Al18
Full time employment: Posting here.
You can choose to have dividends reinvested or paid in cash
I am relying on interest income on FDIC accounts, what to do now?
- Thread starter DrgLrd
- Start date
almost there
Thinks s/he gets paid by the post
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- Sep 24, 2008
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If I was immortal, I would worry a lot more about inflation.
But, as I am not. Will just take whatever interest rates are given in a 5 year ladder.
Worrying about it is futile.
But, as I am not. Will just take whatever interest rates are given in a 5 year ladder.
Worrying about it is futile.
RetiredAndLovingIt
Thinks s/he gets paid by the post
If possible you might want to consider opening an account at Fidelity to check out all their fixed income options.
Being that you are out of the country unsure if they will let you open an account though.
I don't think they have guest access any more so if interested here is a link to their current new customer offer which is how I and many others here got started. It's basically $100 in free money if you qualify and you can withdraw it all after you get your bonus and keep it there for a short period.
https://www.fidelity.com/go/starter-pack
Check out these videos first though. This lady has tons of informative videos on how to buy within a brokerage account.
Being that you are out of the country unsure if they will let you open an account though.
I don't think they have guest access any more so if interested here is a link to their current new customer offer which is how I and many others here got started. It's basically $100 in free money if you qualify and you can withdraw it all after you get your bonus and keep it there for a short period.
https://www.fidelity.com/go/starter-pack
Check out these videos first though. This lady has tons of informative videos on how to buy within a brokerage account.
Inflation Numbers
"inflation is 6% and you will never keep up"
Inflation figures are different for everyone. A large part of that so called 6% ,is housing costs that have risen either through rents or mortgages or home prices.
However, if you already own a paid off home, then you can subtract a huge chunk of that inflation number from what yours may be.
"inflation is 6% and you will never keep up"
Inflation figures are different for everyone. A large part of that so called 6% ,is housing costs that have risen either through rents or mortgages or home prices.
However, if you already own a paid off home, then you can subtract a huge chunk of that inflation number from what yours may be.
engineernerd
Recycles dryer sheets
Hi, DrgLrd! I won't ask you how serious you are about that moniker! ;-)
Going with your assumption that inflation doesn't matter to you, I personally would prefer FDIC-insured CDs to MYGAs, just because it's unclear to me what would happen to your money if the MYGA-offering insurance company went bust or failed to honor the contract for whatever reason. If MYGAs offer noticeably better terms than CDs I might consider putting a share of my funds in one or two, but not the bulk of it.
As far as what CD durations to pick, that depends on when you will need the money as well as on whether you can be happy with your interest rate over that duration or not. Things change fast in the world today, so I would not want to bet on whether interest rates will be higher or lower in 2 or 3 years than they are now.
CDs do vary somewhat in how punitive the early-withdrawal penalty is, so that's a "fine-print" detail that'd be worth investigating before you buy. If interest rates go up enough it might make sense to cash a CD in early and pay the penalty.
Bigger picture: As an expat living in a low-cost-of-living foreign country, one of your biggest (financial) risks is that the people there will suddenly lose faith in the value of the U.S. dollar. The feckless behavior of our national leadership makes this a real concern worth giving some thought to, IMHO.
Going with your assumption that inflation doesn't matter to you, I personally would prefer FDIC-insured CDs to MYGAs, just because it's unclear to me what would happen to your money if the MYGA-offering insurance company went bust or failed to honor the contract for whatever reason. If MYGAs offer noticeably better terms than CDs I might consider putting a share of my funds in one or two, but not the bulk of it.
As far as what CD durations to pick, that depends on when you will need the money as well as on whether you can be happy with your interest rate over that duration or not. Things change fast in the world today, so I would not want to bet on whether interest rates will be higher or lower in 2 or 3 years than they are now.
CDs do vary somewhat in how punitive the early-withdrawal penalty is, so that's a "fine-print" detail that'd be worth investigating before you buy. If interest rates go up enough it might make sense to cash a CD in early and pay the penalty.
Bigger picture: As an expat living in a low-cost-of-living foreign country, one of your biggest (financial) risks is that the people there will suddenly lose faith in the value of the U.S. dollar. The feckless behavior of our national leadership makes this a real concern worth giving some thought to, IMHO.
disneysteve
Thinks s/he gets paid by the post
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- Feb 10, 2021
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- 2,401
And that’s why we ladder our fixed income holdings. We currently have CDs or Treasuries maturing every 3 months through the end of 2026.
Safe Harbour
Recycles dryer sheets
Please be aware that inflation is "loosing money". There is no difference. The impact to your savings is identical and it is permanent where as asset declines are temporary. You may have relatively lower inflation where you live but the result of inflation when it occurs will be to loose money. If you want to be safe you can not totally ignore this risk. This does not necessarily mean stocks. Property for example (not your primary home) can also help protect you from inflation. By having a mix of CD's and property you can in normal times live off the CD interest. But if you have high inflation you can recover from "lose of value in CDs" by selling off (some of) your inflated property.
airbornesapper
Dryer sheet aficionado
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- Jan 24, 2010
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- 41
We’re out of the market and have been since 17… not interested in the rise and fall - but have guaranteed pension income - Fully retiring at the same time I quit the markets…
Happy to watch our GICs grow currently at 5 to 5.15%…..without management fees of course…laddered most in 1 and 2 year terms… and a 1/4 in a 5 year.
Healthy Lifestyle
Recycles dryer sheets
I would like to purchase two $100,000 CD's, but should I wait for the Fed to announce interest rate decision, or do these look like a good buy now?
I see on Merrill Edge the following:
Wells Fargo CD,s paying: 5.1%, 1 year to maturity
Wells Fargo CD,s paying: 5.0% 1.5 years to Maturity
Thanks gang for input!
I see on Merrill Edge the following:
Wells Fargo CD,s paying: 5.1%, 1 year to maturity
Wells Fargo CD,s paying: 5.0% 1.5 years to Maturity
Thanks gang for input!
copyright1997reloaded
Thinks s/he gets paid by the post
OP
OP
DrgLrd
Recycles dryer sheets
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- Feb 21, 2022
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- 106
If I buy a brokered CD, who gets the FDIC coverage, me or the broker?
Also how does "Coupon frequency: At maturity" differ from lump sum at maturity (zero-coupon) ?
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COcheesehead
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
The CD is still issued by a bank with the coverage. The broker is just a conduit for the purchase.
As far as you other question. There are zero coupon that are sold at a discount and pay par at maturity. I have never heard of a CD like this. Bonds, yes.
There are also coupon ones that pay par plus accrued interest at maturity.
