Are interest rates going up??
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Also the money will be invested with a certain amount for each child, grandchild, and great grandchild. The bank offering the bump up rate will allow money to be withdrawn with only a penalty on the amount taken. The other requires the entire CD to be cashed, penalized, then reissued.
I have learned a lot in the past month while researching this.
One thing everybody should know. If you let a CD 'roll-over' at a bank it automatically goes to the lowest interest rate they pay. That is what has happened. Person was drawing 0.1% on their money. That is 0.001.
If you have CDs or an elderly relative has CDs and they are letting them ride they are loosing a ton on money.
RSKY
I have learned a lot in the past month while researching this.
One thing everybody should know. If you let a CD 'roll-over' at a bank it automatically goes to the lowest interest rate they pay. That is what has happened. Person was drawing 0.1% on their money. That is 0.001.
If you have CDs or an elderly relative has CDs and they are letting them ride they are loosing a ton on money.
RSKY
dmccarty
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We plan on doing this one day but I did not know it was called a CD ladder. Learned something new today so I guess I can go home and sleep. NOT! :laughing::laughing::laughing:
Later,
Dan
Oldoak
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Huh? I don't know where you bank or get your false information from, but if/when I allow a CD to roll over, I always get the prevailing rate at that time being offered by the financial institutions I do business with. Whether it is a new CD or a CD that is being rolled over, it is the same rate.
It is not false information. I have been to eight different banks in the past month. All manage their CDs the same. Some of these CDs were originally drawing six percent or higher. One was from the early eighties and had been thru the original bank which was bought by another bank which merged twice with others. One bank were four were bought had failed and the CDs went thru two mergers. Big mess. The CDs had been allowed to roll over for ten to thirty years. In that time each of the three banks involved lowered their maximum rate to 0.1%, 0.2%, or 0.3% for the term involved. The person involved thought they were still drawing 6.0%. During a rollover the bank must select a time as close to the original as possible. That is why you have CDs offered at odd times. Instead of all being five year, or sixty months, they will offer a fifty-nine month at some ridiculously low percentage and the ones that roll over go to that rate. That is why one bank offered at 57, 59, and 60 months. It is a racket and if you don't watch ever step you will loose. The person I am helping is elderly and has been loosing well over $200 a week. I am just glad somebody noticed what was going on and contacted me.
The bank we are going with has let me set the time so I picked 59 months just because they didn't have CDs offered at that term.
Then today I find out another person checked his at another financial institute and he was also drawing one tenth of one percent. So I have been volunteered to help him.
It is a long story that I cannot relate to you here. Just check what you are earning on your CDs and always go to the bank when they renew.
As to the original question, are interest rates going up, down, or staying the same.
And I got a call today offering 2.6% if I move ALL to one bank.
RSKY
ericm979
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Interest rates are lower than the historical average. We're still moving out of the artificially low rates during the last depression. Chances are they will go up over the term of the CDs you buy now. The adjustable CDs sound like a win. But the banks can see the same data we can (or better) and adjust the returns to match their projections.
Historical CD Interest Rates 1984-2 16 - Bankrate
Sorry to hear that your people have been played by the banks. They take advantage, especially of the elderly. Good on you to look out for them.
Historical CD Interest Rates 1984-2 16 - Bankrate
Sorry to hear that your people have been played by the banks. They take advantage, especially of the elderly. Good on you to look out for them.
I don't think it was as much being played as it was getting older and not paying attention. There were three banks involved in one of the individuals, but as far as I know now only one on the second. Notices had been sent every time the CDs were ready to be renewed. I spent an entire day going thru twenty years of notices stuck in drawers. Let me give you an example. Four CDs were bought at an Integra Bank sometime in the early 2000s. That bank failed in 2008-9 (I think). The CDs then went to a Bank in Evansville, Indiana that I've never heard of, then they were bought (??) by a bank in our home town. Others CDs were bought at a 'Liberty Bank' which was itself bought by 'Peoples First' which was bought by 'Union Planters' which was bought by 'Regions'. I am trying to trace all these down.
At another bank I gave the not very friendly lady by name, SS number, and POA papers and she looked it all up on her computer and started laughing. Said they had been trying to contact the owner but were getting no replies to their letters. She said she was relieved to see me. She admitted on the second visit that at first she thought I was going to try to take money from the accounts for my own use.
Surprisingly the bank people have directed me as to which of their competitors were paying higher rates and giving better terms.
I have received a very good education on CDs and financial dealings in the past month.
We are going to move a LOT of money from three banks to another. The bank paying the highest interest in not the winner. The one with a slightly lower rate but better rules on withdrawal won the contest. The way they are going to let me structure the CDs will also make it easier to remove money if the owner needs it for their care. At their age it is highly likely that they will. Also there will be a total of eighteen names on the CDs. Did I say this was complicated? Most banks said it would have to be eighteen different CDs but the one bank will let me structure all this into three different groups consisting of all children, all grands, and all great grands. They will all be POD also. Which means Pay On Death to the second name on the CD. This is so nobody will know about it until the owner passes. Sadly this is considered a necessity by some involved.
The penalties and fees for early withdrawal of all the financial instruments (big words, ha) will be made up in two weeks and two days at the new rates.
Understand why I have had constant indigestion for the past month?
All of the banks have penalties for early withdrawal. Most are a cash amount, $25-$35, and the interest for a certain time. At all the banks except one you must cash in an entire CD, get the money you need, pay the penalty ($25 + a year's interest on the entire CD), and roll the remainder into another smaller instrument. The bank we have chosen will allow us to take out the money needed from the CD and only pay the $25+a year's interest ON THE AMOUNT WITHDRAWN.
This is not my money. I am doing this because the person trusts me and knows I will not cheat them.
EVERY SINGLE PERSON I have dealt with at eight to ten banks, I forget exactly, has been polite and helpful. Some were skeptical of me at first. I have heard enough horror stories from them to understand why. Also heard about the brother and sister who came in one bank earlier this year asking about their recently deceased parent's checking and savings accounts. Said they knew their parents didn't have much because they had been putting money into their checking each month for years so they could buy groceries. They were surprised when told that they now had over a hundred thousand in CDs they didn't know existed. Their parents had been buying CDs with the extra money they got each month.
RSKY
bigtiller
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For large sums of money, AKA 6 figures, talk the the bank manager. He will offer a percentage that is quite a bit higher than what is offered to the public. Talk to several banks, sometimes a bank needs new money to help them finance a large city/county project and they will want to buy your money for sure.
If you are talking less than 40K, there isn't much bargaining room for you.
If you are talking less than 40K, there isn't much bargaining room for you.
MinnesotaEric
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Thoughts?
Cash in US dollars is a position.
A TIPS ETF has been able to keep up with the super mild inflation we've expereinced. This inflation-fighting investment is performing up to speed - MarketWatch
Why CDs? Why not a preferred equity