Certificats of Deposit

[NoTrespassing]

My wife and I have a significant portion of our savings in 2 checking accounts earning almost no interest. We went to our bank yesterday to discuss CDs. We were told they have 2 "special " rate CDs right now, a 7 month and 11 month for a little over 5% APR. The problem I see with those CDs is that when they mature, if you are not proactive and open another "special " rate CD, they revert back to their "regular" rate of .05% and the you are trapped in it for a period of time, I think one year. I asked if they could automatically be transferred back into our checking accounts and was told it's impossible. Is this typical banking policy?

 

[LittleBill21]

no, cd's can be cancelled when matured and the funds deposited, i have done this over the years, you can also just get a HYSA, I currently have one over 5%, but a typical good online account is over 4%, if you don't want to do the cd thing. you can tell them i think up to 10 days before maturity you want to not roll over. and generally you only lose a month or 3 months of interest if pulled early, you can always pull them.

 

[NoTrespassing]

I'm surprised their "regular " rate is .05% when their "special " rate is actually over 5%. Seems underhanded to me.

 

[NoTrespassing]

I'm leaning towards an online money market at over 5%.

 

[LittleBill21]

I'm surprised their "regular " rate is .05% when their "special " rate is actually over 5%. Seems underhanded to me.

its typical, I have seen it before.

 

[LittleBill21]

I'm leaning towards an online money market at over 5%.

make sure you use a hub bank like ally, I do the online stuff, and some of the banks have some strict rules, and very limited capability, i just use them as storage vaults. CFG/VIO/Bask are all decent with little restriction, just watch the ach transfer limits if you don't use a hub bank like Ally.

 

[2manyrocks]

Some banks auto renew into a crappy rate because they want to hold onto your money and pay you the least for it.

Have you considering buying treasury direct because I think you might be able to get a better rate and not have to deal with the bank auto renewal thing.

 

[NoTrespassing]

make sure you use a hub bank like ally, I do the online stuff, and some of the banks have some strict rules, and very limited capability, i just use them as storage vaults. CFG/VIO/Bask are all decent with little restriction, just watch the ach transfer limits if you don't use a hub bank like Ally.

We just need a place to save. We have a pretty good monthly surplus after 401k deposits and it keeps piling up in non interest checking accounts. Someday we might spend it on a major building project but we'd have plenty of time to get it out. We should probably sit down with a financial advisor but I hate paying for things I think I can figure out myself.

 

[LittleBill21]

We just need a place to save. We have a pretty good monthly surplus after 401k deposits and it keeps piling up in non interest checking accounts. Someday we might spend it on a major building project but we'd have plenty of time to get it out. We should probably sit down with a financial advisor but I hate paying for things I think I can figure out myself.

well read the limitations closely if you never did online, the best current saving's is popular direct, at 5.4%, but they only allow one ach account linked, no features, and you can only do transfers on their side of the world, and 100+ fee to close if closed in under 6 months, but like you its just a storage vault, and I use Ally for all my bill pay and transfers

 

[Hay Dude]

I'm leaning towards an online money market at over 5%.

usually those require a decent sum to be maintained. I have one, but you need to maintain north of 20-25K.