CD - Certificate of Deposit Interest Rates --Ugggg !

[brin]

Anybody else disgusted ? Just who is getting our money ? Just had a CD mature...the new offer is 0.85% interest for 14 months...or 1.00% for 19 months....give me a break...

The Mrs. and I are at the point of even wondering how good the FDIC backing is really worth...am I Nuts or anyone else bothered just a bit..?

As more money is printed the value of our savings are going down as the currency is diluted....Nice Huh ?

 

[Fixemall]

Might be better off putting your money into hard assets, I backed two businesses this year and held a mortgage for a Bankrupt/disabled vet. Two of my three are bringing in good money and the third will just break even. I would go talk to your accountant and see what he or she is doing with their cash. Only CD's I have are shiny pieces of plastic that hold music....

 

[MoKelly]

Yes ... interest rates on anything safe (investment grade ratings or CD's insured by the FDIC) are at rock bottom right now vs. history. It is a matter of supply and demand ... too many folks want bonds and CD's vs. other investment alternatives. So, banks don't have to offer much to get the money.

On the other hand, you can get a fixed mortgage at 3.25% right now.

That is less than my parents borrowed to buy their first house in 1958.:confused2:

MoKelly

 

[keegs]

Bogleheads Investing Advice and Info

 

[bp fick]

Zero percent on a tractor purchase? Sure. 3.5% on a mortgage? Possible. Getting more for your savings, in this environment? Not too likely.

Yes, it discouraging because it isn't keeping up with the reported inflation. Stock market is a gamble. Where to invest, oh, where to invest....

Retirement funds just cannot be risked in high wire acts, imho.

 

[brin]

Zero percent on a tractor purchase? Sure. 3.5% on a mortgage? Possible. Getting more for your savings, in this environment? Not too likely.

Yes, it discouraging because it isn't keeping up with the reported inflation. Stock market is a gamble. Where to invest, oh, where to invest....

Retirement funds just cannot be risked in high wire acts, imho.

BP - I totally agree with regarding retirement funds ...risk is just not worth it...it is sickening though..whoever thought interest on savings would be less than 5% ...and that is low if you look back over the last 40 yrs. or so...just shows how serious a situation the country is in...

 

[ultrarunner]

A couple of thoughts...

Local Bank is literally paying nothing and started implementing lots of new fees where nothing existed before... like on checking... had lifetime free checking from 1980 that they will no longer honor... long story.

Anyway, opened a Chevron Credit Union Account that is paying 8/10 of a percent for money in my checking... 9 times more than the bank for checking and 1/10 higher for the 9 month CD...

Several friends invested substantial amounts in deeds of trusts... local Bay Area Company with a 30 year track record that last night on the news in in BK with 700 million dollars in exposure...

Enough to make a person want to stuff their mattress and be done with it...

 

[KTurner]

As more money is printed the value of our savings are going down as the currency is diluted....Nice Huh ?

Inflation - It's how the government taxes the money you put in a coffee can and buried in the back yard.

Keith

 

[brin]

Inflation - It's how the government taxes the money you put in a coffee can and buried in the back yard.

Keith

Yes I know...no different that just taking our money...every time they fire up the printing presses and dilute the dollar...I am risk averse at this point though..makes it more challenging to get a return ...

 

[houstonscott]

Anybody else disgusted ? Just who is getting our money ? Just had a CD mature...the new offer is 0.85% interest for 14 months...or 1.00% for 19 months....give me a break...

The Mrs. and I are at the point of even wondering how good the FDIC backing is really worth...am I Nuts or anyone else bothered just a bit..?

As more money is printed the value of our savings are going down as the currency is diluted....Nice Huh ?

Yes, interest rates are too low, but if the Federal Government let them go up they couldn't afford it and would default immediately, and that is why they are at zero. Normal interest rates bankrupts the USA right now. There really is no good scenario for the situation the US is in, hold on to gold, silver.

HS

 

[Financegal]

Yep, it's rough. I'm retired -any money needed within the next 8 years or less safe in CDs, Money Markets, etc. Anything 10 years or out is in very good diversified portfolio in the stock market for more growth. It took a LONG time for me to "get" that I shouldn't watch the market - what it does on any given day doesn't matter - it's all a paper drill until the day YOU need to withdraw it. Every once in awhile when it goes low, I buy shares when they are on "sale".

As for banking - credit unions appear to be the only place that doesn't try to gouge you with all their fees. I love mine but when I moved, I also joined a national bank (Wachovia, now Wells Fargo) to be able to cash checks or emergency. They are the first to announce that they will charge to use their debit cards. I called, asked when and said once they begin to institute those, bye bye and I got the story that all banks will begin to roll out the same fees soon. As I told her, the credit unions are member owned and under different guidelines and the girl admitted that banks are aware they cannot compete with the large credit unions. CUs, the only way to go!

 

[ultrarunner]

Got a call from the branch manager the other day saying I had made a large withdrawal...

He asked if I had any issues with the bank.

I told him I came in 10 days ago with my statement showing a charge for checking and another $2 monthly fee for check images and asked why? I was directed to the assistant manager who said there is nothing I could do to avoid the fees even though this was supposed to be free lifetime checking when I opened the account in 1980...

So I started an account at the Credit Union that is paying 9 times the interest and no fees... I told him I had to get more interest to pay the new fees his bank implemented.

I will probably keep the bank account open, it is 100' from where I work...

The manager said he wished I would have spoken to him because he would have waived the fees for the next 12 months.

By the way... 9 times better interest than the bank is still only about 8/10ths of one percent.

 

[JDL538]

When the stock market tanks and the S&P gets to around 800 start buying Utilities.
You can easily get 6% yields with upside potential, You can get a 6% yield now on ATT-T, five plus % on VZ,DUK, MANY OTHERS.
The Banker's are CROOKS everything today is crooked.

 

[brin]

When the stock market tanks and the S&P gets to around 800 start buying Utilities.
You can easily get 6% yields with upside potential, You can get a 6% yield now on ATT-T, five plus % on VZ,DUK, MANY OTHERS.
The Banker's are CROOKS everything today is crooked.

I agree, corruption from top to bottom - from the Federal level to local levels....really a sad situation..

 

[nontypical]

No interest is ok when there is no risk, but there is in fact ENORMOUS risk these days and very little risk premium.

 

[brin]

No interest is ok when there is no risk, but there is in fact ENORMOUS risk these days and very little risk premium.

You said a mouthful there - the more dollars Benanke prints the less ours are worth and all for -0- interest...What to do ? Geeez !

 

[tallyho8]

I have a couple of Jumbo 5 year CDs that mature in November. They are currently paying 5% and I am sure they would renew at 1% if I let them but I won't tie up my money for 5 years for only 1%.

When I retired a couple of years ago these CDs were a good part of my retirement planning. Now with no raises in Social Security in years and waning CD rates I have to make other plans.

I have done very well over the years with some rental properties that I own but I did not want to acquire more properties to work on at my age now but this will probably be my best option.

My banker told me "Why should we pay more than 1% interest to our customers when we can borrow money from the gov't for almost 0%?"

 

[brin]

I have a couple of Jumbo 5 year CDs that mature in November. They are currently paying 5% and I am sure they would renew at 1% if I let them but I won't tie up my money for 5 years for only 1%.

When I retired a couple of years ago these CDs were a good part of my retirement planning. Now with no raises in Social Security in years and waning CD rates I have to make other plans.

I have done very well over the years with some rental properties that I own but I did not want to acquire more properties to work on at my age now but this will probably be my best option.

My banker told me "Why should we pay more than 1% interest to our customers when we can borrow money from the gov't for almost 0%?"

I've got rental properties as well...we are in the same boat and I have been thinking about buying more at these prices...my Mrs. is against it at our age, like you, so I am hesitant , I really dread the tenant experience anymore..know what I mean..?

 

[Fixemall]

I've got rental properties as well...we are in the same boat and I have been thinking about buying more at these prices...my Mrs. is against it at our age, like you, so I am hesitant , I really dread the tenant experience anymore..know what I mean..?

I say go for it, I only buy duplexes with large yards and only rent to people who were foreclosed on or did short sales and do not want to live in apartments, 90% of being a landlord is finding the right tenants with jobs in sectors unlikely to be exposed to layoffs. My plan when I get older is to sell to my tenants and hold the notes...all the benefits with no repairs.

 

[brin]

Fixemall, " I only buy duplexes with large yards and only rent to people who were foreclosed on or did short sales and do not want to live in apartments "

That is a good plan you have...I bet it works for you..there are a lot of folks who lose their homes and can't bear to go into an apartment and with a duplex you get a 2 fer...nice.

On selling to your tenants...don't count on that as a sure thing...I had a tenant in one of my houses that had been there for 16 yrs. and he bought a foreclosed house for way less than I could sell him the house he had been renting...nice thought but so many things can go wrong...