Certificats of Deposit

[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.