Buying CDs from Vanguard

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Jesteroftheswamp
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Buying CDs from Vanguard

Post by Jesteroftheswamp » Tue Jul 03, 2018 11:44 am

I am looking into buying CD's from Vanguard since they are returning a good bit more than my money market account. I went to the Vanguard CDs site and it's all over the place, I have no idea where to start. Can anyone tell me how to simply buy a CD?

invstar
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Re: Buying CDs from Vanguard

Post by invstar » Tue Jul 03, 2018 11:48 am

See this: https://youtu.be/IcXPgQ7qeio

You can sort the CDs listing by Yield to Maturity/Worst and then buy.You buy in 1000 units (i.e., 10 units is equal to $10,000).
I think Vanguard's commission is $2.

sport
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Re: Buying CDs from Vanguard

Post by sport » Tue Jul 03, 2018 2:54 pm

At the top of the home page, there is a menu "investing". On that menu, click on "CDs and Bonds". On the page that comes up, click on "Find CDs and Bonds". Then, click on the column with the CD maturity you want. Go from there.

sport
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Re: Buying CDs from Vanguard

Post by sport » Tue Jul 03, 2018 2:57 pm

invstar wrote:
Tue Jul 03, 2018 11:48 am
See this: https://youtu.be/IcXPgQ7qeio

You can sort the CDs listing by Yield to Maturity/Worst and then buy.You buy in 1000 units (i.e., 10 units is equal to $10,000).
I think Vanguard's commission is $2.
There is no commission on new issues.

venkman
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Re: Buying CDs from Vanguard

Post by venkman » Tue Jul 03, 2018 10:50 pm

Note that Vanguard has a $10k minimum for each new-issue CD you purchase. You may be able to find secondary CD's that have a lower minimum.

Caboose
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Re: Buying CDs from Vanguard

Post by Caboose » Wed Jul 04, 2018 6:56 am

Excellent idea - and very easy to do! I have been purchasing CDs from Vanguard for years - great rates and service, and if you have questions/don't understand the mechanics of the process, call their help line and look at the web page https://investor.vanguard.com/cd-bond/

mouses
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Re: Buying CDs from Vanguard

Post by mouses » Wed Jul 04, 2018 7:56 am

sport wrote:
Tue Jul 03, 2018 2:54 pm
At the top of the home page, there is a menu "investing". On that menu, click on "CDs and Bonds". On the page that comes up, click on "Find CDs and Bonds". Then, click on the column with the CD maturity you want. Go from there.
+1

Also, I like monthly interest payments, so that my assets don't have lumps in them :-) This means I sometimes get a hair's less interest than the semiannual or annual interest ones. Although, and I have not crunched numbers, it may not be that different since the paid interest earns interest. Schwab puts the payment frequency on the page where all the CDs of a certain maturity are listed. With Vanguard you have to click on each one and then back up to find the interest frequency.

The first time I bought a CD at Vanguard, the phone person walked me through it, as it is a little confusing in terms of the amount bought. But if you watch carefully, it tells you the amount you are about to spend before you commit.

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Jesteroftheswamp
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Re: Buying CDs from Vanguard

Post by Jesteroftheswamp » Wed Jul 11, 2018 6:17 pm

venkman wrote:
Tue Jul 03, 2018 10:50 pm
Note that Vanguard has a $10k minimum for each new-issue CD you purchase. You may be able to find secondary CD's that have a lower minimum.
How do I know if I’m getting a good deal?

averagedude
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Re: Buying CDs from Vanguard

Post by averagedude » Wed Jul 11, 2018 6:23 pm

Go to their investing page, go to find cds and bonds and then call Vanguard. They will walk you through the process if your computer skills are limited like me. Believe me, it is simple. Me personally, i try not to call them because i know that a phone call to them cost me and other investors money. The hardest part of the process is linking your bank to them, but that is the case if you are going to an online bank to get the best returns on your savings.

venkman
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Re: Buying CDs from Vanguard

Post by venkman » Wed Jul 11, 2018 10:55 pm

Jesteroftheswamp wrote:
Wed Jul 11, 2018 6:17 pm
venkman wrote:
Tue Jul 03, 2018 10:50 pm
Note that Vanguard has a $10k minimum for each new-issue CD you purchase. You may be able to find secondary CD's that have a lower minimum.
How do I know if I’m getting a good deal?
For secondary CD's, It will list the yield to maturity you'd get. Just make sure that number is at least slightly higher than a new issue CD of the same maturity. Vanguard charges a small ($2 per $1000 face value, I think) commission on secondary CD's, so make sure the higher yield will compensate for that.

Also note that coupon rates can vary on secondary CD's. You'll get the advertised yield, but you may get it from only paying 95% of the face value up front and getting 100% back at maturity, while getting very little interest in the interim.

Dan999
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Re: Buying CDs from Vanguard

Post by Dan999 » Thu Jul 12, 2018 9:53 am

I used to buy CD's by phone and got an execution within a few hours.
I bought on line and now it takes sometimes a few days.
I called and checked into this and they said it depends on the issue date, so not to worry.
And they are executing over a few days as they said. Just not used to this method. They said it changed a while back.
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dm200
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Re: Buying CDs from Vanguard

Post by dm200 » Thu Jul 12, 2018 10:21 am

Dan999 wrote:
Thu Jul 12, 2018 9:53 am
I used to buy CD's by phone and got an execution within a few hours.
I bought on line and now it takes sometimes a few days.
I called and checked into this and they said it depends on the issue date, so not to worry.
And they are executing over a few days as they said. Just not used to this method. They said it changed a while back.
Dan999
Yes - it did change a while ago. I see no problem at all - the order is there and I always see them exected. It is actually beneficial because funds in the settlement account are not tied up.

mouses
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Re: Buying CDs from Vanguard

Post by mouses » Thu Jul 12, 2018 10:39 am

dm200 wrote:
Thu Jul 12, 2018 10:21 am
Dan999 wrote:
Thu Jul 12, 2018 9:53 am
I used to buy CD's by phone and got an execution within a few hours.
I bought on line and now it takes sometimes a few days.
I called and checked into this and they said it depends on the issue date, so not to worry.
And they are executing over a few days as they said. Just not used to this method. They said it changed a while back.
Dan999
Yes - it did change a while ago. I see no problem at all - the order is there and I always see them exected. It is actually beneficial because funds in the settlement account are not tied up.
I noticed this and it is a bit odd to sometimes wait several days, but you can tell that from the info for the CD. I am not sure why this process is followed? I am also not sure why one cares that the funds in the settlement account are not tied up, if I understand what you are saying, as they are going to be spent on the CDs in a few days anyway.

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dm200
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Re: Buying CDs from Vanguard

Post by dm200 » Thu Jul 12, 2018 11:12 am

I noticed this and it is a bit odd to sometimes wait several days, but you can tell that from the info for the CD. I am not sure why this process is followed? I am also not sure why one cares that the funds in the settlement account are not tied up, if I understand what you are saying, as they are going to be spent on the CDs in a few days anyway.
Here is the situation - say $1,000 in settlement fund and you purchase a $50,000 CD a week into the future and intend to fund the purchase with a maturing CD on the day of the purchase. If the order is processed right away, the $1,000 is held - but if the order is not processed for a few days - I can withdraw the $1,000.

mouses
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Re: Buying CDs from Vanguard

Post by mouses » Thu Jul 12, 2018 11:30 am

dm200 wrote:
Thu Jul 12, 2018 11:12 am
I noticed this and it is a bit odd to sometimes wait several days, but you can tell that from the info for the CD. I am not sure why this process is followed? I am also not sure why one cares that the funds in the settlement account are not tied up, if I understand what you are saying, as they are going to be spent on the CDs in a few days anyway.
Here is the situation - say $1,000 in settlement fund and you purchase a $50,000 CD a week into the future and intend to fund the purchase with a maturing CD on the day of the purchase. If the order is processed right away, the $1,000 is held - but if the order is not processed for a few days - I can withdraw the $1,000.
Thanks. But why is it the purchases don't happen immediately?

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Re: Buying CDs from Vanguard

Post by sport » Thu Jul 12, 2018 11:39 am

mouses wrote:
Thu Jul 12, 2018 11:30 am
dm200 wrote:
Thu Jul 12, 2018 11:12 am
I noticed this and it is a bit odd to sometimes wait several days, but you can tell that from the info for the CD. I am not sure why this process is followed? I am also not sure why one cares that the funds in the settlement account are not tied up, if I understand what you are saying, as they are going to be spent on the CDs in a few days anyway.
Here is the situation - say $1,000 in settlement fund and you purchase a $50,000 CD a week into the future and intend to fund the purchase with a maturing CD on the day of the purchase. If the order is processed right away, the $1,000 is held - but if the order is not processed for a few days - I can withdraw the $1,000.
Thanks. But why is it the purchases don't happen immediately?
Perhaps this lets Vanguard collect all the purchases and process them all at once. This could be more efficient than processing each purchase separately as they come in.

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dm200
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Re: Buying CDs from Vanguard

Post by dm200 » Thu Jul 12, 2018 12:01 pm

mouses wrote:
Thu Jul 12, 2018 11:30 am
dm200 wrote:
Thu Jul 12, 2018 11:12 am
I noticed this and it is a bit odd to sometimes wait several days, but you can tell that from the info for the CD. I am not sure why this process is followed? I am also not sure why one cares that the funds in the settlement account are not tied up, if I understand what you are saying, as they are going to be spent on the CDs in a few days anyway.
Here is the situation - say $1,000 in settlement fund and you purchase a $50,000 CD a week into the future and intend to fund the purchase with a maturing CD on the day of the purchase. If the order is processed right away, the $1,000 is held - but if the order is not processed for a few days - I can withdraw the $1,000.
Thanks. But why is it the purchases don't happen immediately?
No clue - this change (delay) has no negative impact (that I can see) on the purchaser - and a benefit (as above) to some.

sport
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Re: Buying CDs from Vanguard

Post by sport » Thu Jul 12, 2018 12:25 pm

Wouldn't the delay give the CD buyer an opportunity to cancel the purchase if a better CD became available during the delay?

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dm200
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Re: Buying CDs from Vanguard

Post by dm200 » Thu Jul 12, 2018 12:43 pm

sport wrote:
Thu Jul 12, 2018 12:25 pm
Wouldn't the delay give the CD buyer an opportunity to cancel the purchase if a better CD became available during the delay?
I don't think so (never tried it). I believe such orders cannot be cancelled -

Dan999
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Re: Buying CDs from Vanguard

Post by Dan999 » Thu Jul 12, 2018 1:17 pm

Yes, you can cancel.
I doubled up an online order and I called them and while I was on the phone, they canceled it.
Could not do it online though,
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munemaker
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Re: Buying CDs from Vanguard

Post by munemaker » Thu Jul 12, 2018 3:32 pm

dm200 wrote:
Thu Jul 12, 2018 12:01 pm
mouses wrote:
Thu Jul 12, 2018 11:30 am
But why is it the purchases don't happen immediately?
No clue - this change (delay) has no negative impact (that I can see) on the purchaser - and a benefit (as above) to some.
I am fairly new at the brokered CD game, having bought 4 different, new-issue CDs through Vanguard in the past few months. It seems that these brokered CDs have an issue date attached to them. You can place your order whenever you like but the order does not execute until the issue date.

This is in contrast to a CD you purchase at your local bank where they open the CD whatever day/time you request.

Also, I would normally prefer CDs that pay interest monthly. However, in minimizing my taxable income to maximize ObamaCare subsidy, I find I can buy CDs this year and the interest is paid next year; unusual situation but it is a plus in this case.

DaleMcMillen
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Re: Buying CDs from Vanguard

Post by DaleMcMillen » Mon Dec 24, 2018 1:49 pm

Are the CDs brought from Vanguard Federally insured like those you get at an FDIC bank?

pleeson
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Re: Buying CDs from Vanguard

Post by pleeson » Mon Dec 24, 2018 2:25 pm

Yes, per VG website:

All CDs offered by Vanguard Brokerage are FDIC-insured up to certain limits.

Up to $250,000 per account owner per institution for depository assets will be insured. Additional information can be found on the FDIC website.
In determining the applicable insurance limits, the FDIC aggregates accounts held at the issuer, including those held through different broker dealers or other intermediaries.
If you purchase a CD at a premium on the secondary market, the amount of the premium is not insured.
All of the CDs offered by Vanguard Brokerage are FDIC-insured. For more information regarding FDIC coverage, please consult fdic.gov.

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Summit111
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Re: Buying CDs from Vanguard

Post by Summit111 » Mon Dec 24, 2018 2:30 pm

All the CDs I purchased from Vanguard are FDIC insured, but I verified each on on the FDIC website

Summit

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munemaker
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Re: Buying CDs from Vanguard

Post by munemaker » Mon Dec 24, 2018 5:16 pm

mouses wrote:
Thu Jul 12, 2018 11:30 am

... why is it the purchases don't happen immediately?
I think it is because these CDs have an issue date. The interest starts accumulating on the issue date. Vanguard holds your money in the settlement account until the issue date. You continue to collect interest in the settlement account until the issue date, and then interest accumulates in the CD. That's my understanding.

A CD you buy at a bank is different. The issue date is the date they receive the money.

sport
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Re: Buying CDs from Vanguard

Post by sport » Mon Dec 24, 2018 5:46 pm

munemaker wrote:
Mon Dec 24, 2018 5:16 pm
mouses wrote:
Thu Jul 12, 2018 11:30 am

... why is it the purchases don't happen immediately?
I think it is because these CDs have an issue date. The interest starts accumulating on the issue date. Vanguard holds your money in the settlement account until the issue date. You continue to collect interest in the settlement account until the issue date, and then interest accumulates in the CD. That's my understanding.

A CD you buy at a bank is different. The issue date is the date they receive the money.
In my experience, the money comes out of the settlement fund a few days before the CD begins to accrue interest. So, I believe there are a few days where you do not earn anything.

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munemaker
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Re: Buying CDs from Vanguard

Post by munemaker » Mon Dec 24, 2018 6:54 pm

sport wrote:
Mon Dec 24, 2018 5:46 pm
munemaker wrote:
Mon Dec 24, 2018 5:16 pm
mouses wrote:
Thu Jul 12, 2018 11:30 am

... why is it the purchases don't happen immediately?
I think it is because these CDs have an issue date. The interest starts accumulating on the issue date. Vanguard holds your money in the settlement account until the issue date. You continue to collect interest in the settlement account until the issue date, and then interest accumulates in the CD. That's my understanding.

A CD you buy at a bank is different. The issue date is the date they receive the money.
In my experience, the money comes out of the settlement fund a few days before the CD begins to accrue interest. So, I believe there are a few days where you do not earn anything.
I am sure you are correct on that. I have only bought a few and don't watch that closely.

rasta
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Re: Buying CDs from Vanguard

Post by rasta » Mon Dec 24, 2018 8:55 pm

any cd you buy at vanguard will have a settlement date, that is the day those funds will no longer be in your settlement account balance, until then
you will earn interest on those funds in your settlement account. money isn't coming out of your account a few days before that date.

sport
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Re: Buying CDs from Vanguard

Post by sport » Mon Dec 24, 2018 9:04 pm

rasta wrote:
Mon Dec 24, 2018 8:55 pm
any cd you buy at vanguard will have a settlement date, that is the day those funds will no longer be in your settlement account balance, until then
you will earn interest on those funds in your settlement account. money isn't coming out of your account a few days before that date.
Well, I just bought an original issue CD at Vanguard. The "trade date" was 12/21. The settlement date is 12/26. The money came out of my settlement fund on 12/21.

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Re: Buying CDs from Vanguard

Post by rasta » Mon Dec 24, 2018 9:19 pm

Unlikey.

Your AVAILABLE balance may be lower by your cd purchase, but those funds are still in your settlement fund until the settlement date.

sport
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Re: Buying CDs from Vanguard

Post by sport » Mon Dec 24, 2018 10:13 pm

rasta wrote:
Mon Dec 24, 2018 9:19 pm
Unlikey.

Your AVAILABLE balance may be lower by your cd purchase, but those funds are still in your settlement fund until the settlement date.
I certainly hope you are correct. The balance shown does not reflect that. In any case, a few days interest is not anything I would get excited about.

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