to make a little extra on it, but that’s not really the priority (easy access and safety are).

 

[copyright1997reloaded]

I just put in an order for the 180-day treasury bills being auctioned Monday (8/22). Six month t-bills are currently north of 3%. I might have grabbed some of those high rate CD deals, but I am pondering moving next year and want to remain flexible in terms of cash in case I need to buy another home (e.g. prior to selling the current one).

Here's a graph of the treasury issue yield curve:
https://www.ustreasuryyieldcurve.com/

For anyone buying this today, rates (as I type this) for the 6-month bill are 3.166%. (Note that things can move up/down between now and the auction, and the auction rate can move it given competitive bid demand/non-demand).
https://www.cnbc.com/quotes/US6m

 

[Dash man]

For anyone buying this today, rates (as I type this) for the 6-month bill are 3.166%. (Note that things can move up/down between now and the auction, and the auction rate can move it given competitive bid demand/non-demand).

https://www.cnbc.com/quotes/US6m

I put in a $200k order for the 2-year treasury note auction tomorrow. Hoping for a nice surprise.

 

[Dash man]

For anyone buying this today, rates (as I type this) for the 6-month bill are 3.166%. (Note that things can move up/down between now and the auction, and the auction rate can move it given competitive bid demand/non-demand).

https://www.cnbc.com/quotes/US6m

6-month treasuries went for 3.204%

 

[Montecfo]

6-month treasuries went for 3.204%

That is pretty strong!

 

[JoeWras]

13 went at 2.798%.

 

[JoeWras]

It seems everyone was feeling great about the gasoline/oil drop, and then the Fed minutes came out and they basically said: "Hold your horses, there!"

We collectively have very short attention spans. In April it was the end of the world. In July, it was party time. All based on what we feel the easiest, i.e. gasoline prices.

 

[RetiredAndLovingIt]

Still have not bought my first 4 week t-bill yet
Looking at it right now in Fidelity I would hit Trade to buy 1($1000) for a 1 month Treasury, make sure I have $1000 in my account auto roll yes/no preview and finalize order, is it really that simple?
If I wanted to go smaller ($200) I would have to buy via Treasury direct website?

 

[jim584672]

$100 is the minimum denomination for a T-Bill according to TreasuryDirect. Corrected this post from $1,000 which was incorrect.

 

[copyright1997reloaded]

Still have not bought my first 4 week t-bill yet
Looking at it right now in Fidelity I would hit Trade to buy 1($1000) for a 1 month Treasury, make sure I have $1000 in my account auto roll yes/no preview and finalize order, is it really that simple?
If I wanted to go smaller ($200) I would have to buy via Treasury direct website?

I'm using Schwab (not Fidelity), but yes pretty much that simple. 1K min. at Schwab.

ETA: Since I also have a Fidelity account I took a look there at the process, seems very similar. 1K min also.

Note (pun intended) that bills are priced at a discount to the maturity value (assuming positive interest rates), i.e. they pay no coupon. Notes/Bonds pay periodic interest.