Best CD & MM Rates Thread 2018 Archive

[audreyh1]

We need Audrey here to give us her reasoned approach to interpreting SEC yield vs other measures. I personally learned on this forum that SEC yield was the best measure of yield for a fund, as opposed to trailing market yield. The SEC yield plus factoring in duration is the best measure of a bond fund to inform decisions. In a rising intetest rate environment, like we are in now, the shorter the duration the better and SEC yield is always higher than TTM , and a more accurate measure of yields going forward. In a declining interest rate environment SEC yield is always less than TTM and a more realistic estimation of yield going forward.

I think the SEC yield is a valid way to compare bond funds at any given moment in time, and can give you an indication of the future return for a bond fund assuming a stable interest rate environment. But there are times where the distribution yield is higher or lower depending on interest rate changes. So I can't really explain more than you have in your post here.

I agree that the SEC yield being higher than the distribution yield is common in a rising interest rate environment and indicates that the distribution yield will rise in the future.

For the duration - that is an indication of how quickly a fund might recover from interest rate changes. If you are holding bond funds for a long time, but have some concerns about drawing form them, one way to handle it is to have a mix of durations - say cash/MM, short-term bond funds, and intermediate bond funds.

 

[Fedup]

We need Audrey here to give us her reasoned approach to interpreting SEC yield vs other measures. I personally learned on this forum that SEC yield was the best measure of yield for a fund, as opposed to trailing market yield. The SEC yield plus factoring in duration is the best measure of a bond fund to inform decisions. In a rising intetest rate environment, like we are in now, the shorter the duration the better and SEC yield is always higher than TTM , and a more accurate measure of yields going forward. In a declining interest rate environment SEC yield is always less than TTM and a more realistic estimation of yield going forward.

I understand if you compare bond fund to bond fund. In my case, it was thinking of comparing to Brokered CDs.

 

[audreyh1]

I understand if you compare bond fund to bond fund. In my case, it was thinking of comparing to Brokered CDs.

They are just not the same animal. Bond funds do not publish APR/APY. The SEC yield may be a crude approximation - but it makes certain assumptions that don't match how a bond fund actually works, such as the underlying bonds being held to maturity. It's just a snapshot in time.

You cannot predict the monthly/quarterly dividends that you will receive from a bond fund. They vary month to month. The underlying bonds each have their own payout schedule - some monthly, some quarterly, etc., and then bonds are bought and sold so the mix is changing.

And (with the exception of Treasury Bond funds or TIPs or US govt bond funds) they are not US Govt guaranteed or FDIC insured deposits. Bond funds have credit ratings - the lower the rating the higher the risk of default of a portion of the bonds making up the fund.

You can compare a CD to a govt-backed bond like a Treasury, or other govt-bqcked bonds, but as soon as you start buying bonds that are not US Govt guaranteed, you also have to deal with the credit risk issue.

 

[Aerides]

Ally has a deal thru Oct 21 - new and existing customers, a 1% bonus on new deposits up to $1k, as long as the deposits remain with Ally through Jan 2019:

https://allypaybacktime.com/

Their no-penalty CD is still at 2.1%, but this extra makes it very attractive to me to move some cash for a few months.

 

[jazz4cash]

Ally has a deal thru Oct 21 - new and existing customers, a 1% bonus on new deposits up to $1k, as long as the deposits remain with Ally through Jan 2019:

https://allypaybacktime.com/

Their no-penalty CD is still at 2.1%, but this extra makes it very attractive to me to move some cash for a few months.

Wow. I don’t see anything about this on the Ally site and didn’t get an email notice but it’s all over depositaccounts.com. Seems like banks are fighting for our money which is good. IRAs are excluded but it’s amazing that the No Penalty CD is included. Thanks.

 

[Golden sunsets]

Best CD & MM Rates Thread 2018 - 2019 - Please Post Updates Here

Ally has a deal thru Oct 21 - new and existing customers, a 1% bonus on new deposits up to $1k, as long as the deposits remain with Ally through Jan 2019:



https://allypaybacktime.com/



Their no-penalty CD is still at 2.1%, but this extra makes it very attractive to me to move some cash for a few months.

Up to 1K What am I missing here. If I transfer $1,000 I earn perhaps 3% instead of 2% on $1,000. So $10 for a year? I must not be undestanding this correctly. Please pick apart my math[emoji120]

Edit: Or do you mean an extra 1% on $100,000 which from now till the end of January would = roughly an additional $275?

 

[njhowie]

Ally has a deal thru Oct 21 - new and existing customers, a 1% bonus on new deposits up to $1k, as long as the deposits remain with Ally through Jan 2019:

https://allypaybacktime.com/

Thanks for that!

 

[njhowie]

Up to 1K What am I missing here. If I transfer $1,000 I earn perhaps 3% instead of 2% on $1,000. So $10 for a year? I must not be undestanding this correctly. Please pick apart my math[emoji120]

Edit: Or do you mean an extra 1% on $100,000 which from now till the end of January would = roughly an additional $275?

Yes - 1% bonus on up to $100k for max bonus of $1,000

 

[Aerides]

Yes, by "up to 1k" that means up to 1% on 100,000 just for putting your money there till the end of january. Not an extra 1% interest, but a bonus of 1% of the deposit.

So you'd earn (up to) an additional $1000 on 100k, in addition to 4 months at whatever interest rate your deposit/CD would earn in that timeframe.

 

[Dtail]

Yes, by "up to 1k" that means up to 1% on 100,000 just for putting your money there till the end of january. Not an extra 1% interest, but a bonus of 1% of the deposit.

So you'd earn (up to) an additional $1000 on 100k, in addition to 4 months at whatever interest rate your deposit/CD would earn in that timeframe.

If my math is correct, then one would earn 5.1% on their 100k investment for 4 months with using the 2.1% non penalty CD.

 

[njhowie]

If my math is correct, then one would earn 5.1% on their 100k investment for 4 months with using the 2.1% non penalty CD.

I think it will be higher - because technically, it only needs to be 3 months..."Maintain Funds until 1/15/2019", "Get cash bonus by 2/15/2019". So, you could remove the funds on 1/16 and you'd still get the bonus.

 

[Dtail]

I think it will be higher - because technically, it only needs to be 3 months..."Maintain Funds until 1/15/2019", "Get cash bonus by 2/15/2019". So, you could remove the funds on 1/16 and you'd still get the bonus.

Good catch. Agree.
Well njhowie - as a rate enthusiast what do you think of this deal?

 

[njhowie]

Good catch. Agree.
Well njhowie - as a rate enthusiast what do you think of this deal?

I like it - already opened the new account and signed up for the bonus. The time frame for getting the bonus is about average. But the bigger benefit is that you have such a high limit on how much you can do it for and flexibility so you can customize it to whatever amount you want to go with. You know every other deal is for deposit of $5k, $10k, $20k for up to maybe $250 or $300 bonus. I think HSBC was highest I've seen offering $750 for $100k. But again, whatever you're comfortable with you can do with this one from Ally. If you only want to do $5k for $50, go for it. Want $25k for $250, or $65k for $650 - no problem.

 

[Dtail]

I like it - already opened the new account and signed up for the bonus. The time frame for getting the bonus is about average. But the bigger benefit is that you have such a high limit on how much you can do it for and flexibility so you can customize it to whatever amount you want to go with. You know every other deal is for deposit of $5k, $10k, $20k for up to maybe $250 or $300 bonus. I think HSBC was highest I've seen offering $750 for $100k. But again, whatever you're comfortable with you can do with this one from Ally. If you only want to do $5k for $50, go for it. Want $25k for $250, or $65k for $650 - no problem.

Thanks.

 

[audreyh1]

Thanks for this!

The Deposit Accounts write up was quite clear.

I signed up for the bonus.

I opened a new no penalty CD, but had an error in the funding from an external account. I've done this before, so who knows. Got a message to call.

But I have several days to fund it again, so I'll try again tomorrow.

 

[njhowie]

Digital Credit Union - Primary Savings Account 5.12% APY on first $1000. Above the first $1000 APY is 0.25%. Considering whether it is worth the effort just to keep $1000 there. Though can open accounts for self, wife, child, etc. with $1000 each.

Membership if related in any way to current DCU member or related to employee of DCU participating employers, or live/work/worship/attend school in one of their communities. If new membership and unrelated, can join Reach Out for Schools for (tax deductible) $10.

https://www.dcu.org/personal-banking/savings-reg-shar.html

 

[Willers]

Ally has a deal thru Oct 21 - new and existing customers, a 1% bonus on new deposits up to $1k, as long as the deposits remain with Ally through Jan 2019:

https://allypaybacktime.com/

Their no-penalty CD is still at 2.1%, but this extra makes it very attractive to me to move some cash for a few months.

Thanks! Moved money back into Ally today!

 

[Golden sunsets]

Regarding Ally - now that I understand this new deal-(thanks for the explanation) - I'm in disbelief. We had a $100,000 plus interest CD mature 10/10 at NWFCU. With that money, last week we opened 2 money market accounts at CapOne and will receive $1,000 bonus (2 @ $500) some time within the next 60 days, plus of course their normal interest rate, which is 1.85% as long as it is on deposit there. BUT, I don't have to leave the money there for the 60 days. I verified this twice by phone with CapOne. Now... I can move that same $100,000 to Ally and open some new 11 month no penalty CD's (or whatever we choose, which incidentally was what we had been planning on doing with the maturing CD), leave the funds there until 1-15 and earn another $1,000 on the same $100,000, on top of the interest. I almost can't even calculate the rate of return on that same $100,000 over the 3 months. Note to dueling institutions: keep these deals coming!!!!

 

[audreyh1]

I think this is a pre-emptive move by Ally ahead of an anticipated flurry of end-of-year/holiday CD specials, etc. from competitors. It's pretty amazing that they only require to keep your money until 1/15, but that does get out past the holiday season.

I had kind of been waiting for those. I still have more CDs maturing in Dec, so I can still take advantage of them.

I believe CD rates are going to be higher in January anyway, so I'm not worried about having a decent place to move my funds to then.

 

[Henry Lili]

I think this is a pre-emptive move by Ally ahead of an anticipated flurry of end-of-year/holiday CD specials, etc. from competitors. It's pretty amazing that they only require to keep your money until 1/15, but that does get out past the holiday season.

I had kind of been waiting for those. I still have more CDs maturing in Dec, so I can still take advantage of them.

I believe CD rates are going to be higher in January anyway, so I'm not worried about having a decent place to move my funds to then.

Took the plunge on the Ally deal today. Still keeping some dry powder and have those old 5yr Pen Fed CDs maturing in December

 

[catotx]

Thanks for this!

The Deposit Accounts write up was quite clear.

I signed up for the bonus.

I opened a new no penalty CD, but had an error in the funding from an external account. I've done this before, so who knows. Got a message to call.

But I have several days to fund it again, so I'll try again tomorrow.

If I recall correctly, Ally's ACH system is not good. It steals your interest for a few days -- the money will disappear from your linked bank account on day T but will only appears on day T+3 (for example) on Ally.

I think a mobile check deposit can avoid this. Can anyone concur with the above?

 

[Henry Lili]

Took the plunge on the Ally deal today. Still keeping some dry powder and have those old 5yr Pen Fed CDs maturing in December

.Marcus, By Goldman, raised it's savings to 1.95%. Funny, I just pulled money from there to fund th Ally 2.1%CD with the 1% kicker. Still, a better deal. Things changing fast, though. Think keeping some powder dry until year end is prudent.

 

[audreyh1]

If I recall correctly, Ally's ACH system is not good. It steals your interest for a few days -- the money will disappear from your linked bank account on day T but will only appears on day T+3 (for example) on Ally.

I think a mobile check deposit can avoid this. Can anyone concur with the above?

Hmmm - I haven't had an issue at all with transfers to and from high yield savings. Occurs the next day. I usually push from my brokerage account and it's credited to the Ally high yield savings account the next day.

And last I looked - there may have been 1 day delay funding a CD pulling from an external account. Even though they say 3 business days, in practice for me it has been 1 day after being drawn from my external account. Maybe 2 days then from when initiated, but the funds didn't disappear from my external account until 1 day before appearing in my Ally CD.

 

[audreyh1]

Took the plunge on the Ally deal today. Still keeping some dry powder and have those old 5yr Pen Fed CDs maturing in December

Same here - I know I have those Pen Fed CDs maturing in early Dec, so I'll be able to take advantage of any outrageous offers then.....

 

[catotx]

Hmmm - I haven't had an issue at all with transfers to and from high yield savings. Occurs the next day. I usually push from my brokerage account and it's credited to the Ally high yield savings account the next day.

And last I looked - there may have been 1 day delay funding a CD pulling from an external account. Even though they say 3 business days, in practice for me it has been 1 day after being drawn from my external account. Maybe 2 days then from when initiated, but the funds didn't disappear from my external account until 1 day before appearing in my Ally CD.

I agree. Pushing money into Ally is not a problem. It gets credit immediately.

The problem is if you use Ally's ACH system. Ally's ACH system is generally 2 or 3 business days, unless you have satisfied their one-day ACH conditions.