Certificats of Deposit

[MoKelly]

Our bank will call you when the CD is maturing and let you renew, transfer to a money market or change rates/terms over the phone.

Pretty simple.

Great Southern Bank.

 

[EarPlug]

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Best High-Yield Savings Accounts for November 2023 | Bankrate

Some banks offer tiered interest rates. To find the best rate for you, browse Bankrate's list of the best high-yield savings accounts.

www.bankrate.com

 

[ruffdog]

I have done CDs for years and have never been "burned" by a bank or CU. I keep track of all my accts on a ledger and am never surprised by a maturity date. They will either send a letter or email to notify us of the impending maturity date and procedures.

 

[tallyho8]

I have had many CDs over the years. The best one I had was years ago when Carter was president. I put $20,000 in a 5 year CD at 18% interest. I had over $40,000 when it matured.

Banks use "Special" cds to try to trap people into lower rates. These special cds are usually 5 or 11 or 13 months and renew at 6 or 12 months. The special rate may be 5% or more but when they renew at 6 or 12 months it will be a much lower rate because many people will forget to close them out and put them in another cd that pays much higher rates.

I just had an 11 month cd at 4% mature and the bank offered a 12 month one for 4.9% but I closed it out and put it in a different bank for 11 months at 5.4%. The banks always notify me 20 days before it matures in case I have forgotten about it.

For quite a few years I hid my money instead of putting it in a bank because they only offered about .01% interest but as soon as interest rates started going up, I quickly went back to cds.

 

[duffer]

As an alternative to look at, try US Treasury notes, bills, and bonds. Notes and Bills are short term duration US Treasuries. Most are paying 5%+ depending on the maturity. You can buy them for a 2 week maturity, all the way up to 30 years and everything in between.

But the bonus here is this: US Treasury interest is exempt from state income taxes. Doesn't matter if it's a 0% coupon bond (you buy at a discount) or a 5% coupon bond. The interest is state exempt. The OP looks like he lives in IL. (a high tax state)

CD interest is fully taxable at Fed, State, and local levels. So is Money Market interest. I switched from CD's and MMkt's to UST's a couple of months ago, and already have saved a bundle in state income taxes. I have a Fidelity acct and you can buy them online without any fees or commissions. Easy-peasy.

 

[RSKY]

Not worried about minimums, we have about 100k too much in checking. I know, it's a good problem to have but it's still a problem. Wife finally started making money and we aren't spending it.

By having your cash in a non interest bearing checking account you are losing more than $5600 a year as compared to the one year Fidelity CD. Nothing to sneeze about.

After twenty years of controlling my own finances I deal strictly with Fidelity. Go to their website and check them out. CD's rates this morning are 5.4% for three and six months, 5.55% for nine months, and 5.65% for twelve months. The twelve months CDs have been 5.7% and will probably go back to that this week. When the CD expires your money automatically deposits into what I call a holding fund (SPAXX) which is a money market fund currently paying 4.99%. It takes about a day for you to transfer money to a checking account depending on the time of day you make your request. The longest it has ever taken me to get money back in my bank account is two days not counting weekends.

Or, you can put your money in FZDXX which is a Fidelity Prime Money Market Mutual Fund and leave it. That is currently paying 5.21%. There is a $100,000 minimum to get into this fund but once in I have gone down to about $20,000 buying something else with no complaints from Fidelity.

And Please keep good records for your wife and children. I spent three-four months about ten years ago searching for CDs in every bank in two states after a phone call from a friend alerting me that there was a CD in my mother's and my names drawing less than 0.1%. She had them scattered everywhere in her name and all her descendants names in multiple banks. She was over ninety years old and had just lost track. CDs were in all three of her kids names, plus five grands, six great grands, and several (but not all) of her ten great grands. I had to straighten the mess out and redo everything in a fair way. It was a nightmare.

Anyway, good luck and give Fidelity a look.

RSKY

 

[RSKY]

I forgot something in my post above.

I am currently laddering my CDs so that I have a large one coming due every three months. I have three with maturity in March, June, and September. One came out in October and I am holding the cash in the above mentioned prime money market account until December. That way I will have one coming out every three months if we need the cash. My suggestion to you is to buy three, six, nine, and twelve month CDs. When the three month one matures buy another twelve month. Same way with the six and nine month CDs. When they mature buy a twelve month. In a year you will have four CDs each maturing at three month intervals. Nice safe guaranteed insured way to have money available while earning some interest.

RSKY (aka Mr. Know-it-All)

 

[CloverKnollFarms]

We just bought a 70k 12 mo at 5.67%

As long as rates remain in that area, we are buying another 12 mo, each month, at $7k per month.

The 401 and ROTH IRAs are still getting funded, but I want a better cash position in the next several years.

Sounds like the Fed signaled possible rate increases coming again, so bad for consumers, good for cash holders.

 

[RSKY]

We just bought a 70k 12 mo at 5.67%

As long as rates remain in that area, we are buying another 12 mo, each month, at $7k per month.

The 401 and ROTH IRAs are still getting funded, but I want a better cash position in the next several years.

Sounds like the Fed signaled possible rate increases coming again, so bad for consumers, good for cash holders.

Smart !!

 

[hosspuller]

Ponytug & RSKY have posted good advice IMHO... The brokerage houses have access to high rate CD's Their websites are good and easy to use. With the internet, there no reason to limit yourself to the local banks.

I use Fidelity. I always decline the CD auto roll-over. At maturity the funds automatically flow to the cash account.

A few tidbits. CD's are generally protected by the FDIC. Some money market funds are not. Look for "call protection" on your CD. If interest rates fall, the bank can cash out your CD.

 

[JethroB]

Someone touched on this earlier, cashing in a low earning CD early and taking a 90 day interest penalty isn’t always a bad option. Locked in isn’t really so.

Personally if I didn’t ladder them I would break a large amount into several smaller CD’s. That way if I needed access to some quick cash early I could take out small chunks and minimize the 90 day $ penalty.

 

[ultrarunner]

We just bought a 70k 12 mo at 5.67%

As long as rates remain in that area, we are buying another 12 mo, each month, at $7k per month.

The 401 and ROTH IRAs are still getting funded, but I want a better cash position in the next several years.

Sounds like the Fed signaled possible rate increases coming again, so bad for consumers, good for cash holders.

Highest I’m seeing is 5.5

Who is offering better?

 

[newbury]

<snip>

And Please keep good records for your wife and children. I spent three-four months about ten years ago searching for CDs in every bank in two states after a phone call from a friend alerting me that there was a CD in my mother's and my names drawing less than 0.1%. She had them scattered everywhere in her name and all her descendants names in multiple banks. She was over ninety years old and had just lost track. CDs were in all three of her kids names, plus five grands, six great grands, and several (but not all) of her ten great grands. I had to straighten the mess out and redo everything in a fair way. It was a nightmare.

Anyway, good luck and give Fidelity a look.

RSKY

DEFINITELY keep track.
We had an Uncle who was a REAL rocket scientist at Huntsville, AL. for his 40 year career. And also had a house in Fulton, MS. about a 3 hour drive. He had a habit of stopping at little banks on the way and setting up accounts. He passed away. My wife was an executor on the estate. It took almost a year to track down what we hoped was all his accounts, in his name, his wife's name, both names. Unfortunately his wife had dementia and couldn't help.

And on the treasury bill issue I've posted about that before. Right now my 4 week notes are getting 5.4%, when they mature I can have them roll over into the next auction for up to two years.
I started out buying treasury bills and notes at the counter back about 1976. My work required I drive almost right past the building in DC, so I'd stop off, pop in and buy a bill.
DC has gotten crazy in the last 40 years so Treasury Direct is a lot easier
And there are no fees, hidden or otherwise.
Treasury direct can be handled without a brokerage account, but it's like changing your own oil without a lift, versus having a dealer do it for the cost of the oil.
On the other hand with my brokerage accounts they kept changing names and owners over the years.
It's unlikely Treasury Direct will be bought out.
/edit -
linky is a link to recent results

 

[LittleBill21]

Highest I’m seeing is 5.5

Who is offering better?

total direct bank is 5.76 for 6 months, I opened 3 of them

 

[scott_vt]

We use Preferred Deposits with Merrill Lynch for our money market and savings needs. It takes $100K to open the account but you can draw down below that after opening. Minimum deposit after opening is $1K. Current interest rate is 5.02%, tied to the Fed rate. No limit on transactions, no time limits, and no penalties on withdrawals. I can transfer the money between my BOA and Merrill cash accounts online, then my Merrill Financial Advisor has to make the deposits or withdrawals into Preferred Deposits. Deposits are made or money is available from a withdrawal to transfer back to my BOA checking account within 24 hours after I notify him.

Good Afternoon WM75Guy,
I do basically the same thing ! I’m getting about 5.2% on basically just a savings account linked to my primary bank. In my case that’s Wells Fargo, I can easily transfer from one account to the other and the money is not locked up ! When it looks like the rates may be going down, then a CD may be a better bet !

 

[fruitcakesa]

As an alternative to look at, try US Treasury notes, bills, and bonds. Notes and Bills are short term duration US Treasuries. Most are paying 5%+ depending on the maturity. You can buy them for a 2 week maturity, all the way up to 30 years and everything in between.

But the bonus here is this: US Treasury interest is exempt from state income taxes. Doesn't matter if it's a 0% coupon bond (you buy at a discount) or a 5% coupon bond. The interest is state exempt. The OP looks like he lives in IL. (a high tax state)

CD interest is fully taxable at Fed, State, and local levels. So is Money Market interest. I switched from CD's and MMkt's to UST's a couple of months ago, and already have saved a bundle in state income taxes. I have a Fidelity acct and you can buy them online without any fees or commissions. Easy-peasy.

I have been “laddering” treasury bills for years. Usually just 4 week bills. With laddering you schedule them to mature a week apart so you always have a consistent income. You can have them automatically renew if you don’t want to pay to much attention to them. I also occasionally buy 8 and 13 week bills just to mix it up. The current rates are north of 5.4% for all the short term bills.

 

[CloverKnollFarms]

Highest I’m seeing is 5.5

Who is offering better?

A few were, but they fluctuate with the market condition. We purchased through Lending Club

 

[RSKY]

Highest I’m seeing is 5.5

Who is offering better?

Fidelity!

Go to fidelity.com and look at the rates. You don't have to register and log in to just look. About halfway across a little down from the top you will see "News & Research". Hold pointer over that then scroll down to "Fixed Income, Bonds, and CDs". Click on that and the rates will come up. You will have to register and log in to see the actual CDs. On the one year CDs this morning there are offerings from fifteen different banks and financial institutions with J.P.Morgan offering the highest rates. As of 7:15 this morning they have 38.5 million dollars worth offered in $1,000 increments. The rate is 5.65%. To buy you must register and have a bank to transfer money from and to. It seems complicated but it actually is not.

RSKY

 

[ultrarunner]

Fidelity is employer 403b so maybe easier?

Thank You

 

[Tinhack]

I'm a diehard procrastinator and freely admit it. That's why CDs bother me, especially when they roll over into a .05% CD if I don't pay attention to them. Had a savings account and it kept going dormant for lack of attention

Ha, ha, ha. My bank just started sending me dormant notices on a savings account. I pulled out money just before they paid some measly interest. I guess I should transfer it to a checking account before the state gets it. I'm 73. I have some set aside for an emergency, but I just decided to spend money where and when I want. When my number is up, no one will have to fight over the money.