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

[Montecfo]

^^^^^
Depends on what Powell says/does later this month.

Powell will hold steady this month. More important will be his rhetoric.

I expect him to play it straight down the middle and leave all options on the table for November.

 

[BrianB]

Again today there is one offering at Fidelity for a 3 yr / 5.0% / non-callable CD. It's from Discover Bank (same as the one yesterday - I just couldn't remember the bank name). Quantity 3105 available as of now. We'll see how long they last.

BrianB

 

[jldavid47]

Current best non-callable CD rates at Schwab:

12 mo - 5.45%
18 mo - 5.40%
24 mo - 5.25%
36 mo - 5.00%
48 mo - 4.80%
60 mo - 4.65%


First time I've seen a 3-year non-callable at 5% in this cycle. I did buy one at 5.10% back in March when the liquidity panic hit. The rise in CD rates seems orderly and systematic this time.

 

[Car-Guy]

^^^^^
These slowly rising rates on the longer term CDs are telling me that the big banks must be thinking that the FED has more rate increases coming and/or they will be slow at reducing rates in the future.

 

[RetiredAndLovingIt]

Frontwave Credit Union 18-Month CD Special Has Near Rate-Leading APY

Deal Summary: 18-month Certificate Special, 5.50% APY, $1k minimum deposit, new money.
Availability: Riverside, San Bernardino, and San Diego Counties, California.

https://www.depositaccounts.com/banks/frontwave-credit-union/offers/

Looks like they are also offering it in an IRA according to their website but I already pulled all my IRA money out when their IRA CD rates dropped to less than 1%.

 

[Sanstar]

Probably a dumb question, but when a 3 mos CD is marketed at 5% is that 5% annualized or is it 5% of the purchase at time of payout. So would a 5% CD be .42% / month or 5% of cost of CD added to purchase price of CD?

 

[Car-Guy]

Probably a dumb question, but when a 3 mos CD is marketed at 5% is that 5% annualized or is it 5% of the purchase at time of payout. So would a 5% CD be .42% / month or 5% of cost of CD added to purchase price of CD?

It's on an annualized rate. Not sure I understand the rest of your post.

 

[JoeWras]

^^^^^
These slowly rising rates on the longer term CDs are telling me that the big banks must be thinking that the FED has more rate increases coming and/or they will be slow at reducing rates in the future.

WSJ has an article on brokered CDs today. I underlined one section below that is part of the mix and is not meant to discount your point, which I think is also part of it.

Free link: https://www.wsj.com/finance/banking...h25lwlthhdz&reflink=desktopwebshare_permalink

Banks Load Up on $1.2 Trillion in Risky ‘Hot’ Deposits
Brokered deposits rose 86% from a year earlier, and regulators are growing concerned

Many industry players view brokered deposits as a double-edged sword. They can be a quick and easy way for a bank to shore up its balance sheet. The deposits are typically much more expensive because banks have to pay higher interest rates to lure in those customers, along with other fees. Regulators and bankers say they are also a type of “hot” money that is prone to disappear when a bank hits a rough patch, since these yield-seeking customers don’t tend to be loyal.

...

Brokered deposits are what they sound like: A bank can go to a third-party broker such as Morgan Stanley or Fidelity to find customers to invest in the bank’s high-yielding certificates of deposit. That allows the bank to get big influxes of money at once, rather than customer by customer.

 

[Car-Guy]

^^^^^
Interesting article... It sort of filled in "or" confirmed a few things for me away. Thanks

 

[pb4uski]

Current best non-callable CD rates at Schwab:

12 mo - 5.45%
18 mo - 5.40%
24 mo - 5.25%
36 mo - 5.00%
48 mo - 4.80%
60 mo - 4.65%


First time I've seen a 3-year non-callable at 5% in this cycle. I did buy one at 5.10% back in March when the liquidity panic hit. The rise in CD rates seems orderly and systematic this time.

So a 5 year ladder would be a hair over 5%... pretty good methinks!

 

[Healthy Lifestyle]

So a 5 year ladder would be a hair over 5%... pretty good methinks!

I am seeing similar 5 year cd rates on Merrill Edge this morning. I am retired age 66+ with rollover IRA in all fixed income investments.
Thought I would be happy seeing an opportunity to build a 5 year ladder at 5%, Do you think I am hesitating and overthinking the FOMO on higher for longer rates?

 

[Marc]

I am seeing similar 5 year cd rates on Merrill Edge this morning. I am retired age 66+ with rollover IRA in all fixed income investments.
Thought I would be happy seeing an opportunity to build a 5 year ladder at 5%, Do you think I am hesitating and overthinking the FOMO on higher for longer rates?

Is FOMO equivalent to Market Timing?

 

[audreyh1]

Is FOMO equivalent to Market Timing?

Fear Of Missing Out does often drive market timing.

 

[jldavid47]

Fear Of Missing Out does often drive market timing.

I'm not sure about that but it certainly drives people to buy assets that are greatly overvalued. FOMO simply one manifestation of greed (and the greater fool theory).

 

[pb4uski]

...Thought I would be happy seeing an opportunity to build a 5 year ladder at 5%, Do you think I am hesitating and overthinking the FOMO on higher for longer rates?

Perhaps. You could always skew the ladder to the first few years and then methodically extend it is early rungs mature.

That is what I ended up doing... not necessarily intentionally.. but my ladder is skewed to the early years and as maturities occur I am backfilling some rungs.

 

[Healthy Lifestyle]

Perhaps. You could always skew the ladder to the first few years and then methodically extend it is early rungs mature.

That is what I ended up doing... not necessarily intentionally.. but my ladder s skewed to the early years and as maturities occur I am backfilling some rungs.

Thanks for thinking of me pb, as I am presently extending short duration bonds at maturity in the 6-18 month window.
Soon I would like to go for longer duration bonds or cds in my IRA.

 

[Car-Guy]

1yr non callable CD's hit 5.5% today at Schwab.

 

[Montecfo]

The short term CD rates are great. It's a bit disappointing that with Treasury rates taking up slightly, we haven't seen much movement in these mid to longer term CDs.

But maybe it will happen yet.

 

[11522914]

The short term CD rates are great. It's a bit disappointing that with Treasury rates taking up slightly, we haven't seen much movement in these mid to longer term CDs.

But maybe it will happen yet.

It is a bit frustrating. Hopefully the 7 trillion+ in Treasuries maturing over the next year will help move long term Treasury rates higher and CD rates to follow.

 

[rkser]

In a TAXABLE account, are a 1 yr CD returns (Yield) -

still taxed as ordinary income ? as it is not a stock per se

OR

does the long term cap gains rate of 15%(for me) apply as it is a year long investment ?

 

[MichaelB]

In a TAXABLE account, are a 1 yr CD returns (Yield) -

still taxed as ordinary income ? as it is not a stock per se

OR

does the long term cap gains rate of 15%(for me) apply as it is a year long investment ?

This is taxed as ordinary income.

Edit to add - the yields on tax exempt munis are quite low. Unless one is paying high marginal state and federal tax rates, they really don’t make much sense now. This is (IIRC) quite a change from a few years ago.

 

[Car-Guy]

RANT on:

I've commented before that it really irritates me when a bank doesn't pay it's brokered CD's interest on time as promised. (I like to reinvest the payments in SWVXX as soon as I receive them). I've checked with Schwab and they assure me they post payments as soon as they receive them from the issuing banks. Most pay on time but about ~25% delay payments by a few days. (I can understand when a payment date falls on a weekend but not on a business day)

Now I'm thinking about starting to call the issuing banks myself and complain and/or posting negative feedback on the issuing banks website about their practice of delaying payments. My only way to fight back, I guess.


RANT off (for now)...

 

[11522914]

RANT on:

I've commented before that it really irritates me when a bank doesn't pay it's brokered CD's interest on time as promised. (I like to reinvest the payments in SWVXX as soon as I receive them). I've checked with Schwab and they assure me they post payments as soon as they receive them from the issuing banks. Most pay on time but about ~25% delay payments by a few days. (I can understand when a payment date falls on a weekend but not on a business day)

Now I'm thinking about starting to call the issuing banks myself and complain and/or posting negative feedback on the issuing banks website about their practice of delaying payments. My only way to fight back, I guess.


RANT off (for now)...

I haven't experienced that issue yet but agree it would irritate me too.

I also reinvest as soon as I receive them.

 

[Car-Guy]

^^^^^
Well I have about 20 active CD's now. Most of them pay monthly so lot's of opportunity for them to miss payments by a few days.

I've got another one "pending" payment from earlier this week.

I wonder what would happen if I was late on a loan or credit card payment?

 

[11522914]

^^^^^
Well I have about 20 active CD's now. Most of them pay monthly so lot's of opportunity for them to miss payments by a few days.

I've got another one "pending" payment this week.

Just start charging them a $35 late interest payment fee. They would do the same to you. [emoji6]

I wonder if you could complain to the CFPB.