CD's-Anyone Locking in Before Feds Meet Next Week?

[barkley]

so just curious if anyone else is eyeing current cd rates and considering locking one or more in before the feds make a decision on interest rates next week. i've been looking around and while there are no 'great' rates out there my credit union has some that allow for additional deposits (at the same rate you initialy lock in at) that i'm considering snagging at the minimum entry level just so i've got something with a somewhat decent rate if nothing better is available when my existing reach maturity.

anyone else researching this?

 

[georgina]

so just curious if anyone else is eyeing current cd rates and considering locking one or more in before the feds make a decision on interest rates next week. i've been looking around and while there are no 'great' rates out there my credit union has some that allow for additional deposits (at the same rate you initialy lock in at) that i'm considering snagging at the minimum entry level just so i've got something with a somewhat decent rate if nothing better is available when my existing reach maturity.

anyone else researching this?

No, I prefer my cash to be more liquid. Last time I had a CD our car died and I needed the money for a new one. I did find out that penalties for early withdrawal are tax deductible though!

 

[PrincessGidget]

Yes, my bank has a 3 month CD with 4.75%. I figure 3 months is not a terribly long commitment but should help me ride out the election and any changes the fed makes.

 

[barkley]

Yes, my bank has a 3 month CD with 4.75%. I figure 3 months is not a terribly long commitment but should help me ride out the election and any changes the fed makes.

my credit union has a 4.07% you can do for anywhere between 12 and 24 months. since i've got some others that will hit maturity during the time period that covers with the additional deposit feature i could at least park those there if rates are not as good.

I did find out that penalties for early withdrawal are tax deductible though!

it's something to consider if a much better rate on a cd comes around (we did it once and between the difference in interest and the write-off ended up ahead within a few months).

 

[cvjw]

No. We keep our spare cash in short term treasuries and stocks that pay high dividends.

 

[firefly_ris]

I don't have our own money in CDs, but I'm almost at the end of a 6 month 5% CD that I did for each kid with their previously earning nothing savings accounts. Our stuff is money market and HYSA right now but worth looking into.

 

[Anthony1971]

It is more likely that not at most banks already priced in. CD rates already dropped over the months but very high 4s are still around for 9-13 months. I still have a few at 5.15.

 

[rockawaybeachgirl]

From what I see, the difference between a shorter-term CD and a HYSA right now is negligible and not worth 'locking up' the cash. My discover HYSA is currently at 4.11% and they are quoting a 6 month CD at 4.10%. Now, granted, the rate on the HYSA will drop if there's a cut, but it's just not worth the risk and hassle for me.

 

[bluezy]

We have some of our "extra" money (not money that we would need to access immediately for an unexpected expense) in 4 CDs with staggered renewal dates. They're all between 5.00-5.25%. One of the CDs is due at the end of September. We'll see what the rates are at that time and decide what to do with that money. We did make sure to set it up so that it doesn't automatically renew at the current rate at that time.

 

[tvguy]

My mom did that about 1980. But that was when CDs were paying 16%. Not sure it is worth it with current rates. I think I would put my money elsewhere.
And rates aren't historically high anyway. The mortgages of 2ish% were the low extreme, and of 16ish% were the high extreme. Rates in between those two extremes, which is above where they are now, are what folks realistically should expect.

 

[havaneselover]

Why do people use CDs when T-bills generally have higher yields (and are tax free at the state level)?

 

[_19disnA]

Unless you have CD's maturing soon, I don't think it makes any difference. Certainly not wasting my time following the daily speculation regarding what the FED will/won't do regarding interest rates. If you have some excess cash in some bank account, you probably should have already put it into one of the readily available CD's/Bills/Bonds/etc. Everyone's situation is different. How much money are we talking about as available to invest, how soon might you need it for other expenses/etc.?

That Treasury direct website usually has better rates then other institutions and you can deposit directly online with no 3rd party involvement. Maturity dates range from 4 wks to 30 years so there are a HUGE number of options to choose from.

 

[smwisc]

so just curious if anyone else is eyeing current cd rates and considering locking one or more in before the feds make a decision on interest rates next week. i've been looking around and while there are no 'great' rates out there my credit union has some that allow for additional deposits (at the same rate you initialy lock in at) that i'm considering snagging at the minimum entry level just so i've got something with a somewhat decent rate if nothing better is available when my existing reach maturity.

anyone else researching this?

I'm tempted, but I've spent the past couple years aggressively pushing cash into a CD ladder (maturity dates from next month through Feb 2029, with APYs ranging from 4 to 5.25), so I don't think I should tie up any more at this point - this is both my true emergency fund and the money used for lumpy expenses (car purchases, major appliances or house repairs). Plus the long-term ones aren't earning as much anymore (below 4%), and my HYSA is still at 4.25%, so even if rates fall soon a shorter-term CD just isn't going to be that much more interest over its term.

 

[smwisc]

Why do people use CDs when T-bills generally have higher yields (and are tax free at the state level)?

I think it's mostly knowledge, or lack thereof. I know I've only recently become aware of Treasuries as an option, and I still wouldn't say I understand them as well as CDs. If I were starting over I'd probably build a treasury ladder instead of a CD ladder.

 

[NYCgrrl]

Why do people use CDs when T-bills generally have higher yields (and are tax free at the state level)?

Depends on whether you are looking for short (up to 5 years) or long term (5 years or more) returns. Both are good investment products depending on your need.

 

[AnnaS]

I have and always have multiple CDs in different banks. They all mature at different times also. Sometimes I will lock in a longer term even though rate is a drop lower than the short term better rate. I don't have to worry/think about it changing within 5-7 months. It all depends.

Of course, I have liquid money in case of emergency - just had a new roof/gutters put in a few weeks ago. Can't lock it all up.

 

[Eastern]

We did make sure to set it up so that it doesn't automatically renew at the current rate at that time.

Even if it auto-renews you have your grace period during which you can change it again.

 

[Eastern]

No, I prefer my cash to be more liquid. Last time I had a CD our car died and I needed the money for a new one. I did find out that penalties for early withdrawal are tax deductible though!

I broke several CDs during the run up in interest rates. The first one, I simply accepted that I would pay a penalty.

The next two, I asked if they could waive the penalty; I didn't even give a reason. Both banks agreed without a problem.

It's not guaranteed, but I would always ask. (especially if you have any kind of hardship story)

 

[Eastern]

Why do people use CDs when T-bills generally have higher yields (and are tax free at the state level)?

Some people may not have a Treasury Direct account? Some people may not have a brokerage account? My relative does nothing online and will only open a CD at a local bank. Everyone's financial journey is different.

 

[Willows909]

Yes, my bank has a 3 month CD with 4.75%. I figure 3 months is not a terribly long commitment but should help me ride out the election and any changes the fed makes.

That's a good rate. Ours just matured and it was a 6 month 5.00%. Our credit union is offering 4.75% for 6 months. We'll probably grab that one.