Vanguard New Issue Brokered CDs (again)

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dbc47
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Vanguard New Issue Brokered CDs (again)

Post by dbc47 » Mon Jan 22, 2018 3:37 pm

I can't find an answer to this question so maybe someone can enlighten me? I'm looking at a new issue 12 month CD from Safra National Bank at a rate of 1.85%.
But what I don't get is that there seems to be more interest in other banks that are offering 1.80% and less for the same terms, etc. Why would someone want a lower rate for the same term? I would have thought folks would go after the higher rate offering. Maybe Safra's offering hasn't been listed as long as the other ones?

Geologist
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Re: Vanguard New Issue Brokered CDs (again)

Post by Geologist » Mon Jan 22, 2018 3:43 pm

What do you mean by "more interest"?

Some people might choose a bank that is offering lower interest than Safra because they already have CDs from Safra and have reached the FDIC limit. There may be some states in which Safra is not offering its CDs.

TBillT
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Re: Vanguard New Issue Brokered CDs (again)

Post by TBillT » Mon Jan 22, 2018 3:47 pm

I have used my Fidelity account for these types of CD's.
How do you know what the demand is?
Anyways if you are considering selling before maturity, you could want a large offering for marketability.
Also need to look at monthly vs. semi payments.
I see Wells Fargo at 1.9% and a huge offering with monthly payments, or 2% out a few more months, so I'd be in that, but I see Safra.
I guess they are Call Protected but that is another consideration.

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dm200
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Re: Vanguard New Issue Brokered CDs (again)

Post by dm200 » Mon Jan 22, 2018 4:01 pm

dbc47 wrote:
Mon Jan 22, 2018 3:37 pm
I can't find an answer to this question so maybe someone can enlighten me? I'm looking at a new issue 12 month CD from Safra National Bank at a rate of 1.85%.
But what I don't get is that there seems to be more interest in other banks that are offering 1.80% and less for the same terms, etc. Why would someone want a lower rate for the same term? I would have thought folks would go after the higher rate offering. Maybe Safra's offering hasn't been listed as long as the other ones?
Yes - just purchased (for an organization I manage part time) a 12 month 1.85% Vanguard new issue brokered CD Bank of the West San Francisco.

I assume you are asking about the others you see there for lower rates of the same term/maturity. My belief/assumptions:
1. Some folks may had reached the FDIC limit and want to stay within the FDIC limits.
2. These others may have been there before and the 1.85% just was added
3. If/when the 1.85% are sole first, the 1.80% may remain.

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dbc47
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Re: Vanguard New Issue Brokered CDs (again)

Post by dbc47 » Mon Jan 22, 2018 7:18 pm

dm200 wrote:
Mon Jan 22, 2018 4:01 pm
dbc47 wrote:
Mon Jan 22, 2018 3:37 pm
I can't find an answer to this question so maybe someone can enlighten me? I'm looking at a new issue 12 month CD from Safra National Bank at a rate of 1.85%.
But what I don't get is that there seems to be more interest in other banks that are offering 1.80% and less for the same terms, etc. Why would someone want a lower rate for the same term? I would have thought folks would go after the higher rate offering. Maybe Safra's offering hasn't been listed as long as the other ones?
Yes - just purchased (for an organization I manage part time) a 12 month 1.85% Vanguard new issue brokered CD Bank of the West San Francisco.

I assume you are asking about the others you see there for lower rates of the same term/maturity. My belief/assumptions:
1. Some folks may had reached the FDIC limit and want to stay within the FDIC limits.
2. These others may have been there before and the 1.85% just was added
3. If/when the 1.85% are sole first, the 1.80% may remain.

Thank you! That's what I was figuring but wasn't sure if I was missing something or not. Again, thanks.

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dm200
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Re: Vanguard New Issue Brokered CDs (again)

Post by dm200 » Mon Jan 22, 2018 9:17 pm

Regarding the FDIC limit -

While persons/families have several ways to multiply the $250k FDIC (or NCUA) federal insurance, organizations do not.

So, for example, the organization I manage (part time) must stay under the $250k per bank - so we occasionally cannot buy the highest rate CD available because that issue is from a bank where we are at the $250,000 limit.

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