CD vs MM at current rates

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teddytimtam
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CD vs MM at current rates

Post by teddytimtam » Wed Mar 13, 2019 4:37 pm

Capital One is offering 1 year CD's at 2.7%. Vanguard Prime MM is at 2.45%.

Difference is $35 for every $10,000.

Is the flexibility of a MM/access to cash worth losing out on $35/$10000/year?

stan1
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Re: CD vs MM at current rates

Post by stan1 » Wed Mar 13, 2019 4:42 pm

teddytimtam wrote:
Wed Mar 13, 2019 4:37 pm
Capital One is offering 1 year CD's at 2.7%. Vanguard Prime MM is at 2.45%.

Difference is $35 for every $10,000.

Is the flexibility of a MM/access to cash worth losing out on $35/$10000/year?
Also to consider:
CD rate is locked for a year. Prime MMF rate will fluctuate.
CD is FDIC insured. Vanguard MMF is very unlikely to break the buck.

I wouldn't sweat the details over which to pick and certainly wouldn't open a new account at Capital One just for this rate if you don't already have an account there.

Amphian
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Re: CD vs MM at current rates

Post by Amphian » Wed Mar 13, 2019 4:44 pm

If you decide it is, Synchrony is offering 2.8 % on a 1 year. That's the best I've seen recently.

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smarcus3
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Re: CD vs MM at current rates

Post by smarcus3 » Wed Mar 13, 2019 7:37 pm

If you need access to the funds in an emergency locking it away is not an option. You could get some additional yield with treasuries which you could liquidate as needed.
This is my personal opinion. I'm an engineer not a financial advisor.

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cheese_breath
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Re: CD vs MM at current rates

Post by cheese_breath » Wed Mar 13, 2019 8:15 pm

Amphian wrote:
Wed Mar 13, 2019 4:44 pm
If you decide it is, Synchrony is offering 2.8 % on a 1 year. That's the best I've seen recently.
Ally one year high yield is 2.75%.

Almost as good, but no cigar.
The surest way to know the future is when it becomes the past.

sksbog
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Re: CD vs MM at current rates

Post by sksbog » Wed Mar 13, 2019 8:21 pm

Divide by 2 and use both. Cheers! :D

feh
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Re: CD vs MM at current rates

Post by feh » Thu Mar 14, 2019 11:40 am

teddytimtam wrote:
Wed Mar 13, 2019 4:37 pm
Capital One is offering 1 year CD's at 2.7%. Vanguard Prime MM is at 2.45%.

Difference is $35 for every $10,000.

Is the flexibility of a MM/access to cash worth losing out on $35/$10000/year?
We've had 2 CDs mature the last 6 months; I didn't use the proceeds to buy a new CD in either case. The difference between short-term bonds/MM and CDs is not worth locking up the money at the moment, IMO.

HomeStretch
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Re: CD vs MM at current rates

Post by HomeStretch » Thu Mar 14, 2019 12:10 pm

Vanguard Treasury MM fund VUSXX has a 7-day SEC yield of 2.35% (compound 2.38%). Due to state taxes, that equates to a 2.75% yield for me. $50k initial investment but you don’t need to maintain that balance.

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Ricchan
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Re: CD vs MM at current rates

Post by Ricchan » Thu Mar 14, 2019 12:32 pm

Live Oak and a few others have 1yr 2.85% CDs.

FWIW, Prime MM's 7-day SEC yield has fallen off from 2.48% on Feb 4 to 2.45% today.

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