What CD would you buy today?

[jennifers]

Should probably have bought a CD yesterday lol. I have 30K to park in CDs for any amount of time. (emergency fund / down payment for a home account)

Here are my options: (from Ally - if you know somewhere a lot better I'll consider it)

18 months 4.25%
12 months 4.5%
9 months at 4.75%
6 months at 4.8%

I'm not really sure how to logically think about this situation.

[LifeHappens]

You can definitely get better rates. Check Doctor of Credit: https://www.doctorofcredit.com/high-interest-savings-to-get/#Best_CD_Rates

[dividendman]

Just buy treasuries: https://www.treasurydirect.gov/auctions/announcements-data-results/. The rates are just as good if not better and they are exempt from state tax.

If you don't want to create a treasurydirect account just buy a short term treasury ETF like SGOV. Totally liquid with all the benefits of a treasury.

I have no idea why anybody buys a CD over a treasury bill.

[Scandium]

Just buy treasuries: https://www.treasurydirect.gov/auctions/announcements-data-results/. The rates are just as good if not better and they are exempt from state tax.

If you don't want to create a treasurydirect account just buy a short term treasury ETF like SGOV. Totally liquid with all the benefits of a treasury.

I have no idea why anybody buys a CD over a treasury bill.

Because the rate is locked in? Treasury yields (in mutual funds) will drop as the rates drop, though some lag depending on the duration. I mean I'm putting my emergency cash in a treasury fund, to avoid state tax and higher yield than current CDs, but I'm aware that might change in the future.

[dividendman]

Just buy treasuries: https://www.treasurydirect.gov/auctions/announcements-data-results/. The rates are just as good if not better and they are exempt from state tax.

If you don't want to create a treasurydirect account just buy a short term treasury ETF like SGOV. Totally liquid with all the benefits of a treasury.

I have no idea why anybody buys a CD over a treasury bill.

Because the rate is locked in? Treasury yields will drop as the rates drop, though some lag depending on the duration. I mean I'm putting my emergency cash in a treasury fund, to avoid state tax and higher yield than current CDs, but I'm aware that might change in the future.

T-Bills are also locked in for their durations... you can just buy the equivalent duration T-Bill.

[ChpBstrd]

I'm actually drawn back to ibonds. You get 4.28% if you buy before Oct. 31. Early redemption terms are similar to a 5 year CD (lose one quarter of interest). But you'd be locking in the highest fixed rate since late 2007 in a 100% safe asset that is inflation-adjusted, and whose comparable nominal treasury bond yields 3.5%.

Basically, ibonds right now offer a limited window to go back in time and grab the risk-free yields that were available two or three months ago. Plus you get inflation adjustments in case this economy evolves into a stagflation situation. The very specific scenario where you'd regret an ibond versus a CD or nominal treasury would look something like collapsing inflation, yields returning to near-zero, and the housing market collapsing so that you pull out early and pay the interest penalty in exchange for scooping up a bargain. Even then, the difference in interest earned would be minimal.

The main downside is you can only apply $10k per year to this. Put the other $20k in SGOV or BIL.

[Villanelle]

Probably Prince's 1999. 

[GuitarStv]

Probably Prince's 1999. 

I don't even have the ability to play CDs any more.  :(

[LifeHappens]

Probably Prince's 1999. 

I don't even have the ability to play CDs any more.  :(

I cling to my 6 CD player with all my might.

[Must_ache]

I have no idea why anybody buys a CD over a treasury bill.

CD's have higher rates than Treasuries and are insured by the government.  As far as I can tell, the only downside to that extra yield is the bank goes under and there is some delay or inconvenience to getting your money back.  I'm neglecting tax implications here.

E*Trade currently shows a 5-yr rate of 3.538% for Treasuries and 4.45% for CDs.  To obtain $100K in 5 years you need to buy $84,043 in Treasuries and only $80,437 in CD's. 

[elysianfields]

Probably Prince's 1999. 

I don't even have the ability to play CDs any more.  :(

I cling to my 6 CD player with all my might.

I’m more of a vinyl guy, myself, and probably Are You Experienced?.

[Miss Piggy]

Discover often has very good CD rates. On my countertop right now, I'm looking at two recent postcards I've received advertising 5.1% for 9 months.

Also, Eric Clapton has a new CD coming out soon, so probably that one for me.

[GuitarStv]

Probably Prince's 1999. 

I don't even have the ability to play CDs any more.  :(

I cling to my 6 CD player with all my might.

I’m more of a vinyl guy, myself, and probably Are You Experienced?.

I think Axis Bold As Love was by far the better Hendrix album, if you swing that way.

[Scandium]

Discover often has very good CD rates. On my countertop right now, I'm looking at two recent postcards I've received advertising 5.1% for 9 months.

Also, Eric Clapton has a new CD coming out soon, so probably that one for me.

When is that from? I look at their website now and see 4.4% for 9 month CD. They don't offer anything above 4.5% for 12 months. This has dropped dramatically from a few months ago (kinda obviously)

[Miss Piggy]

Discover often has very good CD rates. On my countertop right now, I'm looking at two recent postcards I've received advertising 5.1% for 9 months.

Also, Eric Clapton has a new CD coming out soon, so probably that one for me.

When is that from? I look at their website now and see 4.4% for 9 month CD. They don't offer anything above 4.5% for 12 months. This has dropped dramatically from a few months ago (kinda obviously)

It's current...I've received two notices recently in the mail. When I get home, I'll hop back on with details. It's for a 9-month CD...that part I remember without looking.

[Miss Piggy]

Discover often has very good CD rates. On my countertop right now, I'm looking at two recent postcards I've received advertising 5.1% for 9 months.

Also, Eric Clapton has a new CD coming out soon, so probably that one for me.

When is that from? I look at their website now and see 4.4% for 9 month CD. They don't offer anything above 4.5% for 12 months. This has dropped dramatically from a few months ago (kinda obviously)

It's current...I've received two notices recently in the mail. When I get home, I'll hop back on with details. It's for a 9-month CD...that part I remember without looking.

Well, I stand corrected, @Scandium...sort of. I checked the URL shown on the postcards I received from Discover, and I'm seeing the same rate you stated above. BUT when I scan the QR code provided and look at the website on my phone, I see a note saying, and I quote, "If you received an advertisement in the mail addressed to you with an APY of 5.1% and form code "CD.TRI.APY.SMCHMP.0924", the advertised rate will be honored if you open and fund an account prior to 10/7/2024. If you have any questions or concerns during the account opening process, please contact us at 1-877-272-8093."

The 5.1% is for a 9-month CD. I'm certain I received this offer because I already have a Discover CD. But hey, maybe it would be worth a try for you if you're interested!

(Actually, now that I'm looking at the website on this laptop again, without the QR code, I'm seeing the same note I typed above. It's in a  yellow/gold box under the rates... on discover.com/openCD.)

[Scandium]

Discover often has very good CD rates. On my countertop right now, I'm looking at two recent postcards I've received advertising 5.1% for 9 months.

Also, Eric Clapton has a new CD coming out soon, so probably that one for me.

When is that from? I look at their website now and see 4.4% for 9 month CD. They don't offer anything above 4.5% for 12 months. This has dropped dramatically from a few months ago (kinda obviously)

It's current...I've received two notices recently in the mail. When I get home, I'll hop back on with details. It's for a 9-month CD...that part I remember without looking.

Well, I stand corrected, @Scandium...sort of. I checked the URL shown on the postcards I received from Discover, and I'm seeing the same rate you stated above. BUT when I scan the QR code provided and look at the website on my phone, I see a note saying, and I quote, "If you received an advertisement in the mail addressed to you with an APY of 5.1% and form code "CD.TRI.APY.SMCHMP.0924", the advertised rate will be honored if you open and fund an account prior to 10/7/2024. If you have any questions or concerns during the account opening process, please contact us at 1-877-272-8093."

The 5.1% is for a 9-month CD. I'm certain I received this offer because I already have a Discover CD. But hey, maybe it would be worth a try for you if you're interested!

(Actually, now that I'm looking at the website on this laptop again, without the QR code, I'm seeing the same note I typed above. It's in a  yellow/gold box under the rates... on discover.com/openCD.)

Interesting, thanks. Yes they must have sent out a promo, and now rates have dropped quite a bit. I did have a CD with them, but didn't get that offer. I was watching them for a while, but at the moment I'm not really considering CDs anyway, the rates aren't that great. I'd only do it to lock in a higher rate for longer, but unsurprisingly they don't give a good option for that, they drop quickly for longer durations. This inverted yield curve environment is just too weird.
I've rolled most of my emergency fund to vanguard treasury money market, currently have decent rate (5.25%), and I avoid ~5% state tax on the earnings (So a 5% CD would really be 4.75% after state tax). Sure it's drop soon, but I'm not going to worry about it.

[roomtempmayo]

Also, Eric Clapton has a new CD coming out soon, so probably that one for me.

One of our cars has a six disc changer, and I stocked that thing with 90s hits for $1/each off Amazon. 

I hear the kids have rediscovered tapes, so CDs must be next.  I figure I'll just hold on for the revival and be on the front end of it.

[Miss Piggy]

One of our cars has a six disc changer...

Wait...what!!?? Did this come with the car, like from the factory? What year? I never knew ANY cars came with CD changers!!! I'm suddenly back in my 1990 college apartment with my JVC 5-CD "turntable" that eventually died a slow, painful death. Man, I loved that thing!

[NotJen]

One of our cars has a six disc changer...

Wait...what!!?? Did this come with the car, like from the factory? What year? I never knew ANY cars came with CD changers!!! I'm suddenly back in my 1990 college apartment with my JVC 5-CD "turntable" that eventually died a slow, painful death. Man, I loved that thing!

My 2004 Ford Taurus had a 6 disc changer.  Base for whatever trimline I had (SEL?) - it was located in the armrest.

[GuitarStv]

2009 Honda Accord came with a 6 disc changer.  My stepmother had one.

[sonofsven]

Discover often has very good CD rates. On my countertop right now, I'm looking at two recent postcards I've received advertising 5.1% for 9 months.

Also, Eric Clapton has a new CD coming out soon, so probably that one for me.

When is that from? I look at their website now and see 4.4% for 9 month CD. They don't offer anything above 4.5% for 12 months. This has dropped dramatically from a few months ago (kinda obviously)

It's current...I've received two notices recently in the mail. When I get home, I'll hop back on with details. It's for a 9-month CD...that part I remember without looking.

Well, I stand corrected, @Scandium...sort of. I checked the URL shown on the postcards I received from Discover, and I'm seeing the same rate you stated above. BUT when I scan the QR code provided and look at the website on my phone, I see a note saying, and I quote, "If you received an advertisement in the mail addressed to you with an APY of 5.1% and form code "CD.TRI.APY.SMCHMP.0924", the advertised rate will be honored if you open and fund an account prior to 10/7/2024. If you have any questions or concerns during the account opening process, please contact us at 1-877-272-8093."

The 5.1% is for a 9-month CD. I'm certain I received this offer because I already have a Discover CD. But hey, maybe it would be worth a try for you if you're interested!

(Actually, now that I'm looking at the website on this laptop again, without the QR code, I'm seeing the same note I typed above. It's in a  yellow/gold box under the rates... on discover.com/openCD.)

I got the same offer of 5.1%/9 months

[roomtempmayo]

One of our cars has a six disc changer...

Wait...what!!?? Did this come with the car, like from the factory? What year? I never knew ANY cars came with CD changers!!! I'm suddenly back in my 1990 college apartment with my JVC 5-CD "turntable" that eventually died a slow, painful death. Man, I loved that thing!

2008 Volvo, and I still use it all the time.

[Heckler]

Should probably have bought a CD yesterday lol. I have 30K to park in CDs for any amount of time. (emergency fund / down payment for a home account)

Here are my options: (from Ally - if you know somewhere a lot better I'll consider it)

18 months 4.25%
12 months 4.5%
9 months at 4.75%
6 months at 4.8%

I'm not really sure how to logically think about this situation.

Wow.  Sorry to see how misunderstood your question became.  It’s like nobody read it, amIright?

To me, CDs (or GICs in Canada) are horribly wrong as an emergency fund, if they are the un-cashable type.  You have your emergency before the term is up, and you have no cash to use!  They are meant for cash you don’t need until a given timeframe.  I just bought our first 25k GIC with the plan to use it as income in late 2025.  Bonds are used for 2026-30 and stocks for beyond.  Cash for Emergency Fund.

Also as a home downpayment, a CD could be a better savings vehicle than cash, IF…
    1.  Your timeframe to buy a home is 100% known (ie, moving after X date when the kids are done school).
     2. The CD is only a portion of savings needed for a home purchase, and you know the timeframe to accumulate the total downpayment exceeds the term of the CD.

PS  for the peanut gallery: the only CD we still play is our Playstation 3 games, although it hasn’t been turned on since Netflix now goes through our Chromecast.

[eyesonthehorizon]

To me, CDs (or GICs in Canada) are horribly wrong as an emergency fund, if they are the un-cashable type.  You have your emergency before the term is up, and you have no cash to use!  They are meant for cash you don’t need until a given timeframe. ...

Also as a home downpayment, a CD could be a better savings vehicle than cash, IF…

CDs can’t be redeemed early in Canada?

ALWAYS READ REDEMPTION TERMS BEFORE BUYING but most US banks or credit unions I’ve ever looked at CDs from simply had a penalty in the form of an interest forfeiture of a certain defined period in months, based on the duration of the CD. So were an emergency to strike, you could just bite the lost interest & break the CD. (I seem to recall that then also results in something else you have to document for taxes but I’ve never had to cross that bridge.) Finding out from the bank ahead of time how long it takes to receive funds back when you break a CD would be good to know.

Since the point of an emergency fund is that you don’t need it unless there’s an emergency, I can see a strong argument for it. Or for those of us who want to keep an emergency fund of a whole year’s expenses or more, putting half or some portion in a CD, even a longer term CD, may make sense under those conditions. But I certainly wouldn’t do it if I truly couldn’t get that money back until maturity.

Bank & credit union CDs are usually nontransferable but brokered CDs may be transferable between institutions or able to be sold on a secondary market as a way to get out of them early (this may be at a loss, though.)

Now what I REALLY don’t understand are these newfangled “variable” CDs. I’d never see them until the last couple of months, but at least a few of the CDs I saw with deliriously high rates turned out to be at that promotional high rate for a month but thereafter “variable” with the prime rate... which sounds a lot like the customer takes all the time risk of locking up the money PLUS the interest rate risk of enrolling at a high rate that then plummets. So it’d be like a savings account, but you have to forfeit the interest if you withdraw? No thanks.

[Heckler]

CDs can’t be redeemed early in Canada?

In the great white north, a cashable GIC, yes, can be cashed out early.  But it comes with a lower rate than a non-cashable GIC, which is locked in for the period purchased.  As you say, always understand the terms before buying.

https://www.nerdwallet.com/ca/banking/what-is-a-non-redeemable-gic

https://www.nerdwallet.com/ca/banking/what-is-a-cashable-gic

[Heckler]

Now what I REALLY don’t understand are these newfangled “variable” CDs. 
...

No thanks.

We also have the honour of being sold "market linked GIC's".  Give the bank your money for a locked in period, they'll invest it for you properly and guarantee a minimum return of your initial investment, for a fee, while you simply sit with a book and scroll Instagram. 

Hard no thanks!

https://www.nerdwallet.com/ca/banking/what-is-a-market-linked-gic

[GuitarStv]

Now what I REALLY don’t understand are these newfangled “variable” CDs. 
...

No thanks.

We also have the honour of being sold "market linked GIC's".  Give the bank your money for a locked in period, they'll invest it for you properly and guarantee a minimum return of your initial investment, for a fee, while you simply sit with a book and scroll Instagram. 

Hard no thanks!

https://www.nerdwallet.com/ca/banking/what-is-a-market-linked-gic

I did that once in my youth before learning better.  : (