jeffyscott wrote: ↑
Apparently Vanguard, in addition to hiding the commission until later in the process, has no option to see only CDs you can buy?
Don't understand this comment. My search results at Vanguard show only CDs I can buy. If there are multiple offers, it shows the one with the highest yield, but that may be for a quantity or minimum quantity that you are not interested in. If there are additional offers, there will be a "Show more" link.
I'll walk though an example. Say I'm looking for a 2-year CD. Once at the "Find bonds and CDs" screen, I click on the 2.80% link in the New issue CDs row (top row), under the 2 year term to maturity heading. This shows me all the 2-year new issue CDs I can buy. Only one is 2.80%, from Wells Fargo, with the rest at 2.75% or less. I wouldn't consider the lower-yielding CDs, unless perhaps I was maxed out on FDIC insurance at Wells Fargo.
I see that there are 4,950 available from WF at 2.80%, with a minimum quantity of 10. For new-issue CDs, there are no bids, so there are just dashes where you would see the bid quantity, price, and yield, and the Sell link is not active (you see Sell, but it is not a link you can click on, unlike the Buy links, which you can click on).
Now I want to expand my search to secondary CDs, so I click the "Edit search criteria" link near the top left above the search results. I see that New issue already is checked, but now I also check Secondary. Since I'm not interested in anything less than 2.80%, I enter 2.80 in the left Yield box (this is the minimum yield). I leave everything else as is. It's worthwhile to look at the other search criteria settings, for example Callable is set to No, as are Zero coupon and Stepped coupon. I could change these if I wanted, but typically I don't. Note that the default sort is Ask yield, descending, which of course you could change, but I leave it when searching this way, since I want to see the highest yields at the top. Now I click Search.
For each CD, we are interested in the second row, since these are the Ask values, which are what are relevant when we want to buy. We see the Buy link at the far left of this second row.
For the top-yielding CD I see, there is only 1 available (with minimum quantity 1, of course), with a yield of 2.861. I guess that this will have a net yield of about 2.76%, since the commission for this account is 0.2%, which amortized over two years is about 0.1% per year. To check, I click the Buy link, then click Buy on the next screen too. This brings me to the Buy order screen. I check the acknowledgement box, enter quantity 1, and click Calculate. I then see the Yield to maturity is 2.759, so close to what I expected. I would not buy this CD in this account, because I can get 2.80% on the new issue. So I click Cancel, and return to the search results screen.
However, in an account with only 0.1% commission, this CD probably would provide a net yield of about 2.81%, because only 0.1% is allocated over two years, or 0.05%/year. But I probably wouldn't bother with this CD because quantity 1 is too small for me to bother with.
Back to the search results screen, I see in the first row, the bid row, that for this CD, if you already owned it, you could sell up to 250 with minimum quantity 1 for a yield of 3.251 before commission. Looking at the prices before commission, you could sell it for 98.139, or buy it for 98.896, which is a spread of 76 basis points before commission (pretty typical from what I've seen). Of course you add 0.1 or 0.2 to the ask price and subtract 0.1 or 0.2 from the bid price to account for commissions, adding 20-40 basis points to the bid/ask spread after commissions.
There are no more offers for this CD, so there is no "Show more" link. However, for the second CD in the list there is. The CD in the search results screen shows Buy (ask) quantity of 20, minimum 1, with ask yield of 2.857%. I click "Show more" to see the other offers. I only look at the right side, the Ask side, since I am buying, not selling. The first one shown is the one that was in the search results screen, so 20(1) at 2.857%. The second one is 14 (min 10) at 2.698%. I don't know why anyone would buy the lower yielding one, since the available quantity is smaller and the minimum quantity is higher, but there's an active Buy link next to it for someone who might want to.
(When I started writing the paragraph above, there were 40 available at the high yield, so someone bought 20 while I was writing).
Again, ignore all the stuff on the left, which is the Bid side, which are offers to buy this CD if you already owned it. Of course the bid prices are lower and bid yields are higher--that's how the CD dealers make their money. Of course you will not see these prices or yields if you click one of the Buy links on the Ask side.
It is possible that the CD you want to buy gets bought between the time you see it in the search results screen and the time you fill in your Buy order screen and click Submit. In this case your order won't be filled, and at some point will be cancelled. This has happened to me several times--the really good deals on smaller quantities go very quickly.
Hope this helps.