Author Topic: Anyone else watching CD rates tick up pretty quickly? Any CDs with over 3%?  (Read 3268 times)

Nick_Miller

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My local bank posts its CD rates on a board over the tellers' stations, so it's hard to miss. I note them every once in a while, but they've been going up quickly this year...


On Feb 14, 2018:

Term   Interest Rate   APY*
12 Month   1.00%   1.00%
18 Month   1.49%   1.50%
36 Month   2.08%   2.10%
60 Month   2.57%   2.60%

On Feb 20, 2018:

12 Month   1.00%   1.00%
18 Month   1.73%   1.75%
36 Month   2.23%   2.25%
60 Month   2.71%   2.75%

(added on 5/9/18)

Term   Interest Rate   APY*
12 Month   1.00%   1.00%
18 Month   1.73%   1.75%
36 Month   2.47%   2.50%
60 Month   2.96%   3.00%



I would be tempted to put some of our cash reserve into a CD this year, but I'm waiting to see if they continue to rise. My wife likes having a cash cushion, but I think she would be fine with moving about $10,000 of our cushion to a CD. I know even if rates hit 3%, that's only $300 in interest per year, but it's free money.

Again, this doesn't affect our investments. My wife is more comfortable with having some cash around, so I figure it's near time to move it out of savings.

Has anyone read any recent articles talking about interest rates with any projections for 2018?

Has anyone found a CD offering 3% yet? I'm assuming if you have, it's a 5-year CD, and I'm not sure I'd want to lock up money for that long right now, but I'm still curious. I check bankrate, but I noticed that my local bank's 5-year CD rate is .10% higher than the highest listed on bankrate, so I'm sure there are some more hidden deals out there.

(ADDED 5/9/18) So my local bank is pretty much at 3% now. Still as good or better than anything on bank rate. Has anyone found anything even better? I didn't know if any folks nearing FIRE were looking at these rates as they lock in CD ladders to live off while they do the 5-year IRA/Roth IRA conversion plan.
« Last Edit: May 09, 2018, 10:35:08 AM by Nick_Miller »

Another Reader

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www.depositaccounts.com

Now owned by Lending Tree but still the most accurate, up to date source for rates at banks and credit unions.

You can also buy CD's through the major brokers.  Some rates are competitive, others are not.  They sell new issue and secondary market CD's.  A fee is usually charged for the secondary market CD's.  I find Fidelity's list to be much easier to peruse than Schwab's or Vanguard's.

toganet

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Not CD's per se, but doctorofcredit.com has a list of high-interest savings accounts that sometimes exceed CD rates: https://www.doctorofcredit.com/high-interest-savings-to-get/

Another Reader

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Since interest rates are moving up, I like to ladder CD's over about 18 months in accounts where I anticipate withdrawals.  Money market rates have been going up as well, and I look for CD's that exceed the yield on the money market accounts.  Every time a CD expires I shop for something of a similar term with the highest rate.  I did put some cash for 2020 withdrawals in several two year Wells Fargo CD's purchased through Fidelity.  Interest rate was 2.4 percent.

One of my gripes with Fidelity is the high expense ratios they charge on their money market accounts.  They make no effort to compete with Vanguard on those products.  That's one reason I'm loading up on CD's, which have no ER and probably cost a couple of basis points on the yield instead.

PDXTabs

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I don't have any CDs, but my CIT bank savings account is currently yielding 1.55% and my I-Bond is currently yielding 2.68%.

Kashmani

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Alas, nothing at 3 percent or over.

I would love to have some money in CD's. I need to buy a new car in nine years and have to pay a cemetery gardener for another 15 years. Too short for index funds but too long for savings accounts. But 2.75% with a 50% marginal tax rate is still below the rate of inflation, so there will be less money down the road, not more. All very frustrating. I find there are currently no above-inflation savings vehicles for mid-range time frames.

Wake me if we ever get back to 4 percent...

DreamFIRE

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Has anyone found a CD offering 3% yet?

These are not technically CDs, they are insured by NCUA instead of FDIC, but they are 5 year 3% yield.

https://www.connexuscu.org/accounts/share-certificates/

https://www.macu.com/rates#TermDeposit-Tab

I don't have any additional info about either of these or the NCUA for that matter.


Mezzie

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I have one cfedit union CD account at 3% and one at 3.5%. Each is a 12 month, and each, unfortunately, has a maximum deposit amount.

MrsDinero

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Following.

I started a CD with Ally in December when they had a 12 month CD for 2%.  It doesn't seem to be available any longer.

DreamFIRE

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Following.

I started a CD with Ally in December when they had a 12 month CD for 2%.  It doesn't seem to be available any longer.
They still do, for a $25,000 minimum.

I'm thinking about a Sallie Mae 2 year CD with 2.3% yield.

MrsDinero

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Re: Anyone else watching CD rates tick up pretty quickly? Any CDs with over 3%?
« Reply #10 on: February 21, 2018, 06:44:42 PM »
Following.

I started a CD with Ally in December when they had a 12 month CD for 2%.  It doesn't seem to be available any longer.
They still do, for a $25,000 minimum.

I'm thinking about a Sallie Mae 2 year CD with 2.3% yield.

Sorry, should have specified on all balance tiers.  The one I opened does not mee the $25k min.

Nick_Miller

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Re: Anyone else watching CD rates tick up pretty quickly? Any CDs with over 3%?
« Reply #11 on: February 22, 2018, 06:41:45 AM »
Hmmm...lots of good info here, but it looks like my little local bank has some of the highest rates around, at least for longer-term CDs. I do see tons of 2% 1-year CDs on bankrate and may pull the trigger on one, but I'm tempted to watch rates for a bit longer.

It's not like 3% is some magical number, but it sure would be refreshing to see after over a decade of crap rates. Man, when I was in high school back in the late 80s/early 90s, CD rates were INSANE. Guaranteed 8% return??

https://www.bankrate.com/banking/cds/historical-cd-interest-rates-1984-2016/

« Last Edit: February 22, 2018, 06:45:10 AM by Nick_Miller »

harvestbook

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Re: Anyone else watching CD rates tick up pretty quickly? Any CDs with over 3%?
« Reply #12 on: February 22, 2018, 07:34:51 AM »
But what was inflation in the 80s? We were coming off double-digit inflation. It's not like banks are just giving money away.

Rising CD rates often mean inflation is rising, so I consider them a wash like a total bond fund where the goal is to keep up with the shrinking value of cash. Good luck in your search.

katsiki

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Re: Anyone else watching CD rates tick up pretty quickly? Any CDs with over 3%?
« Reply #13 on: February 22, 2018, 07:37:09 AM »
I just noticed that NASA FCU has 2.25% for 11 months.  It requires $20K min.  That is the best deal I have found for a shorter term.

TexasRunner

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Re: Anyone else watching CD rates tick up pretty quickly? Any CDs with over 3%?
« Reply #14 on: February 22, 2018, 07:45:07 AM »
Post to follow.

I need to work out some better options for a 12 month rolling CD ladder.

jim555

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Re: Anyone else watching CD rates tick up pretty quickly? Any CDs with over 3%?
« Reply #15 on: February 22, 2018, 08:19:09 AM »
I was noticing 1 year Treasuries at 2.02% yesterday.  Safest investment, and no state taxes.

talltexan

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Re: Anyone else watching CD rates tick up pretty quickly? Any CDs with over 3%?
« Reply #16 on: February 22, 2018, 08:41:19 AM »
With the rates you'veposted, I'd put 33% into a 5-year, and 67% into a second five year, then--if I needed some money, break the smaller one early. Even after penalties, I'd probably still be ahead of the 1-year rate.

katsiki

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Re: Anyone else watching CD rates tick up pretty quickly? Any CDs with over 3%?
« Reply #17 on: February 22, 2018, 09:22:39 AM »
I was noticing 1 year Treasuries at 2.02% yesterday.  Safest investment, and no state taxes.

Good point!  Is this an "ibond" or something else?  I'm pretty clueless on US treasuries.

jim555

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Re: Anyone else watching CD rates tick up pretty quickly? Any CDs with over 3%?
« Reply #18 on: February 22, 2018, 09:24:10 AM »
I was noticing 1 year Treasuries at 2.02% yesterday.  Safest investment, and no state taxes.

Good point!  Is this an "ibond" or something else?  I'm pretty clueless on US treasuries.
Actually secondary market 5 year notes that had a year left on them.

Nick_Miller

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Bumping, as I included some updated info in the OP.

As quickly as these rates are going up, I'm unsure of when it's smart to lock something in...it just seems like rates continue to rise, and that it might be unwise to lock in a current rate, especially for 3-5 years.

economist

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The Fed has been pretty consistent about forecasting 3 rate hikes this year, and 2 next year, each of 0.25%. They did one in March, so that means if they keep to their schedule we should see rates increase by about 1% over the next 2 years. This could change a bit, but I'd be surprised if they raised rates less than 0.5% or more than 1.5% over the next 2 years.

Now, I'm not sure if that will translate directly into a 1% increase in CD rates, but rates will probably go up close to that amount. A CD ladder might not be a bad option.

VaCPA

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I got a letter in the mail the other day from my bank, Wells Fargo, offering a 2% 13 month CD. $25k minimum. I'm seriously thinking about doing it, as my online savings account is something like 1.6%. I would still keep a chunk in my savings for emergency fund.

WhatFreshHell

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My friend told me about this bank. I guess it is a small bank in PA... they have 3% on 5 year CDs.

https://www.ambk.com/personal/savings-cds-money-markets/cds/

PathtoFIRE

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I signed up for Beam back in the fall, and they've launched a beta app service (not clear whether it's just to test the function of the app, or whether you can actually start making deposits). They are promising 2-4%, and the money sits in a FDIC-backed account. Who knows, maybe it'll have the same annoying requirements that all the other high interest accounts out there have, but I'm hoping it'll be much more simple.

Full disclosure #1: that link is my referral code, so if you sign up with it, you bump me up higher on the waitlist

Much Fishing to Do

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As quickly as these rates are going up, I'm unsure of when it's smart to lock something in...it just seems like rates continue to rise, and that it might be unwise to lock in a current rate, especially for 3-5 years.

I have a need to keep a large sum available to me right now for a business opportunity, which I had assumed meant I'd be missing out on any interest by not really being able to risk putting it in a CD, but have noticed it just sitting in the VG Prime MM is now making real money (almost up to 2% now).  As high as that is, and assuming rates will continue climbing I don't see much advantage in putting it in a CD (though some CD early withdrawal penalties are less severe than others, but in the end I just don't feel I'm missing out on much having it in the MM).

Another Reader

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Looking at Fidelity, the Treasury auction on Monday will have three month and six month T Bills available.  The 3 month are anticipated to yield 1.9 percent and the six month are anticipated to yield 2.05 percent, both annualized.   These are auctions, so the rate is not guaranteed, but it's usually close.  No state income tax on treasuries, either.

Mr. Green

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I got a letter in the mail the other day from my bank, Wells Fargo, offering a 2% 13 month CD. $25k minimum. I'm seriously thinking about doing it, as my online savings account is something like 1.6%. I would still keep a chunk in my savings for emergency fund.
Synchrony Bank (online) is currently offering 2.35% on a 14 month CD. Only $2,000 minimum.

Bill_

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I got a letter in the mail the other day from my bank, Wells Fargo, offering a 2% 13 month CD. $25k minimum. I'm seriously thinking about doing it, as my online savings account is something like 1.6%. I would still keep a chunk in my savings for emergency fund.
Synchrony Bank (online) is currently offering 2.35% on a 14 month CD. Only $2,000 minimum.

Why bother? 1 Year Treasury is 2.25%, no state income tax and is the most liquid investment in the world, also only $1,000 minimum and you don't need an entirely new bank account, just buy in your brokerage account at auction.

jim555

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The bank CDs are lagging the Treasuries right now.  No reason to go CD when you can go Treasury.

katsiki

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This is probably a newb question but would someone explain how to buy treasuries?  I have Fidelity and Vanguard accounts available.

toganet

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This is probably a newb question but would someone explain how to buy treasuries?  I have Fidelity and Vanguard accounts available.

For Fidelity, start here: https://www.fidelity.com/fixed-income-bonds/individual-bonds/us-treasury-bonds