Anybody else remember there being 5 year CDs at 5+% years ago? I could have sworn I saw those advertised back in the late 90’s - early 00’s. I didn’t get one because stocks were all the rage.
Nowadays, banks won’t offer 5% for more than 18 months or so. It seems like they’re expecting interest rates to come back down in the next couple of years.
Yeah I’ve seen projections for 100-200 basis point rate cuts in the next 12 months. I don’t know if I would expect more than 75 or so but anyway. Rates should go down.
Agreed. I think they’re going to hold longer than people expect. No point in burning all your ammo to fight a real recession. But I’m just a layperson.
Brokerages have them, but they’re not call protected. I am seeing 3-year call protected CDs going for 4.6% or so, so I think banks are thinking rates will stay high about that long.
Good observation. I’m happy with my money market accts(~5%). But I figure banks have access to a lot more info than we do, so I look at CD rates as an indicator.
As far as actually investing in one, I had a CD back in the 90’s and didn’t like it. It’s just not my thing. I’m a stock guy.
Same. I’ve only had one CD, and that was a no penalty CD to hold onto some cash for someone.
I pay state income tax, and t-bill rates are almost always better than CD rates (at least recently) after accounting for state tax rates. So I buy t-bills on autoroll in my brokerage (which is my main bank) with most of my cash, and the rest sits in a money market fund.
I haven’t seen much point, but rates are currently pretty good and I’d probably get them if I didn’t have state income tax.
Anybody else remember there being 5 year CDs at 5+% years ago? I could have sworn I saw those advertised back in the late 90’s - early 00’s. I didn’t get one because stocks were all the rage.
Nowadays, banks won’t offer 5% for more than 18 months or so. It seems like they’re expecting interest rates to come back down in the next couple of years.
Yeah I’ve seen projections for 100-200 basis point rate cuts in the next 12 months. I don’t know if I would expect more than 75 or so but anyway. Rates should go down.
I’m thinking something along those lines. It could be another 5-6 months before inflation cools down to where the Fed is happy.
Agreed. I think they’re going to hold longer than people expect. No point in burning all your ammo to fight a real recession. But I’m just a layperson.
I just got one for 23 months at 5.3%.
But yeah, it’s definitely weird seeing shorter term CDs with higher rate than long term, since my whole life longer term was higher interest.
Brokerages have them, but they’re not call protected. I am seeing 3-year call protected CDs going for 4.6% or so, so I think banks are thinking rates will stay high about that long.
Good observation. I’m happy with my money market accts(~5%). But I figure banks have access to a lot more info than we do, so I look at CD rates as an indicator.
As far as actually investing in one, I had a CD back in the 90’s and didn’t like it. It’s just not my thing. I’m a stock guy.
Same. I’ve only had one CD, and that was a no penalty CD to hold onto some cash for someone.
I pay state income tax, and t-bill rates are almost always better than CD rates (at least recently) after accounting for state tax rates. So I buy t-bills on autoroll in my brokerage (which is my main bank) with most of my cash, and the rest sits in a money market fund.
I haven’t seen much point, but rates are currently pretty good and I’d probably get them if I didn’t have state income tax.