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

[daver]

I spoke to their high net worth bond specialist assigned to our account that gave me this discount.

Update: I contacted Fidelity. You have to have a minimum $3M invested in bonds/CDs at Fidelity to qualify for any discounts and other services.

Thanks good to know, not quite there with 70/30 AA....

 

[njhowie]

Mine is reduced today in the amount of two open orders that settle 3/31.

Your "Cash available to trade" is reduced, not the amount in your settlement account/funds.

This is perfectly clear if you go to the balances tab where the details are itemized. It will show cash allocated, but not taken "Committed to open orders"

 

[Free bird]

I’m a little short to get a discount. I’m happy to get my money back & the 5.4% rate.

 

[Free bird]

The Zion 5.4% 18 month is gone from Vanguard. I feel like a thief. You people are a bad influence.

 

[jldavid47]

The Zion 5.4% 18 month is gone from Vanguard. I feel like a thief. You people are a bad influence.

Still $10,912,000 left at Schwab as I write this (12:54PM EDT)

 

[dobig]

I'm seeing it's still available.


Description Coupon Coupon Frequency Maturity Date sort up Fractional CD Yield Call
Protected Settlement Date Quantity Available Attributes Period


ZIONS BANCORPORATION 5.400 SEMIANNUAL 09/27/2024 No 5.400 Yes 03/31/2023 38,489 CP SFP
FDIC SO 18 MO

 

[Free bird]

At Vanguard?

 

[Freedom56]

Another $50M of the Zion 5.4%/18 month is available at Fidelity as well as $55M of the 5.35%/12 month.

Another batch of City National 3 year 5.1% came online along with the 5/5 once again.

 

[Free bird]

Maybe Vanguard will get some more.

 

[MuirWannabe]

Ok, I bought this CD about a week ago with a $50K amount through Vanguard. The value is now showing as $49,992.85. So, I’ve lost money on it?

Guess I’m not fully understanding brokered CD’s, but had assumed they would only go up with interest earned. Can someone help explain? Thanks.

RENASANT BANK TUPELO MS CD FDIC #12437 IAM 5.2% 12/22/23 03/22/23

 

[jldavid47]

I would also state (hoping to not be accused of being a doom and gloomier) that I *think* this is just a similar risk arb opportunity being presented to us because of the all-of-a-sudden need for banks to get capital and a flght-to-safety on Treasuries.

However, I also have in the back of my head "What if you are wrong. What if this is increased risk (as perceived by market prices) of FDIC insurance fund capabilities (which to backstop* above the $128 or so billion in the fund would require congressional action vs. Treasuries which are a direct government obligation". This makes me hesitate (a little) in terms of going all-in on the strategy to swap treasuries with CD's.)

At the moment, I am about 1/3 CD's and 2/3 Treasuries, but it is still big $ (to me at least) that I have invested/exposed to CD's.

This. ^^^^^^

The risk seems nonexistent but it isn't really. Blind chasing of yield has risks even if they are not apparent at the moment. (Note the word "blind." Someone like Freedom56 has a very measured approach to getting yield. That's not what I'm talking about). Things would have to get worse than 2008 for risks in CDs to become real. Not likely, but not impossible.

However, potential (low probability) risk has not stopped me from shifting a portion of our fixed income allocation from treasuries to CDs. In fact, our allocation at the moment isn't too much different that copyright's: 65% treasuries, 27% CDs, 5% agencies, 3% money market. We have no CDs longer than 3 years and I make sure I spread the money around to various banks to attempt to diversify potential risk.

You pay your money and you take your chances.

 

[ShokWaveRider]

Ok, I bought this CD about a week ago with a $50K amount through Vanguard. The value is now showing as $49,992.85. So, I’ve lost money on it?

Guess I’m not fully understanding brokered CD’s, but had assumed they would only go up with interest earned. Can someone help explain? Thanks.

RENASANT BANK TUPELO MS CD FDIC #12437 IAM 5.2% 12/22/23 03/22/23

I think that is based on if you sold it today. I must say it is a bit confusing. Same happens at Schwab.

 

[copyright1997reloaded]

Ok, I bought this CD about a week ago with a $50K amount through Vanguard. The value is now showing as $49,992.85. So, I’ve lost money on it?

Guess I’m not fully understanding brokered CD’s, but had assumed they would only go up with interest earned. Can someone help explain? Thanks.

RENASANT BANK TUPELO MS CD FDIC #12437 IAM 5.2% 12/22/23 03/22/23

There is a secondary (post auction) market for brokered CD's. That is a good thing in that you can sell it (if desired). The price at which you would be able to sell is determined by the market of sellers and potential buyers. So, yes, if you sold it TODAY you would lose money on it. That is what "Mark to Market" pricing shows on your position page. If you HOLD TO MATURITY you will get the terms of the CD (assuming the bank doesn't go under and the FDIC system doesn't collapse).

ETA: If rates go up (e.g. to 5.5%), people offering to buy your 5.2% would only RATIONALLY do so if they could get it at a discount sufficient to be as good as or better the current rate. If rates go down (e.g. to 4%), you would likely be able to sell it at a premium.

 

[simple girl]

I think that is based on if you sold it today. I must say it is a bit confusing. Same happens at Schwab.

Agree...I had the same reaction when I first saw the value go down...was wondering what I did wrong. Then I figured it out.

 

[njhowie]

Ok, I bought this CD about a week ago with a $50K amount through Vanguard. The value is now showing as $49,992.85. So, I’ve lost money on it?

Guess I’m not fully understanding brokered CD’s, but had assumed they would only go up with interest earned. Can someone help explain? Thanks.

RENASANT BANK TUPELO MS CD FDIC #12437 IAM 5.2% 12/22/23 03/22/23

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.

 

[JohnDoe]

I am learning a lot just reading this thread.

How do you know how much is available? Is there a calculation based on the quantity?

Thanks.

 

[jldavid47]

How do you know how much is available? Is there a calculation based on the quantity?

On Schwab it's the "Max" column. That's the number of $1,000 CDs available.

 

[MuirWannabe]

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!

 

[Freedom56]

Bonds and CDs don't trade every day. Fidelity and other brokers use third party pricing which is:

"third-party price:

Depicts a security's price formulated from a third-party vendor's proprietary pricing methodology; to establish this modeled price, a host of factors such as recent trade activity, size, timing, and yields of comparable bonds are used; in the case of a comparable bond, the vendor assigns a "fair market" yield to the security, then extrapolates a representative price based on the fair market yield assigned; in many cases, this modeled price provides price discovery and transparency for bonds that may not have traded for days, months, or even years; understandably, in scenarios where a security hasn't traded recently, attempting to accurately predict the "market price" can be a challenging endeavor; nevertheless, the vendor prices bonds on a daily basis

Note: Given the nature of the modeled pricing provided, it is not accurate to characterize such pricing as a "closing price" or to suggest that the price was based on specific recent (prior day's end of day) trading activity"

Third party pricing tends to estimate on the low side and sometimes as much as 6% lower in some cases if the security has not traded for a long time. If you are holding a CD/Bond to maturity, you should ignore it. If you need to liquidate a position, you need to request a bid if none exists.

 

[Brook2]

Homemade mutual fund of CD's?

I want to post this topic here because you all love CDs.

My situation: I want part of my IRA portfolio to be FDIC insured, therefore I'm now pretty much limited to CD's if I want any kind of return, so I am trying to make my own homemade FDIC mutual fund (joke)using individual CD's, but I groan when I think of keeping track of 100 CDs. In order to simplify this, would it be reasonable to just find 3 or 4 CDs at terms I like and by a lot of each, (ladder 3mo -2 years since that range seems be best rates)? Then I could just re-shop and revaluate every 3-6 months? I'd rather have 5-10 CD's instead of 100-200 based on what daily deal I find - because having 10 already is becoming a bit of a hassle trying to keep track of the ladder balance, rate etc.

 

[Echard]

I pulled the trigger on several CD's today of varying maturities. Before I did, I went back and double, triple and quadruple checked bond yields of various ratings and maturities. I found nothing that looked like a reasonable compensation for the extra risk above CD risk.

 

[Free bird]

Thank you

 

[Echard]

City National 5% 5 year CD is back. On Vanguard.

 

[creekstone]

Is it possible that not everyone sees the same CDs on Vanguard? For example, your state of residence might impact what is available?

 

[pb4uski]

I want to post this topic here because you all love CDs.

My situation: I want part of my IRA portfolio to be FDIC insured, therefore I'm now pretty much limited to CD's if I want any kind of return, so I am trying to make my own homemade FDIC mutual fund (joke)using individual CD's, but I groan when I think of keeping track of 100 CDs. In order to simplify this, would it be reasonable to just find 3 or 4 CDs at terms I like and by a lot of each, (ladder 3mo -2 years since that range seems be best rates)? Then I could just re-shop and revaluate every 3-6 months? I'd rather have 5-10 CD's instead of 100-200 based on what daily deal I find - because having 10 already is becoming a bit of a hassle trying to keep track of the ladder balance, rate etc.

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.