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

[Car-Guy]

My POV too!

 

[Car-Guy]

What I have noticed is that most brokered CDs with a Decent APY pay Quarterly if one is lucky, Bi-Annually or at Maturity. There seem to be very few decent longer-term CDs that pay monthly. There are some, but they seem few and far between. I am sure we could cherry pick some though.

That's a bummer... I like the monthly payouts.. At Schwab I have to go out to 4 and 5 years to find any that pay monthly these days. I'm not sure why that is, but at least there are still a bunch at shorter terms (2 and 3yr) that pay semi-annually. (Beats paying at maturity, IMO)

 

[pb4uski]

I don't get the attraction of monthly payouts. Are they paid directly to you? If so, then perhaps... but if it is just being credited to your brokerage account then what's the attraction?

I keep a year of withdrawals in an online savings account and have a monthly "paycheck" transfer from that account to the checking account that I use to pay bills. The online savings account gets replenished periodically from my other retirement accounts.

I don't need no stinking monthly income payments!

I have one monthly payer and quite candidly the bookeeping is a bit of a PITA.

 

[Car-Guy]

I don't get the attraction of monthly payouts. Are they paid directly to you? If so, then perhaps... but if it is just being credited to your brokerage account then what's the attraction?

For me, I reinvest the payouts in a MM (e.g. SWVXX). It's like compounding the interest and is immediately available. At least until I decide to buy another CD or use it for something else.

 

[ShokWaveRider]

I don't get the attraction of monthly payouts. Are they paid directly to you? If so, then perhaps... but if it is just being credited to your brokerage account then what's the attraction?

I keep a year of withdrawals in an online savings account and have a monthly "paycheck" transfer from that account to the checking account that I use to pay bills. The online savings account gets replenished periodically from my other retirement accounts.

I don't need no stinking monthly income payments!

I have one monthly payer and quite candidly the bookeeping is a bit of a PITA.

I think it is just what I am used to. I like to do my accounts monthly and like CarGuy put the proceeds in MM for something else. As I usually invest the Max FDIC in them, it is not a small amount. As it is a joint account, we can put up to $500k fully FDIC insured.

It is not clear (To Me) whether the APY includes the unpaid monthly returns either. So, if one invests $500k at 5% where does the monthly $2083 go in-between the payouts whether it is paid quarterly or biannually, as there is no Reinvest dividend option with brokered CDs. I can understand it is pointless for sums under say $50k.

 

[Montecfo]

I don't get the attraction of monthly payouts. Are they paid directly to you? If so, then perhaps... but if it is just being credited to your brokerage account then what's the attraction?

I keep a year of withdrawals in an online savings account and have a monthly "paycheck" transfer from that account to the checking account that I use to pay bills. The online savings account gets replenished periodically from my other retirement accounts.

I don't need no stinking monthly income payments!

I have one monthly payer and quite candidly the bookeeping is a bit of a PITA.

Bookkeeping?

Do tell.

 

[Tracer]

I may be the minority in this view, but I'm uneasy with purchasing a brokered CD with a callable feature. In my view it takes the certainty away from the reason why you buy a CD in the first place. The certainty of knowing that you put your money down and know exactly what you'll have at maturity.. full stop! I looked over the issues my broker offers and the tradeoff of getting the higher rate only to accept the possibility of having your multi-year CD called after 6 months was not worth it IMO. With a minimum amount of research, I found I can get those same higher rates (or in some cases even higher) and without a call feature by looking at those offered at a bank or credit union. Do I care that they are not in my broker account? No.

 

[Car-Guy]

I may be the minority in this view, but I'm uneasy with purchasing a brokered CD with a callable feature. In my view it takes the certainty away from the reason why you buy a CD in the first place. The certainty of knowing that you put your money down and know exactly what you'll have at maturity.. full stop! .

Well if you are in the minority, you are not alone. I don't/won't buy them.

 

[Chuckanut]

I may be the minority in this view, but I'm uneasy with purchasing a brokered CD with a callable feature. In my view it takes the certainty away from the reason why you buy a CD in the first place.

I have similar thoughts. As I build my CD/Bond ladder out to 5 years, it’s hard to believe that my 5 year steps on the ladder will be very strong if the bank can call the CD in the event of lower interest rates. The whole idea of buying 5 years is to reduce the risk that interest rates will take a dive and leave me with less interest income. The banks want to transfer the risk to me. Not so fast, Mr. Banker.

I have partially filled in my 5 year on my ladder with non callable CDs in the area of 4.7%+. The rest of the five year step is starting to be filled with TIPS that are now showing approximately a 2% fixed rate plus inflation. I think that’s are rather good deal. The idea is to reduce the risk of being stuck with low rates, and I think inflation plus 2% will help do that. If inflation does fall to the FED’s 2% goal, I will be a happy camper and worry less about not getting 5+% on my money.

FWIW, I have bitten on several 5 year CDs that are callable but also offer a nice premium in the interest rate, over 1.2% more. Compensate me for the risk Mr. Banker, or no deal. However, since these CDs may end up being short term, I don’t include them in my 5 year step. I mentally think of them as high yield shorter term investments (under 2 years) that might, if I am a bit lucky, produce a longer term bonus. What the accountants in the group will think of that, I don’t know.

So far, I have not done any corporate bonds. Everything is FDIC CDs, treasuries and a few Agency bonds. Belt and suspenders.

My 2 cents. YMMV.

 

[Earl E Retyre]

Totally agree. I rarely buy a callable CD.

 

[Montecfo]

Well if you are in the minority, you are not alone. I don't/won't buy them.

Same. Stretching for yield with callables will result in getting money back in a worse market.

 

[pb4uski]

Bookkeeping?

Do tell.

I run One-Step update in Quicken every week or two.

 

[jazz4cash]

I don't get the attraction of monthly payouts. Are they paid directly to you? If so, then perhaps... but if it is just being credited to your brokerage account then what's the attraction?

I keep a year of withdrawals in an online savings account and have a monthly "paycheck" transfer from that account to the checking account that I use to pay bills. The online savings account gets replenished periodically from my other retirement accounts.

I don't need no stinking monthly income payments!

I have one monthly payer and quite candidly the bookeeping is a bit of a PITA.

I don’t get it either unless one is spending the payment. Even then a buffer can smooth out cashflow. I was hoping for more discussion. It’s a situational event. When rates dropped to zero those credit union CDs compounding at 4% for 7yrs were fabulous.

 

[jazz4cash]

I may be the minority in this view, but I'm uneasy with purchasing a brokered CD with a callable feature. In my view it takes the certainty away from the reason why you buy a CD in the first place. The certainty of knowing that you put your money down and know exactly what you'll have at maturity.. full stop! I looked over the issues my broker offers and the tradeoff of getting the higher rate only to accept the possibility of having your multi-year CD called after 6 months was not worth it IMO. With a minimum amount of research, I found I can get those same higher rates (or in some cases even higher) and without a call feature by looking at those offered at a bank or credit union. Do I care that they are not in my broker account? No.

I agree also, but I put a value on the no call feature. It’s worth ~.5% on a 5yr in my view. I’d love to know how you are matching callable rates to non callables! So far I have only non callable CDs but I do have some callable bonds.

 

[CatinKS]

Here is a CD map you can use for local banks. Be sure to click credit unions also at the top. Move the map to your area.


https://www.depositaccounts.com/banks/rates-map/

 

[Tracer]

Best CD Rates
Nationwide CD Offers:

11 Months or Less
One American Bank 5.85% 5.5-month CD ($100k minimum)
Presidential Bank 5.75% 7-month CD
Abound CU 5.75% 10-month CD
Blupeak 5.75% 9-month CD
Credit Human 5.75% 6-11 month CD (join via ACC)
Finworth 5.60% 9-month CD ($50k minimum)
NASA FCU 5.55% APY 9-month CD (review)(free to join)
Bellco CU 5.50% 6-month CD ($5 to join)
Hanscom FCU 5.50% 6-month CD
One American Bank 5.45% 5-month CD ($5k minimum)
DCU 5.39% 7-month CD
Ally Bank5.25% 8-month CD
Bask Bank 5.10% 6-month CD
Brilliant Bank 5.10% 3-month CD
Brilliant Bank 5.05% 9-month CD
Marcus Bank 5.05% 10-month CD
Ally Bank 5.00% APY 9/18-month CD
Gateway First 5.00% 7-month CD
Prime Alliance 5.00% 6-month CD
Cit Bank 5.00% 6-month CD
Heritage Bank 5.00% 5-month CD ($25,000 minimum)
Quorum FCU 5.00%-5.10% 11-month CD (join with ACC membership free)
Unify FCU 5.00% APY 9-month CD (free to join)
America First 5.00% 6-17 month CD
Newtek 4.90% 6-month CD
Alliant 4.75% 6-month CD
Jovia CU 4.75% 11-month CD ($5 to join)
Heritage Bank 4.44% APY 6-month or 12-month CD ($25,000 minimum)
My eBanc 5.01% 6-month CD
Chase 4.00% APY 3-Month CD ($100k Minimum) (review)
Parsons FCU 4.75% APY 6-month CD

12-18 Months
Schwab up to 5.60% APY brokered CD 10-18 months (review)
Vanguard up to 5.55% APY brokered CD 10-12 months (review)
Fidelity up to 5.30% APY brokered CD 12 months (review)
Merchants Bank 5.92% flex CD 12/24/36 month (rate changes, tied to fed rate) (our review)
Amboy 5.30% variable rate 2-year CD

Credit Human 6.00% 12-17 month CD
Finworth 5.80% 13 or 15-month CD ($50k minimum)
All in CU 5.75% 12-month CD (join with ACC membership)
Inova FCU 5.75% 12-month CD (join with $5 Tru Direction membership)
CFG 5.67% APY 12-month CD
Connexus CU 5.61% APY 12-month CD (minimum $5,000)(join w/ $5 donation)
Barclays 5.50% 12-month CD
Forbright 5.50% 12-month CD
Blupeak 5.50% 12-month CD
PopularDirect 5.50% APY 12-month CD ($10,000 minimum)
Pacific Western Bank 13 month CD 5.50%
USAlliance 5.40% 12-month CD
Interior FCU 5.38% 12 or 18-month CD
NASA FCU 5.35% APY 15-month CD (review)
Brio 5.35% 12-month CD
Quontic 5.30% 12-month CD
Elements CU 5.30% APY 8-month or 13-month CD
Modern Bank 5.25% APY 18-month CD
Comenity ‘Bread’ 5.20% APY 12-month CD
Alliant 5.15% 18-month CD
Colorado Federal 5.15% APY 12-month CD
Nuvision CU 5.15% 13-month CD
Union Square CU 5.12% 12-month CD
BMO 5.10% 12 or 13-month CD
My eBanc 5.10% 12-month CD (review)
Limelight 5.10% 12-month CD
First Internet Bank 5.06% APY 12-month CD
Pacific Western Bank 7/13 month CD 5.05%
State Bank of Texas 5.05% APY 12-month CD (minimum $25,000) (our review)
First Tech CU 5-5.05% 13-month bump up CD
Discover 5.00% APY 18-month CD
Ally Bank 5.00% APY 9/18-month CD
Bask Bank 5.00% 12-month CD
Salem Five Direct 5.00% 6-12 month CDs
Bellco CU 5.00% 17-month CD ($5 to join)
Alliant 5.00% 12-month CD
Andrews FCU 5.00% 12-month CD (review)(join with $8 ACC donation)
Ivy Bank 5.00% 12-month CD
Valley Direct 5.00% 12-month CD
Live Oak Bank 5.00% 12-month CD (business CD)
Quorum FCU 5.00% APY 12-month CD (new money only)
Citizens Bank 5.00% APY 12-month CD
Sallie Mae 5.00% 18-month CD
Synchrony 4.90% 13-month CD
Discover 4.75% APY 12-month CD
Marcus Bank 4.75% APY 18-month CD
Ally Bank 4.75% 13-month CD
Marcus Bank 4.75% APY 12-month CD
TIAA 4.75% APY 12-month CD
Bask 4.70% APY 12-month CD
Cit Bank 4.65% 13-month CD
PenFed CU 4.65% APY 12-month CD
Mutual One 4.59% 18-month CD
M&T Bank 4.50% 15-month CD
American Express 4.15% APY 12-month CD
GTE Financial 4.13% APY 12-month CD (review)
Citibank 4.05% APY 12-month CD

19+ Months
Chartway CU 5.30% APY 13 or 23-month CD
Pelican State CU 5.27% 24-month CD
Parsons FCU 5.25% APY 24-month CD
Farmers Insurance FCU 5.00% 12/24/36/48/60-month (membership via ACC)
Comenity ‘Bread’ 5.00% APY 24-month CD
USAlliance 4.85% APY 24-month CD
Credit Human 5.00% 18-23 month CD
Connexus CU 4.76% APY 24-month CD (minimum $5,000)(join w/ $5 donation)
NASA FCU 4.60% APY 49-month CD (review)
U.S. Bank 4.40% 19-month CD
PenFed CU 4.45% APY 24-month CD
Fidelity Bank 4.35% 25-month CD
Capital One 4.10% 5-year CD
American Express 4.00% 24-month CD

 

[Car-Guy]

Here is a CD map you can use for local banks. Be sure to click credit unions also at the top. Move the map to your area.


https://www.depositaccounts.com/banks/rates-map/

I had not seen that before, thanks for sharing.

Interesting that 1yr CD rates seemed to be similar to brokered 1yr CD rates that I see at Schwab. However, if you change to 2,3,4 or 5 year CD's, rates at the local banks drop far below what I can get with brokered CD's. I wonder why?


Seems the local banks don't think the Fed will keep rates as high, longer term.

 

[Chuckanut]

Local Credit Union is offer 3.09% on 12-17 month CDs. So far I have not noticed any long lines of future CD owners outside the office.

 

[Gotadimple]

I had not seen that before, thanks for sharing.

Interesting that 1yr CD rates seemed to be similar to brokered 1yr CD rates that I see at Schwab. However, if you change to 2,3,4 or 5 year CD's, rates at the local banks drop far below what I can get with brokered CD's. I wonder why?


Seems the local banks don't think the Fed will keep rates as high, longer term.

Because when banks hook up with brokers, they pay a commission and the brokers handle all the sales. They can increase rates, but they have no major customer service effort because the brokers do all the work and just pass them the $$. They also don't have any follow-up effort to renew the CD at a different rate, because brokered CDs automatically liquidate at maturity.

 

[Car-Guy]

Because when banks hook up with brokers, they pay a commission and the brokers handle all the sales. They can increase rates, but they have no major customer service effort because the brokers do all the work and just pass them the $$. They also don't have any follow-up effort to renew the CD at a different rate, because brokered CDs automatically liquidate at maturity.

I think all of that is true, my question is why it doesn't work for longer terms like 2+ years.

 

[jazz4cash]

Because when banks hook up with brokers, they pay a commission and the brokers handle all the sales. They can increase rates, but they have no major customer service effort because the brokers do all the work and just pass them the $$. They also don't have any follow-up effort to renew the CD at a different rate, because brokered CDs automatically liquidate at maturity.

Wouldn't paying a commission make brokered CD rates lower than the local banks?

 

[copyright1997reloaded]

Wouldn't paying a commission make brokered CD rates lower than the local banks?

Well, those same local banks have expenses of their own related to the marketing, opening, and servicing of the CD's.

 

[JoeWras]

Local Credit Union is offer 3.09% on 12-17 month CDs. So far I have not noticed any long lines of future CD owners outside the office.

Full disclosure: DW used to work for a Credit Union.

Despite that, we've moved most of our assets away because they just can't compete. DW knows a bit about how the sausage is made, and the best she can summarize it is that they are more constrained.

The NCUA keeps a tighter lid on CUs. CUs are pushing the limits, especially with regard to risk based lending, but NCUA is going to monitor that. CUs traditionally invest in very safe treasuries, and as you can imagine, they have a problem with yields there. They have to let them roll off and that's going to take time.

Let's just say the NCUA does not want to see the CUs get into the same bind many of the regional banks are in. And that has CUs' hands tied.

If you need to sleep, you can read the NCUA's regulations here: https://www.ecfr.gov/current/title-12/chapter-VII

Open up "Subchapter A" and get bored to sleep.

Some CUs are large enough to explore the limits of the boundaries, so some CUs have decent rates. Those rates are discussed on this thread. They are not common to all CUs. Most CUs are run very conservatively so as to stay between the lines with the NCUA.

 

[jldavid47]

I don’t get it either unless one is spending the payment. Even then a buffer can smooth out cashflow. I was hoping for more discussion. It’s a situational event. When rates dropped to zero those credit union CDs compounding at 4% for 7yrs were fabulous.

Brokered CDs don't compound. A brokered CD paying interest monthly will pay the exact same amount of interest as a brokered CD that pays interest at maturity.

For example (numbers chosen for mathematical convenience), if you put $12,000 into a 5% one year brokered CD that pays at maturity, you will get $600 at maturity. If you buy the same CD and it pays interest monthly you will get $50 per month or $600 total. So what? If you take the interest monthly you can put it into a money market fund and compound your interest at whatever rate the money market fund is paying. Over the course of the year you will have slightly more money than if you only had interest paid at maturity. That is why some people prefer monthly payments even if they don't need the cash flow.

 

[Chuckanut]

Full disclosure: DW used to work for a Credit Union.

Despite that, we've moved most of our assets away because they just can't compete. DW knows a bit about how the sausage is made, and the best she can summarize it is that they are more constrained.

The NCUA keeps a tighter lid on CUs. CUs are pushing the limits, especially with regard to risk based lending, but NCUA is going to monitor that. CUs traditionally invest in very safe treasuries, and as you can imagine, they have a problem with yields there. They have to let them roll off and that's going to take time.

Let's just say the NCUA does not want to see the CUs get into the same bind many of the regional banks are in. And that has CUs' hands tied.

If you need to sleep, you can read the NCUA's regulations here: https://www.ecfr.gov/current/title-12/chapter-VII

Open up "Subchapter A" and get bored to sleep.

Some CUs are large enough to explore the limits of the boundaries, so some CUs have decent rates. Those rates are discussed on this thread. They are not common to all CUs. Most CUs are run very conservatively so as to stay between the lines with the NCUA.

Thanks for the information. I hope the CU’s do well. I should add that the low CU rate I mentioned is still much better than the sub 1% rate of a local BIG BANK.