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

[erkevin]

Wells Fargo has a non-callable 2-year CD with a YTM of 5.116% (coupon 5%) and it is a monthly payer.
ID# 949764DA9

 

[wearefinishedworking]

Our Capital One high yield savings account is now at 4.15%. Cannot beat that for keeping our slush fund handy and growing. We keep almost a year of expenses there now.

 

[ShokWaveRider]

Our Capital One high yield savings account is now at 4.15%. Cannot beat that for keeping our slush fund handy and growing. We keep almost a year of expenses there now.

Decent Brokerage MM accounts are now paying 5%+ or pretty close. That beats it. Not trying to be cocky, but there are better. Probably not as liquid though (1 - 3 days clearance).

 

[Earl E Retyre]

Wells Fargo has a non-callable 2-year CD with a YTM of 5.116% (coupon 5%) and it is a monthly payer.
ID# 949764DA9

Thanks! Just bought some.

 

[njhowie]

Wells Fargo has a non-callable 2-year CD with a YTM of 5.116% (coupon 5%) and it is a monthly payer.
ID# 949764DA9

DSN6Q5846 at Fidelity

 

[Montecfo]

Decent Brokerage MM accounts are now paying 5%+ or pretty close. That beats it. Not trying to be cocky, but there are better. Probably not as liquid though (1 - 3 days clearance).

CFG Bank HY MM 5.17%.

With Powell's comments it seems the short end could go higher yet.

 

[Freedom56]

With Powell's comments today, the short end is going to breach 6% soon. With the treasury flooding the market with long term notes and bonds later this year and into 2024, long rates have nowhere to go but up.

 

[Montecfo]

^^^ well they have had nowhere to go but up for a while now, but they have gone down.

He seems committed to recession which is in essence committing to rate cuts.

I would like to see a normal yield curve. This inversion is bad for stocks and midterm debt investors.

 

[ShokWaveRider]

I am for stuffing our complete nest egg into 6% CDs, when and if they materialize, but some of ours need to mature first. I am hoping these rates continue for another year ...... or wishfully thinking 2.

 

[Freedom56]

A recession is not likely anytime soon. The higher rates go, the more income those people buying CDs, MM funds, agency and corporate notes will earn and spend. We are entering a generational change in fixed income investing. You can earn $54K per $1M with T-Bills and CDs, or $51K per year with MM funds, all with zero risk. That is 10 times or more higher than early 2022. Some of that excess income is returning to the economy in the form of travel and leisure and home improvement.

 

[GenXguy]

A recession is not likely anytime soon. The higher rates go, the more income those people buying CDs, MM funds, agency and corporate notes will earn and spend.

I'm not spending it. With inflation and fed/state taxes both being so high, I have to keep reinvesting all the interest/dividends, and the income is still less than inflation after taxes. So, I'm still falling behind. There's no extra to spend.

A 5% CD gets me about 3.7% income after taxes, that's after losing 20% of spending power over 3 years when inflation was high as 9% while the best CDs were renewing at less than 1%. Even catching up is impossible, let alone having extra to spend.

 

[ShokWaveRider]

A recession is not likely anytime soon. The higher rates go, the more income those people buying CDs, MM funds, agency and corporate notes will earn and spend. We are entering a generational change in fixed income investing. You can earn $54K per $1M with T-Bills and CDs, or $51K per year with MM funds, all with zero risk. That is 10 times or more higher than early 2022. Some of that excess income is returning to the economy in the form of travel and leisure and home improvement.

I always told DW, if interest rates of return were 4%, we can live very comfortably, 5% and we live like kings and queens, at 6% ....... well

 

[GenXguy]

I always told DW, if interest rates of return were 4%, we can live very comfortably, 5% and we live like kings and queens, at 6% ....... well

Is it all in a Roth account? In my non-retirement savings, the taxes and inflation offset all the gains for me up to about 7%.

 

[Freedom56]

I always told DW, if interest rates of return were 4%, we can live very comfortably, 5% and we live like kings and queens, at 6% ....... well

Many are living like kings and queens as they should. Savers were punished for over 15 years that trend is unwinding. I have never seen business/first class 100% full on airlines with mostly leisure travelers. Restaurants are hotels are doing well. Gas prices are down so people are also driving by car. We returned from a 7 week trip to Switzerland earlier this month, and the airports and cities were packed with travelers. I can just imagine what it will be like this summer.

 

[GenXguy]

Many are living like kings and queens as they should. Savers were punished for over 15 years that trend is unwinding. I have never seen business/first class 100% full on airlines with mostly leisure travelers. Restaurants are hotels are doing well. Gas prices are down so people are also driving by car. We returned from a 7 week trip to Switzerland earlier this month, and the airports and cities were packed with travelers. I can just imagine what it will be like this summer.

I doubt the increase in interest rates on CDs has much to do with record travel expected over the holiday, especially when it's a net loss after taxes and inflation. Costs to fly are way up. Restaurants are doing ok, trying to tack on extra fees to try to stay afloat amid high inflation. Customers are resisting. Gas prices are about 60% higher now than what I was paying back in 2020. The higher interest rates actually work against you because they generate more income taxes, and the higher taxable income means you get less subsidies on ACA health plan, while inflation erodes anything remaining of the interest you earned after taxes.

 

[Another Reader]

I dunno about the longer term, but I bought some 6 month, 5.35 percent Wells Fargo CD's yesterday morning. Looks like Fido has 9 month at the same yield today.

 

[MTB4me]

Yes, I had a CD with Bread Savings awhile back. They were formerly Comenity Direct. No issues with them while I was a customer.

Has anyone heard of or been a customer of Bread Savings before? I've seen a lot of advertisements lately on various social media platforms for them. I just haven't heard of them before. And yes, they are apparently FDIC insured.

Currently they offer a 12 month 5.25% CD and a 5% 24 month CD. Just curious if anyone has an opinion on them. I believe they're another online bank.

 

[Freedom56]

I doubt the increase in interest rates on CDs has much to do with record travel expected over the holiday, especially when it's a net loss after taxes and inflation. Costs to fly are way up. Restaurants are doing ok, trying to tack on extra fees to try to stay afloat amid high inflation. Customers are resisting. Gas prices are about 60% higher now than what I was paying back in 2020. The higher interest rates actually work against you because they generate more income taxes, and the higher taxable income means you get less subsidies on ACA health plan, while inflation erodes anything remaining of the interest you earned after taxes.

How is it a net loss after taxes and inflation? Are you trying to tell us that if you earned $4K per $1M invested you were better off than earning $55K per $1M now? That excess $51K per $1M more than covers inflation and taxes. We know many people who had millions sitting in savings accounts earning next to nothing suddenly earning an extra $10K per month in interest income just by shifting to MM funds or buying CDs. Those people are spending some of that money. The cost of flying first/business class is higher than during the pandemic when nobody was flying but below where they were in 2019. The only people that are feeling pain are those who live on debt.

 

[Chuckanut]

Many are living like kings and queens as they should. Savers were punished for over 15 years that trend is unwinding. I have never seen business/first class 100% full on airlines with mostly leisure travelers. Restaurants are hotels are doing well. Gas prices are down so people are also driving by car. We returned from a 7 week trip to Switzerland earlier this month, and the airports and cities were packed with travelers. I can just imagine what it will be like this summer.

I recently returned from a road trip in the USA. I was going to drive here and there and not worry about a hotel room until 3:00 Pm at the earliest. I soon learned to plan at least two days in advance. Hotels were packed full, and room prices were high, especially at the last minute.

For years the young folks bought houses at mortgage rates I could not even dream of when I was in my 20's, 30's and 50's. 3.5% and less, amazing! I guess now it's our turn to collect some descent interest payments. I have a 5.75% agency bond that just passed its first call date. Not a peep from the issuer regarding calling the bond. That's fine with me. I talked with a young friend who is saving for his first house down payment. The bank was giving him a High-Return CD of 3.3%. He's now in 90 day CDs via Fidelity at well over 5% and a MM fund at nearly 5%. And housing prices are starting to drop as the higher interest rates (but still lower than anything I ever paid) are reducing demand. Win/Win.

 

[jldavid47]

It might be best if we got back to the intent of this thread and leave speculation and general interest rate discussions to the Golden Period thread.

 

[Freedom56]

Right now short term treasury's are a better buy than CDs. The spreads between short term treasuries and CDs are zero to negative which makes no sense. This is completely the reverse of the situation we had in March 23. It's better to buy treasury's now or stay in MM funds. Higher CD yields are coming.

 

[GenXguy]

How is it a net loss after taxes and inflation?[

Simple math. Because (interest minus taxes and adjusting the full CD for inflation). I gave specific figure in one of my recent posts showing the after-tax increase was less than inflation. But even worse, it's far from making up for 20% inflation in recent years, which will never be made up.

Are you trying to tell us that if you earned $4K per $1M invested you were better off than earning $55K per $1M now?

That's an out of context straw man that I never stated. In fact, I mentioned in a previous post that the 20% loss to inflation from previous years when interest was even lower isn't going to be made up despite better interest rates now that current rates will still result in a net loss in "real" purchasing power in a non-retirement account. The money is there, but the purchasing power is gone, so there's no extra to spend.

That excess $51K per $1M more than covers inflation and taxes.

In my non-retirement account, it would take about 7% interest at my current marginal federal and state tax rates to keep up with year over year inflation. 5% that I was getting on my renewals a few months back doesn't cut it. So no, the additional earnings aren't making up for taxes and inflation. And due to negative effects of having higher taxable income in regard to ACA subsidies, it's another negative for people under 65 that are trying to regular income for better subsidies. Higher interest rates are showing much higher income for me on paper, yet I'm not really getting ahead due to taxes and inflation, but it still works against me for the ACA (not currently using, but will next year, so this could be significant).

Like I said, even though I'm earning 5% interest before taxes and inflation, I'm actually losing purchasing power once those are factored in. So, there's nothing left to spend. This is going to be the same for most others, most people earning a much lower percentage than those of us on this forum in non-retirement accounts.

If someone isn't very good at math, they might actually "think" that's extra money when they are actually losing actual purchasing power. It will catch up with them eventually. Plus, they're still out what they lost out on the previous years up to now where inflation totaled closer to 20%.

A lot of people are spending, but it's not because CDs are suddenly giving them a lot of extra purchasing power to blow money.

 

[Freedom56]

Simple math. Because (interest minus taxes and adjusting the full CD for inflation). I gave specific figure in one of my recent posts showing the after-tax increase was less than inflation. But even worse, it's far from making up for 20% inflation in recent years, which will never be made up.

That's an out of context straw man that I never stated. In fact, I mentioned in a previous post that the 20% loss to inflation from previous years when interest was even lower isn't going to be made up despite better interest rates now that current rates will still result in a net loss in "real" purchasing power in a non-retirement account. The money is there, but the purchasing power is gone, so there's no extra to spend.

In my non-retirement account, it would take about 7% interest at my current marginal federal and state tax rates to keep up with year over year inflation. 5% that I was getting on my renewals a few months back doesn't cut it. So no, the additional earnings aren't making up for taxes and inflation. And due to negative effects of having higher taxable income in regard to ACA subsidies, it's another negative for people under 65 that are trying to regular income for better subsidies. Higher interest rates are showing much higher income for me on paper, yet I'm not really getting ahead due to taxes and inflation, but it still works against me for the ACA (not currently using, but will next year, so this could be significant).

Like I said, even though I'm earning 5% interest before taxes and inflation, I'm actually losing purchasing power once those are factored in. So, there's nothing left to spend. This is going to be the same for most others, most people earning a much lower percentage than those of us on this forum in non-retirement accounts.

If someone isn't very good at math, they might actually "think" that's extra money when they are actually losing actual purchasing power. It will catch up with them eventually. Plus, they're still out what they lost out on the previous years up to now where inflation totaled closer to 20%.

A lot of people are spending, but it's not because CDs are suddenly giving them a lot of extra purchasing power to blow money.

We are both under 65 and pay $1855 a month for a Bronze PPO with zero subsidies due to income cut-offs. Many people benefiting from higher interest rates are over 65 and are not on any ACA plans. You are presenting a pretty extreme case. More people qualify for ACA subsidies now than in 2020 due to the increase in limits. We are much better off today than in 2020. Fixed income investing is no longer a mental exercise. It's simple now. Buy a CD, treasury, agency or corporate note, collect interest through out the term, re-invest the interest and principal when the security matures.

 

[MichaelB]

<mod note> A reminder, this thread is not a discussion on the benefits of fixed income, it’s intended to highlight current rates and good deals.

 

[Momcpa]

Our local credit union sent an email......for any CD maturing in July or August, you can elect to roll it over into an 11 month CD at 5.25%. I have one due in July, and 2 in September. They won't consider the September ones. I appreciate that they let me know about this in an email, as I may have missed the offer if it was only posted on their website. This way I can chose to do it, or not, but at least I know it is being offered.