CD Rates
 

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.

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:

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

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.

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.

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.

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

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

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?

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

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

Get better rates on Treasuries. Check your broker

Fidelty

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.

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

CD's vs Treasury bills
 

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.

Fidelity money market paying 3.06 on cash balances.

All current CD and Treasury rates at this link

Rates

https://home.treasury.gov/system/fil...n-Schedule.pdf

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".

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 ?

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

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

Brokered CD
 

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.

Brokered CD
 

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

Early withdrawal fees
 

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!

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.depositaccounts.com/

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%

Fidelity CD rate
 

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.

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:

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.

Are things ever going to get back to normal?

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

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).

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

You are very informed. Thank you.

CD rates
 

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

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!