CD Rates

[Paper1]

In today's Sun I see an advertisement by Edward Jones offering 12 month CD's with a rate of 4.65%. Is anyone on the forum familiar with this offering and how they can offer so much more than a bank. Thank you in advance.

[kkingston57]

In today's Sun I see an advertisement by Edward Jones offering 12 month CD's with a rate of 4.65%. Is anyone on the forum familiar with this offering and how they can offer so much more than a bank. Thank you in advance.

Probably you will need to open a brokerage account with them and probably with a high deposit. Another broker made a similar offer to me 2 months ago.

[dewilson58]

Overview of Edward Jones CDs
Edward Jones is a brokerage service. When it comes to CDs, that means Edward Jones is not creating its own CDs the way traditional banks do. Instead, it buys CDs from other banks in large volumes and then resells them to customers at competitive rates. The CDs that Edward Jones sells are known as brokered CDs.

One advantage of brokered CDs is that it’s possible to buy CDs from multiple banks through Edward Jones. The FDIC will insure your CDs up to $250,000 at every institution you bank with. So getting CDs from multiple banks (through Edward Jones) will allow you to insure potentially more than $1 million. This isn’t relevant to everyone, but it provides some more security if you are putting a lot of money into CDs.

Edward Jones has 10 CD term options available. Term lengths range from three months to 10 years. As with most brokered CDs, the interest rates are competitive. However, it’s important to note that Edward Jones does not compound your interest. You will receive interest payments based on how many days you hold a CD and the annual percentage yield (APY).

If your CD term is one year or less, you will receive an interest payment when your CD reaches maturity. If your CD term is more than one year, Edward Jones will send you an interest payment monthly, quarterly, semiannually or annually (as well as when your CD reaches full maturity). The exact schedule for your interest payments will depend on your CD. Make sure to check the schedule before you open an account.

When your CD earns interest, payments will go straight into your money market account (MMA) or another bank account that you have with Edward Jones. The interest payment will send on the same day that it is paid. Similarly, Edward Jones will transfer your principal to another account when your CD reaches maturity. This differs from traditional banks, which renew your CD for another one of the same term length after your maturity date.

There are also some potential fees you should consider. Unlike with traditional bank CDs, brokers sometimes charge a commission for buying and selling CDs. These fees often come out of your interest payments and can cut into your earnings.

[Aces4]

Overview of Edward Jones CDs
Edward Jones is a brokerage service. When it comes to CDs, that means Edward Jones is not creating its own CDs the way traditional banks do. Instead, it buys CDs from other banks in large volumes and then resells them to customers at competitive rates. The CDs that Edward Jones sells are known as brokered CDs.

One advantage of brokered CDs is that it’s possible to buy CDs from multiple banks through Edward Jones. The FDIC will insure your CDs up to $250,000 at every institution you bank with. So getting CDs from multiple banks (through Edward Jones) will allow you to insure potentially more than $1 million. This isn’t relevant to everyone, but it provides some more security if you are putting a lot of money into CDs.

Edward Jones has 10 CD term options available. Term lengths range from three months to 10 years. As with most brokered CDs, the interest rates are competitive. However, it’s important to note that Edward Jones does not compound your interest. You will receive interest payments based on how many days you hold a CD and the annual percentage yield (APY).

If your CD term is one year or less, you will receive an interest payment when your CD reaches maturity. If your CD term is more than one year, Edward Jones will send you an interest payment monthly, quarterly, semiannually or annually (as well as when your CD reaches full maturity). The exact schedule for your interest payments will depend on your CD. Make sure to check the schedule before you open an account.

When your CD earns interest, payments will go straight into your money market account (MMA) or another bank account that you have with Edward Jones. The interest payment will send on the same day that it is paid. Similarly, Edward Jones will transfer your principal to another account when your CD reaches maturity. This differs from traditional banks, which renew your CD for another one of the same term length after your maturity date.

There are also some potential fees you should consider. Unlike with traditional bank CDs, brokers sometimes charge a commission for buying and selling CDs. These fees often come out of your interest payments and can cut into your earnings.

You were Mr. Helpful, great analogy.:ho:

[Kenswing]

Also make sure the cd is call protected. The last thing you want is for rates to drop and your cd called early.

[dewilson58]

In today's Sun I see an advertisement by Edward Jones offering 12 month CD's with a rate of 4.65%. Is anyone on the forum familiar with this offering and how they can offer so much more than a bank. Thank you in advance.

Also, must you investigate if you move forward............................At some brokers, if you buy a CD thru them and you need your cash early, they sell your CD on the market, with fees and with market pricing......which may not be good. Unlike buying from a "bank", you lose some interest for early withdrawal.

Could be a good opportunity,,,,,,,,,,,,,,,,,,,,,,,,,jus go in with eyes wide open and ask questions.

[retiredguy123]

In today's Sun I see an advertisement by Edward Jones offering 12 month CD's with a rate of 4.65%. Is anyone on the forum familiar with this offering and how they can offer so much more than a bank. Thank you in advance.
OP, you need to shop around. That is not a great rate. Fidelity Investments is offering 12 month CDs that are paying 4.7 percent and 24 month CDs paying 4.9 percent. They are new issue FDIC insured, non-callable, bank CDs. No fees at all. If you open a Fidelity brokerage account, they will buy the CDs and manage them in your account. And, they have an office in Lake Sumter. Stay away from local banks for CDs.

[rustyp]

12 month US treasury bill auction last week has a yield of 4.7%+. You can purchase directly from the government on line. $100 minimum $10 million max. Next 12 month auction Nov 29th.

[dewilson58]

OP, you need to shop around. That is not a great rate. Fidelity Investments is offering 12 month CDs that are paying 4.7 percent and 24 month CDs paying 4.9 percent. They are new issue FDIC insured, non-callable, bank CDs. No fees at all. If you open a Fidelity brokerage account, they will buy the CDs and manage them in your account. And, they have an office in Lake Sumter. Stay away from local banks for CDs.

Not an EJ fan, but they are offering the same 4.9% rate.
4.65% v 4.70%........minor.

[PJOHNS2654]

Several banks are paying more than 4% on 12 month CD'S. Check Bankrate.com

[retiredguy123]

12 month US treasury bill auction last week has a yield of 4.7%+. You can purchase directly from the government on line. $100 minimum $10 million max. Next 12 month auction Nov 29th.
True. But, to me, it is much easier to set up a brokerage account with Vanguard or Fidelity, and have access to hundreds of new issue and market based CDs and Treasury bills that are held and managed in your account. They will purchase these products and resell them for you anytime you want. Why bother with the hassle of dealing directly with the Federal Government?

[retiredguy123]

Not an EJ fan, but they are offering the same 4.9% rate.
4.65% v 4.70%........minor.
My point was that the Edward Jones newspaper ad is nothing to get excited about.

[manaboutown]

Just checked Schwab which has 1 yr CD @ 4.85 %; 2 yr CD @ 5.0%. 1 year treasury pays 4.8%.

[Babubhat]

Get better rates on Treasuries. Check your broker

Fidelty (https://fixedincome.fidelity.com/ftgw/fi/FILanding?bar=p#tbcurrent-yields%7Chighest-yield)

[Paper1]

Overview of Edward Jones CDs
Edward Jones is a brokerage service. When it comes to CDs, that means Edward Jones is not creating its own CDs the way traditional banks do. Instead, it buys CDs from other banks in large volumes and then resells them to customers at competitive rates. The CDs that Edward Jones sells are known as brokered CDs.

One advantage of brokered CDs is that it’s possible to buy CDs from multiple banks through Edward Jones. The FDIC will insure your CDs up to $250,000 at every institution you bank with. So getting CDs from multiple banks (through Edward Jones) will allow you to insure potentially more than $1 million. This isn’t relevant to everyone, but it provides some more security if you are putting a lot of money into CDs.

Edward Jones has 10 CD term options available. Term lengths range from three months to 10 years. As with most brokered CDs, the interest rates are competitive. However, it’s important to note that Edward Jones does not compound your interest. You will receive interest payments based on how many days you hold a CD and the annual percentage yield (APY).

If your CD term is one year or less, you will receive an interest payment when your CD reaches maturity. If your CD term is more than one year, Edward Jones will send you an interest payment monthly, quarterly, semiannually or annually (as well as when your CD reaches full maturity). The exact schedule for your interest payments will depend on your CD. Make sure to check the schedule before you open an account.

When your CD earns interest, payments will go straight into your money market account (MMA) or another bank account that you have with Edward Jones. The interest payment will send on the same day that it is paid. Similarly, Edward Jones will transfer your principal to another account when your CD reaches maturity. This differs from traditional banks, which renew your CD for another one of the same term length after your maturity date.

There are also some potential fees you should consider. Unlike with traditional bank CDs, brokers sometimes charge a commission for buying and selling CDs. These fees often come out of your interest payments and can cut into your earnings.

Thank you for taking time writing a very detailed answer to my inquiry. I am now armed with a number of good questions to ask.

[Michael G.]

I am now armed with a number of good questions to ask.


Yeah, like telling them to take their "Potential Fees" and stick where the sun don't shine.

[FastAndCurious]

You might consider looking into US treasury bills which can easily be bought through your online account. They may have some advantages.
They can be bought for shorter terms, like 3 months and 6 months.
I just checked Fidelity and 3 month was paying 4.34%
6 month is paying 4.52% and 1 year is at 4.76%
These are backed by the US government.
Staggering the terms allows you to "ladder" the investments so you have money becoming available every few months if needed.
In most cases they are also exempt from state taxes on the earnings.
You still have to pay federal income tax on earnings of course.
There are a lot of videos on youtube that will help educate anyone.
I am NOT a broker or an expert! Good luck.

[Babubhat]

Fidelity money market paying 3.06 on cash balances.

All current CD and Treasury rates at this link

Rates (https://fixedincome.fidelity.com/ftgw/fi/FILanding?bar=p#tbcurrent-yields%7Chighest-yield)

https://home.treasury.gov/system/files/221/Tentative-Auction-Schedule.pdf

[tfulgieri]

Well written except for one thing. The quoted rates are net of all commissions, so if the add says 4%, you get 4%. The broker does get paid but as I used to say to clients "if Jones kept the CD they, would earn slightly more than the 4% you are getting".

[MandoMan]

In today's Sun I see an advertisement by Edward Jones offering 12 month CD's with a rate of 4.65%. Is anyone on the forum familiar with this offering and how they can offer so much more than a bank. Thank you in advance.

Doesn’t that mean that with the current inflation, you will lose 4% in a year? Hardly a good investment.

[rustyp]

Doesn’t that mean that with the current inflation, you will lose 4% in a year? Hardly a good investment.

OK I'll bite. Where can I get a guaranteed investment which yields inflation plus normal 4% (approx 12% +) that is FDIC insured ?

[main12use]

If you want your money liquid - VIO Bank online Cornerstone money market is now 3.52. No fees or penalties. Minimum to open $100.

[Iowagirl2]

Thank you I’ve always wondered why bank CDs and brokered CDs are different.

[clouwho]

You were Mr. Helpful, great analogy.:ho:

I am getting great rates on FDIC insured brokered CD within my vanguard account. NO FEES or commissions.

Also, there are 4.3-5.3% rate short term (3-5 years) fixed term annuities available at pretty much every bank, investment house etc.

And t bills and notes are AWESOME right now.

LOTS of decent returns in the Uber low risk category for a change.

Of course, not enough reward to offset this ridiculous amount of inflation, but great options for short term safe money.

[clouwho]

Also make sure the cd is call protected. The last thing you want is for rates to drop and your cd called early.

YES, critically important part of due diligence.

On vanguard you can sort for non-callable, term, FDIC insured on both primary and secondary market CDs

[clouwho]

Also, must you investigate if you move forward............................At some brokers, if you buy a CD thru them and you need your cash early, they sell your CD on the market, with fees and with market pricing......which may not be good. Unlike buying from a "bank", you lose some interest for early withdrawal.

Could be a good opportunity,,,,,,,,,,,,,,,,,,,,,,,,,jus go in with eyes wide open and ask questions.

Banks are charging EXORBITANT early withdrawal fees on CDs. 3 months up to ALL months if it is a very high interest rate

Read the fine print on everything!

[clouwho]

Depositaccounts.com tends to have even more offerings than bank rate.com
Credit unions tend to have higher rates than banks.
Internet banks almost always beat brick and mortar CD rates (unless buying a brokered CD via your investment house)

Do your due diligence and make sure your financial institutions are in good shape. Bauer Financial is a good site to check on the fiscal health of the institutions holding your money.

Star Ratings | BauerFinancial (https://www.bauerfinancial.com/star-ratings/)


https://www.depositaccounts.com/

[daniel200]

As others have noted, in the current environment US treasuries are a solid and safe choice. Attached is a fidelity screenshot of todays yields on various CD’s, bonds and US Treasuries. Currently you can get 4.75% on a one year US treasury.

You can purchase any of these on the fidelity website in a few mouse clicks if you have an account set up.

The Fidelity money market fund FZDXX currently is paying 3.59%

[Carol Fiore]

In today's Sun I see an advertisement by Edward Jones offering 12 month CD's with a rate of 4.65%. Is anyone on the forum familiar with this offering and how they can offer so much more than a bank. Thank you in advance.


I buy my CD online with Fidelity. I can get 4.75 for a year. It easy to open an account. They have an office in Sumter. Then I buy the CD myself. Just $1000 MIN.

[rsmurano]

You can get a 2 year treasury note that you I’ll give you 4.7% if you want to lock up your money. I want to get back in the market when things get back to normal so I don’t want to have my money locked up where I can’t get to it when I want

[dewilson58]

You can get a 2 year treasury note that you I’ll give you 4.7% if you want to lock up your money. I want to get back in the market when things get back to normal so I don’t want to have my money locked up where I can’t get to it when I want

YEP.

There is a reason rates are going up...............now is NOT the time to lock in. :22yikes:

[manaboutown]

YEP.

There is a reason rates are going up...............now is NOT the time to lock in. :22yikes:

True that!

The T-bills I gradually bought over a few months earlier this year all become due in January and I plan to go short term, 3 to 6 months, no longer. The fed has not signaled it is backing off on raising rates even higher...

Stormy seas are ahead. Time to batten down the hatches.

[New Englander]

You can get a 2 year treasury note that you I’ll give you 4.7% if you want to lock up your money. I want to get back in the market when things get back to normal so I don’t want to have my money locked up where I can’t get to it when I want

Are things ever going to get back to normal?

[kkingston57]

My point was that the Edward Jones newspaper ad is nothing to get excited about.

Compared to 6 months ago and longer it is exciting if you are a very conservative investor. CD's and Money Market accounts were terrible

[melpetezrinski]

Doesn’t that mean that with the current inflation, you will lose 4% in a year? Hardly a good investment.

Oh, there are so many variables that go into that decision but I will say that a majority of investors will agree with your “hardly a good investment” stance but there are many investors that are extremely conservative when they reach certain stages of life or don’t invest in the stock market. For those investors, 4% can be “a good investment” (Interest rate of change * investment portfolio exceeds inflation rate of change * expenses).

[OhioBuckeye]

I’m sure lots of people are interested if they have the money to tie up for 12 months, sounds like a great deal!

[starbaby]

You are very informed. Thank you.

[chrissy2231]

OP, you need to shop around. That is not a great rate. Fidelity Investments is offering 12 month CDs that are paying 4.7 percent and 24 month CDs paying 4.9 percent. They are new issue FDIC insured, non-callable, bank CDs. No fees at all. If you open a Fidelity brokerage account, they will buy the CDs and manage them in your account. And, they have an office in Lake Sumter. Stay away from local banks for CDs.
I Bond 6+% on $10K

[KeithS]

Go to Treasury direct.gov you can buy treasury bills anywhere from 4 weeks to 52 weeks and get 4%or more.

[Villages Kahuna]

Why would you buy a CD from Edward Jones rather than a short-term Treasury note or bill paying the same or a little more. Last week I sold some stocks and reallocated the proceeds, buying two-year Treasuries paying 4.78%.

Take a pass on the CD and tell Edward Jones to buy you one- or two-year Treasuries!

[Gigi3000]

Overview of Edward Jones CDs
Edward Jones is a brokerage service. When it comes to CDs, that means Edward Jones is not creating its own CDs the way traditional banks do. Instead, it buys CDs from other banks in large volumes and then resells them to customers at competitive rates. The CDs that Edward Jones sells are known as brokered CDs.

One advantage of brokered CDs is that it’s possible to buy CDs from multiple banks through Edward Jones. The FDIC will insure your CDs up to $250,000 at every institution you bank with. So getting CDs from multiple banks (through Edward Jones) will allow you to insure potentially more than $1 million. This isn’t relevant to everyone, but it provides some more security if you are putting a lot of money into CDs.

Edward Jones has 10 CD term options available. Term lengths range from three months to 10 years. As with most brokered CDs, the interest rates are competitive. However, it’s important to note that Edward Jones does not compound your interest. You will receive interest payments based on how many days you hold a CD and the annual percentage yield (APY).

If your CD term is one year or less, you will receive an interest payment when your CD reaches maturity. If your CD term is more than one year, Edward Jones will send you an interest payment monthly, quarterly, semiannually or annually (as well as when your CD reaches full maturity). The exact schedule for your interest payments will depend on your CD. Make sure to check the schedule before you open an account.

When your CD earns interest, payments will go straight into your money market account (MMA) or another bank account that you have with Edward Jones. The interest payment will send on the same day that it is paid. Similarly, Edward Jones will transfer your principal to another account when your CD reaches maturity. This differs from traditional banks, which renew your CD for another one of the same term length after your maturity date.

There are also some potential fees you should consider. Unlike with traditional bank CDs, brokers sometimes charge a commission for buying and selling CDs. These fees often come out of your interest payments and can cut into your earnings.

Wow. Extremely helpful Mr Helpful. Ty

[Gigi3000]

Also make sure the cd is call protected. The last thing you want is for rates to drop and your cd called early.



Right now, interest rates are suppose to rise, last i read. Would you worry much about callable or not on a 4.70 CD? for 13 months?

[Babubhat]

Fidelity.com is Temporarily Unavailable (https://fixedincome.fidelity.com/ftgw/fi/FILanding?bar=p#tbcds%7Ctreasury%7Ccd-new-issue%7Call)

All you need. Ignore the error message . It works

[chrissy2231]

In today's Sun I see an advertisement by Edward Jones offering 12 month CD's with a rate of 4.65%. Is anyone on the forum familiar with this offering and how they can offer so much more than a bank. Thank you in advance.
use marcus best rate CD & save acct

[Gigi3000]

I found a non callable Schwab CD at Vanguard today for 13 months at 4.70% fyi

[chrissy2231]

In today's Sun I see an advertisement by Edward Jones offering 12 month CD's with a rate of 4.65%. Is anyone on the forum familiar with this offering and how they can offer so much more than a bank. Thank you in advance.
i have their bonds. ibond 6.86%. treasury bill 4.8%

[Aces4]

Banks are charging EXORBITANT early withdrawal fees on CDs. 3 months up to ALL months if it is a very high interest rate

Read the fine print on everything!


Why would you withdraw early? Good planning precludes that from happening.

[Aces4]

Oh, there are so many variables that go into that decision but I will say that a majority of investors will agree with your “hardly a good investment” stance but there are many investors that are extremely conservative when they reach certain stages of life or don’t invest in the stock market. For those investors, 4% can be “a good investment” (Interest rate of change * investment portfolio exceeds inflation rate of change * expenses).

Careful planning has allowed us to ladder CDs from 4.00%-4:50%-4:75% through credit unions and banks, no fees. We have a reserve amount in a money market fund and a small balance CD at a lower rate which we will apply to this year’s RMD. With the social security increase, we are able to manage the raging, current inflation with the planned principle attrition. Everyone has different needs and requirements, as we know.

[rmd2]

If you get a brokerage account you will pay a management fee.

[rmd2]

i have their bonds. ibond 6.86%. treasury bill 4.8%

That ibond quote is good for 6 months. Then they will set another rate. It could be higher/could be lower. Every 6 months the ibond sets a new rate.

[retiredguy123]

If you get a brokerage account you will pay a management fee.
There is no separate management fee with Fidelity. The brokered CDs listed on their website already have any fees built into the APY. There is a percentage fee if you turn over funds for them to manage, but that is optional, and you can allow them to manage only a part of your portfolio. Typically, that would be the individual stocks in your portfolio. It wouldn't make sense to pay them to select brokered CDs.

[manaboutown]

If you get a brokerage account you will pay a management fee.

I currently have accounts at three separate brokerages: Ameriprise, Schwab and Vanguard. I pay no management fees as I manage my own investments and trade on-line without consulting or engaging an "advisor" in any capacity even though Ameriprise and Schwab have assigned advisors to me. I am certain the advisors are paid based on the size and number of accounts assigned to them. The brokerages of course make money on trade spreads, uninvested funds in accounts and in other ways. Ameriprise charges modest commissions but I rarely trade and have had the accounts since it was Olde Discount back in the 1970s which was bought by H & R Block after which Ameriprise bought the advisory business from H & R. Whew!

[Stu from NYC]

Why would you withdraw early? Good planning precludes that from happening.

Generally true but sometimes life gets in the way of planning.

[Aces4]

Generally true but sometimes life gets in the way of planning.

Believe me, I understand and thus the money market fund.

[Michael G.]

Worst thing about money market or savings accounts is the percentage can change over time.
Hopefully increase.

[Stu from NYC]

Believe me, I understand and thus the money market fund.

But too easy to run out of money with a long retirement. I like mutual funds with good long term track record with manager not near retirement age.

[Aces4]

But too easy to run out of money with a long retirement. I like mutual funds with good long term track record with manager not near retirement age.

CD money is not as spendable as mutual fund money? I don’t quite understand your analogy but I do know our earnings and principle are FDIC and NCUA insured. We don’t have to pay any fees for our earnings.

[Boomer]

There is no separate management fee with Fidelity. The brokered CDs listed on their website already have any fees built into the APY. There is a percentage fee if you turn over funds for them to manage, but that is optional, and you can allow them to manage only a part of your portfolio. Typically, that would be the individual stocks in your portfolio. It wouldn't make sense to pay them to select brokered CDs.


I know. I have bought some for a short and shorter term. I was getting ready to do it again, but started over-thinking how long to tie up the cash.......

Sure, a CD is a known and it's good to have some knowns. And I have been waiting forever to get some return on cash......

But I could not decide how long to tie up the next batch......

I have been fretting about this for days.......How much? How long? I already bought a 4.7 something, so there it sits, and that's OK.....but I guess the thrill is gone.......

And soooooo, instead of buying a CD this time, I just spent the money on a utility that will pay me 4-ish. (not as much as a current CD rate would) It will never take me on a rocket ride, but the check will be in the mail, and there is always hope for gain along the way, and the term to hold is strictly up to me -- months? years? forever?

Hello, my name is Boomer, and I think I am addicted to dividends. (sigh)

[manaboutown]

Since I sold a couple investment real estate properties, one in 2022 and the other last month, I have put most of the proceeds into T bills, either 3 or 6 monthers as I will need 30%ish of my LTCGs for Uncle Sam come April 18th. I have been putting a fraction of the proceeds into mostly dividend paying stocks, slowly and carefully... I really do not understand where the economy is going so I am being cautious/

[Ecuadog]

Not for nothing... I believe my Vanguard sweep acount (Vanguard Federal Money Market Fund - VMFXX) has a current yield of 4.50%.

[Caymus]

Not for nothing... I believe my Vanguard sweep acount (Vanguard Federal Money Market Fund - VMFXX) has a current yield of 4.50%.

CPI was worse than expected today. You will get close to 5% soon.

[kingofbeer]

CPI was worse than expected today. You will get close to 5% soon.
Capital One has 11 month CD at 5%

[daniel200]

GM Right Notes recently raised their rate from 4.5% to 4.75%. They have a $500 minimum. This is really like a money market fund as you can move money at your discretion at any time via electronic funds transfer from your bank account. It’s not a CD or note in that there is no minimum investment term. Interest accrues daily but is paid at the end of the month.

You can move your money back to your bank at any time with no penalty via their online tool. Mellon Bank manages the program.

The rate paid seems to float with the FED treasury target rate as they have been steadily raising the rate paid in step with the FED

I have used this extensively since rates have been rising from near zero without problem, but using it less now because of the availability of treasury bonds near 5%.

[Caymus]

Capital One has 11 month CD at 5%

Different instruments. Ecuadog has a Vanguard sweep which pays interest pending reinvestments.

[Kenswing]

5.26% yield on a 1-year Treasury at Fidelity right now.

[Caymus]

5.26% yield on a 1-year Treasury at Fidelity right now.

Short term rates will probably reach 6% soon based on Powell's testimony today.

[keithgerri]

Synchrony bank paying 5% on 14 month cd.no fees no minimum

[Babubhat]

Fidelity.com is Temporarily Unavailable (https://fixedincome.fidelity.com/ftgw/fi/FILanding?bar=p#tbcds%7Ctreasury%7Ccd-new-issue%7Call)



Top rates chart. Ignore the unavailable message

[Mlundberg]

I use Vanguard for brokered CD,s. It's simple with the click of a mouse. Rates are competitive and no fees. I would never buy a bank CD again.

[Plinker]

I use Vanguard for brokered CD,s. It's simple with the click of a mouse. Rates are competitive and no fees. I would never buy a bank CD again.

Agree with Vanguard choice. Callable, 12-18 months at 5.35%. I am not concerned with callable CD’s with short-terms. Longer terms, yes.
A big advantage with Vanguard, etc is you won’t be subjected to an Edward Jones sales pitch for other more lucrative, commission-based services.

[retiredguy123]

I use Vanguard for brokered CD,s. It's simple with the click of a mouse. Rates are competitive and no fees. I would never buy a bank CD again.
I agree. I only use banks for checking accounts and credit cards. They cannot compete with investment companies like Vanguard and Fidelity for earning interest.

[Aces4]

I agree. I only use banks for checking accounts and credit cards. They cannot compete with investment companies like Vanguard and Fidelity for earning interest.

I didn’t realize those two companies are FDIC insured. Peace of mind…. Priceless.

[dewilson58]

I didn’t realize those two companies are FDIC insured. Peace of mind…. Priceless.

Not 100% true.

[Aces4]

Not 100% true.

They are FDIC insured and no fees anywhere?

[dewilson58]

They are FDIC insured and no fees anywhere?

Nope.

Example from Van's website: Vanguard Municipal Money Market Fund: The Fund is only available to retail investors (natural persons). You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The Fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the Fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

Another: Vanguard Cash Reserves Federal Money Market Fund and Vanguard Federal Money Market Fund: You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

[Aces4]

Nope.

Example from Van's website: Vanguard Municipal Money Market Fund: The Fund is only available to retail investors (natural persons). You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The Fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the Fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

Another: Vanguard Cash Reserves Federal Money Market Fund and Vanguard Federal Money Market Fund: You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

As I thought. So you think peace of mind isn’t important.:icon_wink:

[retiredguy123]

They are FDIC insured and no fees anywhere?
Not sure I understand your post. You can buy brokered CDs from Vanguard and Fidelity that are FDIC insured, and they will sell you U.S. Treasury products that are backed by the Government. They also sell non-insured products.

The Vanguard and Fidelity companies are not personally FDIC insured, but they don't fund the products that they sell. They are brokers who buy and sell products for you, and hold them in an account for you in your name. So, if you buy a brokered CD that is FDIC insured, you are protected the same way the original purchaser is protected.

[retiredguy123]

As I thought. So you think peace of mind isn’t important.:icon_wink:
Note that all products sold by banks are not FDIC insured. FDIC deposit insurance only covers certain deposit products, such as checking and savings accounts, money market deposit accounts (MMDAs), and certificates of deposit (CDs). Other products like mutual funds and annuities are not FDIC insured, even if you buy them from an FDIC bank. So, a municipal money market fund similar to the Vanguard fund, referred to in Post No. 75, but sold by a bank, would not be FDIC insured.

[Aces4]

Not sure I understand your post. You can buy brokered CDs from Vanguard and Fidelity that are FDIC insured, and they will sell you U.S. Treasury products that are backed by the Government. They also sell non-insured products.

The Vanguard and Fidelity companies are not personally FDIC insured, but they don't fund the products that they sell. They are brokers who buy and sell products for you, and hold them in an account for you in your name. So, if you buy a brokered CD that is FDIC insured, you are protected the same way the original purchaser is protected.

No fees or other accounts necessary for brokered CDs? If a cd is brokered, there is either money taken off the top or at the end of the cd. One had better be sure their investment is FDIC insured and not something else.

[Caymus]

I didn’t realize those two companies are FDIC insured. Peace of mind…. Priceless.


All the "brokered" CDs I ever bought through Schwab and TD Ameritrade were FDIC insured.

[retiredguy123]

No fees or other accounts necessary for brokered CDs? If a cd is brokered, there is either money taken off the top or at the end of the cd. One had better be sure their investment is FDIC insured and not something else.
Vanguard and Fidelity do make money with built in management fees, but the quoted yields for brokered CDs are the actual yield that you will receive. There is no separate fee to have an account with these companies. A bank can only offer you CDs that they have created. But, Vanguard and Fidelity have access to thousands of products from thousands of sources. An individual bank cannot compete for yields with Vanguard and Fidelity.

[Aces4]

Vanguard and Fidelity do make money with built in management fees, but the quoted yields for brokered CDs are the actual yield that you will receive. There is no separate fee to have an account with these companies. A bank can only offer you CDs that they have created. But, Vanguard and Fidelity have access to thousands of products from thousands of sources. An individual bank cannot compete for yields with Vanguard and Fidelity.

That may be true but how many of those products are international and not FDIC insured. Local institutions tend to be very invested in their communities and country for the greater good of the people and their financial needs. To each their own and no one is calling my investment is a plus.

[Boomer]

That may be true but how many of those products are international and not FDIC insured. Local institutions tend to be very invested in their communities and country for the greater good of the people and their financial needs. To each their own and no one is calling my investment is a plus.


The Fidelity site has a list of banks for their brokered CDs. As you look at the list, you will see names of banks you know and there will be some whose bricks-and-mortar you mght drive past every day. Yet, you will not get the same rate by walking in the door.

You can choose call-protected or not. And the FDIC insurance is there.

I cannot figure out though how The Bank of China is FDIC insured, but it looks like BOCNY is based in NYC and somehow has the insurance and has had it for years. But you can just buy American banks. There are lots of choices on the list. You get to pick the bank(s).

Boomer

[Aces4]

The Fidelity site has a list of banks for their brokered CDs. As you look at the list, you will see names of banks you know and there will be some whose bricks-and-mortar you mght drive past every day. Yet, you will not get the same rate by walking in the door.

You can choose call-protected or not. And the FDIC insurance is there.

I cannot figure out though how The Bank of China is FDIC insured, but it looks like BOCNY is based in NYC and somehow has the insurance and has had it for years. But you can just buy American banks. There are lots of choices on the list. You get to pick the bank(s).

Boomer

For the small difference, I prefer to walk into my local S & L or bank. It’s less hassle and they match advertised rates in the area. It’s more convenient when RMD time rolls around and at this point in our lives, we’re tired of the treadmill and simple is our goal.

[Woodbear]

5.26% yield on a 1-year Treasury at Fidelity right now.

Keeps going up. No reason to lock in long term


3mo 6mo 9mo 1yr
CDs (New Issues) 4.90% 5.00% 5.25% 5.40%

BONDS
U.S. Treasury 5.14% 5.27% 5.32% 5.36%

[dewilson58]

I cannot figure out though how The Bank of China is FDIC insured, but it looks like BOCNY is based in NYC and somehow has the insurance .Boomer

It was grandfathered in back in 1981.

[Caymus]

The Fidelity site has a list of banks for their brokered CDs. As you look at the list, you will see names of banks you know and there will be some whose bricks-and-mortar you mght drive past every day. Yet, you will not get the same rate by walking in the door.

You can choose call-protected or not. And the FDIC insurance is there.

I cannot figure out though how The Bank of China is FDIC insured, but it looks like BOCNY is based in NYC and somehow has the insurance and has had it for years. But you can just buy American banks. There are lots of choices on the list. You get to pick the bank(s).

Boomer

In the past I have purchased FDIC insured CD's from Bank Hapoalin (Israel), State Bank Of India as well as the Bank of China.

[Aces4]

In the past I have purchased FDIC insured CD's from Bank Hapoalin (Israel), State Bank Of India as well as the Bank of China.

I rest my case.

[Boomer]

It is too bad that these rates are a result of the Fed trying to play catch-up with inflation……when they have let stupidly low rates ride for years and years. That simply could not continue and now we are seeing the fallout.

But, hey, I will take these CD rates and play the short-term game. I recently bought Schwab and Truist and will be shopping again soon. (I did not buy into the BOC because I simply did not want to. I had looked up that FDIC thing for them just to see WTH? It has been there a loooong time.)

To each his/her own though. I understandand, and I would never try to tell anyone else where to put their money. If they ask me, I do share a very general idea of what I do.

We all have our own risk tolerance and we should behave accordingly. I have only 2 rules for when it comes to where to put money: 1.) Know Thyself and 2.) Understand what you are buying.

Boomer

[retiredguy123]

In the past I have purchased FDIC insured CD's from Bank Hapoalin (Israel), State Bank Of India as well as the Bank of China.
FDIC insurance has never made sense to me. The limit is $250K per account, but you can set up about 4 or more different accounts with different names and account types and easily get millions in coverage. And if you want more coverage, you can just open accounts in different banks. Apparently, foreign banks can sell FDIC insured products if they do business in the U.S. Obviously, the Government doesn't care about protecting taxpayer money with reasonable insurance limits. Personally, I don't think FDIC insurance is very important as long as you spread your investments around and diversify.

[manaboutown]

This is a cite from 2014 so not current. Probably a lesser ability to compensate savers exists today.

"The FDIC currently has far less money in its fund than it has insured deposits: as of Sept. 1, about $41 billion in reserve against $6 trillion in insured deposits. (There are over $9 trillion on deposit at U.S. banks, by the way, so more than $3 trillion in deposits is completely uninsured.) "

Is your money safe at the bank? An economist says ‘no’ and withdraws his | PBS NewsHour (https://www.pbs.org/newshour/economy/is-your-money-safe-at-the-bank-an-economist-says-no-and-withdraws-his)

This is more current and from the horse's mouth so to speak.

"The DIF balance has risen every quarter since the end of 2009, and stood at a record $119.4 billion on March 31, 2021, up from $110.3 billion at the end of 2019. The reserve ratio stood at 1.25 percent at March 31, 2021, down from 1.41 percent at the end of 2019."

From: FDIC: Insurance Program (https://www.fdic.gov/about/strategic-plans/strategic/insurance.html)

[dewilson58]

This is a cite from 2014 so not current. Probably a greater inability to compensate savers exists today.

"The FDIC currently has far less money in its fund than it has insured deposits: as of Sept. 1, about $41 billion in reserve against $6 trillion in insured deposits. (There are over $9 trillion on deposit at U.S. banks, by the way, so more than $3 trillion in deposits is completely uninsured.) "

Is your money safe at the bank? An economist says ‘no’ and withdraws his | PBS NewsHour (https://www.pbs.org/newshour/economy/is-your-money-safe-at-the-bank-an-economist-says-no-and-withdraws-his)

If >$41B needed......................it's called printing money.

[Aces4]

FDIC insurance has never made sense to me. The limit is $250K per account, but you can set up about 4 or more different accounts with different names and account types and easily get millions in coverage. And if you want more coverage, you can just open accounts in different banks. Apparently, foreign banks can sell FDIC insured products if they do business in the U.S. Obviously, the Government doesn't care about protecting taxpayer money with reasonable insurance limits. Personally, I don't think FDIC insurance is very important as long as you spread your investments around and diversify.

The $250,000. is somewhat of a pain but it spreads the risk if one bank fails. If everyone dumped all their money in the overly generous interest rates and low loan rates bank and it fails, the overt risk is obvious. As Wilson points out, the Fed can print money to cover FDIC. I’m old enough to remember the generation which lived through the Great Depression and saw some of the worthless stock certificates they were left holding. Their savings were decimated.

[Boomer]

I just took a quick look at brokered CDs and saw that they seem to be creeping down a little this week. There are not as many at the 5% mark.

Is anybody else wondering if the window on the 5% might be closing? The list of those available is definitely a lot shorter than it was a couple of weeks ago.

Boomer

[fgaba1949]

In today's Sun I see an advertisement by Edward Jones offering 12 month CD's with a rate of 4.65%. Is anyone on the forum familiar with this offering and how they can offer so much more than a bank. Thank you in advance.

Instead get a short term 6 months or 1 year T Note,,Treasury Notes make more sense and are the safest investment u can make

[daniel200]

I just took a quick look at brokered CDs and saw that they seem to be creeping down a little this week. There are not as many at the 5% mark.

Is anybody else wondering if the window on the 5% might be closing? The list of those available is definitely a lot shorter than it was a couple of weeks ago.

Boomer

GM Rightnotes just increased their payout from 4.75 to 5%. This is not a CD. It is more like an interest bearing account. Interest accrues daily with no minimum time period. Easy to to deposit/remove money online to your bank account using online ACH transfer. It is not FDIC insured so if that is important, this is not for you. It is administered by Mellon Bank for General Motors

If you want any portion of your money back, you go online and set up the redemption amount and your money is deposited into your account on the next business day.

[retiredguy123]

I just took a quick look at brokered CDs and saw that they seem to be creeping down a little this week. There are not as many at the 5% mark.

Is anybody else wondering if the window on the 5% might be closing? The list of those available is definitely a lot shorter than it was a couple of weeks ago.

Boomer
The interest rate on my Vanguard money market account is still increasing. It is now 4.77 percent. That is way better than the 0.01 percent I was getting for several years. And, because about 65 percent of my portfolio is bonds and cash mutual funds, my investment income has greatly increased. I don't see the need to buy CDs.

[manaboutown]

Recently I have been moving cash into SWWXX, an AMT free muni money market fund currently paying 3.79% tax free.

6 month T-Bill today is 4.88% at Schwab.

[Boomer]

The interest rate on my Vanguard money market account is still increasing. It is now 4.77 percent. That is way better than the 0.01 percent I was getting for several years. And, because about 65 percent of my portfolio is bonds and cash mutual funds, my investment income has greatly increased. I don't see the need to buy CDs.

Funny you should say that. I was thinking the same thing — sort off…..

New money just in, sitting in a money market at a 4-plus something rate. Thinking of leaving it alone. Not sure yet though……

I do have a question about those brokered CDs. They are new to me. Bought a couple of short terms a few weeks ago. I get FDIC and call - protected……..

But am I understanding correctly that if the brokered CD does not compound, and instead pays all the interest income at the end of the term, that does not throw all the taxable interest income into 2024 if going out long term? If not, why not? It seems like being taxed on money you did not get — yet. Huh? That makes no sense to me. Maybe I misunderstood.

Am I right or wrong on that? If the taxing is along the way while the interest is not paid yet, how can that be?

Boomer (who is not sure if she heard that right)

[retiredguy123]

Funny you should say that. I was thinking the same thing — sort off…..

New money just in, sitting in a money market at a 4-plus something rate. Thinking of leaving it alone. Not sure yet though……

I do have a question about those brokered CDs. They are new to me. Bought a couple of short terms a few weeks ago. I get FDIC and call - protected……..

But am I understanding correctly that if the brokered CD does not compound, and instead pays all the interest income at the end of the term, that does not throw all the taxable interest income into 2024 if going out long term? If not, why not? It seems like being taxed on money you did not get — yet. Huh? That makes no sense to me. Maybe I misunderstood.

Am I right or wrong on that? If the taxing is along the way while the interest is not paid yet, how can that be?

Boomer (who is not sure if she heard that right)
A typical CD earns taxable interest annually, even if the CD does not pay the interest to the CD owner. So, you get a 1099-int every year and must pay tax on it. It doesn't matter when the interest is actually paid to the owner. This would also apply to a brokered CD.

I think that some banks will allow you to withdraw interest earned at any time without paying a penalty.

[Boomer]

A typical CD earns taxable interest annually, even if the CD does not pay the interest to the CD owner. So, you get a 1099-int every year and must pay tax on it. It doesn't matter when the interest is actually paid to the owner. This would also apply to a brokered CD.

I think that some banks will allow you to withdraw interest earned at any time without paying a penalty.


Thanks. It has been so long since I have had CDs, and I never took interest along the way, but it did appear on statements, as I recall.

I thought these brokered CDs seemed like they paid lump sum interest or some such thing. Still seems weird to me, but thank you for verifying that it just is.

Boomer

[Gigi3000]

The interest rate on my Vanguard money market account is still increasing. It is now 4.77 percent. That is way better than the 0.01 percent I was getting for several years. And, because about 65 percent of my portfolio is bonds and cash mutual funds, my investment income has greatly increased. I don't see the need to buy CDs.

I'm not sure how to figure that .11 expense on the vanguard MM when comparing it to the CDs. But it seems the safest right now and my funds are available. Any idea what the expenses are on Vanguard CDs?

[retiredguy123]

I'm not sure how to figure that .11 expense on the vanguard MM when comparing it to the CDs. But it seems the safest right now and my funds are available. Any idea what the expenses are on Vanguard CDs?
I use the Cash Reserve Federal Money Market Admiral fund. The current yield is 4.78 percent. The expense ratio is 0.1 percent, but that is built into the share price, so the actual yield is 4.78 percent.

For CDs, Vanguard doesn't charge anything for new issues, but there is a $1 fee per $1,000 to purchase a secondary CD (not a new issue). You can now get a 5 percent or higher yield with a Vanguard brokered CD. Vanguard's fees for most products are so low, they are hardly worth computing.

Note, if you want to increase your overall yield a little bit, consider putting about 15 to 20 percent of your savings into the Vanguard High Yield Corporate Bond fund. Somewhat risky, but it is currently yielding 7.02 percent.

[mrf0151]

Synchrony Bank online has a 14 month CD at %5.00 with no minimum. Shop around.

[Gigi3000]

[QUOTE=dewilson58;2196114]If >$41B needed......................it's called printing money.[/QUOTE

Then the inflation rate will be astronomical. Which, doesnt bother me personally much, i love the higher interest rates that come along with it but worry about Generation Z.:pepper2:

[Gigi3000]

I use the Cash Reserve Federal Money Market Admiral fund. The current yield is 4.78 percent. The expense ratio is 0.1 percent, but that is built into the share price, so the actual yield is 4.78 percent.

For CDs, Vanguard doesn't charge anything for new issues, but there is a $1 fee per $1,000 to purchase a secondary CD (not a new issue). You can now get a 5 percent or higher yield with a Vanguard brokered CD. Vanguard's fees for most products are so low, they are hardly worth computing.

Note, if you want to increase your overall yield a little bit, consider putting about 15 to 20 percent of your savings into the Vanguard High Yield Corporate Bond fund. Somewhat risky, but it is currently yielding 7.02 percent.

Wooooo...You're a risk taker! 80%ish of Vanguard Corp Bond fund is BBB to B. But i am looking for more risk with a portion of my portfolio.....so i'm mulling over. I'll give my fiduciary a heart attack...lol