Best CD rates thread

[jeffyscott]

I am thinking of using the once a year 60 day rollover process to lock in a 2% CD, if necessary. So for a 60 day rollover, the path of the money does not matter, does it? Could I, for example, transfer mutual fund shares from an IRA brokerage account to a taxable brokerage account and then use a checking account to deposit an amount equal to the value of the mutual fund shares into an IRA as a 60 day rollover?

I have a (sort of) local bank with a 2% rate (requires an in-person visit to open), I do have a direct transfer in process but am a little worried about how long it is taking. This 18 month CD has a variable rate but a 2% minimum floor and allows additions. The rep there says she has heard nothing about a change to this floor, but there is no guarantee until the money arrives. So I thought, if I had to I could take as little as $500 from the existing IRA as a normal withdrawal and then roll it into the new IRA the same day to lock in the 2% floor. And then when the larger amount arrives it would just be added to the existing CD.

Be careful. It does matter what is rolled out compared to what is rolled back in within 60 days. There is a "same property" rule for 60 day rollovers, that requires just that: if you want to roll over within 60 days, it must be the same property that was distributed. So if you distribute 100 shares of xyz fund worth $5,000 at the time, then you have to roll-in 100 shares of xyz fund (regardless of the value) within 60 days. You can't roll-in $5,000 cash.

So in your case you'll want to distribute cash from the brokerage IRA (to whatever account) and then you can roll-in cash to fund the CD (from whatever account).

Thanks for that. Since I only have mutual funds, I had thought I could save a day by transfer of the shares and then sell in taxable. I'll have to sell first, instead.

[othermike27]

Many thanks to those, especially the regular posters, who keep this thread going.

I have to deploy the proceeds of a house sale and I choose to use CDs for this purpose. But I have run into an irritating snag in actually carrying this out. Alliant CU still restricts a savings account to 6 transfers out per month and it imposes a daily limit of $25,000 on ACH transfers. Normally, I don't bump up against either of these limits, but if I wanted to fund a one-year 0.95% CD at Navy FCU, that takes a minimum of $100K to get the 0.95 rate, or 4 $25K transfers from Alliant on four successive days! Not happy about that.

So, my question to those with lots of experience managing a CD portfolio or chasing favorable rates: what sort of account do you use for funding? Money market? Good yield checking? Or do you fund from a savings account with less strict limits? Or perhaps you keep your CD action to amounts under whatever caps your account has. I'm curious to know how you address this issue.

Thanks in advance...

[MikeG62]

Many thanks to those, especially the regular posters, who keep this thread going.

I have to deploy the proceeds of a house sale and I choose to use CDs for this purpose. But I have run into an irritating snag in actually carrying this out. Alliant CU still restricts a savings account to 6 transfers out per month and it imposes a daily limit of $25,000 on ACH transfers. Normally, I don't bump up against either of these limits, but if I wanted to fund a one-year 0.95% CD at Navy FCU, that takes a minimum of $100K to get the 0.95 rate, or 4 $25K transfers from Alliant on four successive days! Not happy about that.

So, my question to those with lots of experience managing a CD portfolio or chasing favorable rates: what sort of account do you use for funding? Money market? Good yield checking? Or do you fund from a savings account with less strict limits? Or perhaps you keep your CD action to amounts under whatever caps your account has. I'm curious to know how you address this issue.

Thanks in advance...

I don’t use a sourcing bank with limits that low.

Can you “pull” the funds from Alliant initiating the transfer from the destination bank or CU?

Usually when a bank or CU on one side of the transfer has low limits like this the bank or CU on the other side isn’t as restrictive.

Typically I send money from Ally or Marcus or Fidelity. The latter two offer free wires too.

[nalor511]

Many thanks to those, especially the regular posters, who keep this thread going.

I have to deploy the proceeds of a house sale and I choose to use CDs for this purpose. But I have run into an irritating snag in actually carrying this out. Alliant CU still restricts a savings account to 6 transfers out per month and it imposes a daily limit of $25,000 on ACH transfers. Normally, I don't bump up against either of these limits, but if I wanted to fund a one-year 0.95% CD at Navy FCU, that takes a minimum of $100K to get the 0.95 rate, or 4 $25K transfers from Alliant on four successive days! Not happy about that.

So, my question to those with lots of experience managing a CD portfolio or chasing favorable rates: what sort of account do you use for funding? Money market? Good yield checking? Or do you fund from a savings account with less strict limits? Or perhaps you keep your CD action to amounts under whatever caps your account has. I'm curious to know how you address this issue.

Thanks in advance...

Do you have another CU near you that does shared Branch services with Alliant? You can do a $500k transfer between CUs instantly using shared branch

[indexfundfan]

Open a Alliant checking account. Do a one time internal transfer from savings to checking. There are no transaction limitations on the checking account. You do get only the lower interest from the checking account for the few days.

[othermike27]

Open a Alliant checking account.

I'm happy with Alliant in every other respect, so this is probably the best solution for me. I have an open checking account there, and I'll just need to make sure any external links are set up with checking and not the savings account. It's easy enough and quick to transfer between two accounts at the same institution. Thanks!

Edit: only a partial solution, since the $25K per day limit on push transfers to an external account still applies.

[indexfundfan]

Open a Alliant checking account.

I'm happy with Alliant in every other respect, so this is probably the best solution for me. I have an open checking account there, and I'll just need to make sure any external links are set up with checking and not the savings account. It's easy enough and quick to transfer between two accounts at the same institution. Thanks!

Edit: only a partial solution, since the $25K per day limit on push transfers to an external account still applies.

Can you fund the CD by mobile check?

[MikeG62]

Open a Alliant checking account.

I'm happy with Alliant in every other respect, so this is probably the best solution for me. I have an open checking account there, and I'll just need to make sure any external links are set up with checking and not the savings account. It's easy enough and quick to transfer between two accounts at the same institution. Thanks!

Edit: only a partial solution, since the $25K per day limit on push transfers to an external account still applies.

Can you pull the funds into another bank or broker (one which does not have a low transfer limit) and once it arrives immediately push the funds from that bank or broker to the NFCU?

Separately, are you wed to NFCU? Barksdale FCU has better CD rates (FWIW, I have CD's with both).

[othermike27]

Separately, are you wed to NFCU? Barksdale FCU has better CD rates (FWIW, I have CD's with both).

Barksdale looks like a good option to consider now that their field of membership is extended to veterans. Thanks for the pointer.

[MikeG62]

Separately, are you wed to NFCU? Barksdale FCU has better CD rates (FWIW, I have CD's with both).

Barksdale looks like a good option to consider now that their field of membership is extended to veterans. Thanks for the pointer.

If you aren’t already doing so, make sure you look at their plus-point 5-year ladder for their highest yielding rate options. Keep in mind that you only need to invest $1,000 in each tranche to qualify for the 20bp per CD rate bump (i.e., If you want to load up on shorter term CD’s just put $1,000 into the longer term ones).

Edited to add rates on Barksdale's Plus Point 5-year CD ladder for the benefit of others:

12-mo 1.45%
24-mo 1.70%
36-mo 1.80%
48-mo 1.90%
60-mo 2.10%

Membership available to, among others, military and family of current or former military (much like Navy Federal). Very easy to join. I was able to open account and fund taxable CD's within roughly 24 hours last week. Funding IRA CD's a bit more time consuming - submitted application Friday and funds arrived today (CD's now open).

[jeffyscott]

Has anybody ever been charged a transfer out fee by Schwab, when transferring cash from an IRA account to a bank or credit union for a CD?

My transfer was taking so long, I finally resorted to calling on the phone about it. In a call back I was told it would go out that day, but then also that they were able to waive the $25 fee. When I said "fee, for what?", she said there is a $25 fee for a partial transfer out.

I don't know if I knew about that or not, but would've assumed that it would only apply to a brokerage account transfer using ACAT.

[indexfundfan]

Has anybody ever been charged a transfer out fee by Schwab, when transferring cash from an IRA account to a bank or credit union for a CD?

My transfer was taking so long, I finally resorted to calling on the phone about it. In a call back I was told it would go out that day, but then also that they were able to waive the $25 fee. When I said "fee, for what?", she said there is a $25 fee for a partial transfer out.

I don't know if I knew about that or not, but would've assumed that it would only apply to a brokerage account transfer using ACAT.

I took a look. According to

https://www.schwab.com/public/file/P-10 ... 060-42.pdf

Schwab charges $50 for full transfers and $25 for partial transfers. Interesting to hear that Schwab is waiving the fee.

On the other hand, you could also have taken the full amount in the distribution to fund the CD. There would then be no fee.

FYI, Fidelity and Vanguard do not charge fees for transfers (full or partial) and TDA does not charge fee for partial transfers.

[LadyGeek]

Not a best rate, but to suggest that you shouldn't ignore your local brick and mortar bank. Talk to them in-person and don't go solely by the website rates.

I just renewed a CD for my Mom at her local bank, which is a big regional bank. The automatic renewal rate for her 48 month CD was 0.05%.

I have POA for her bank account, so I called the bank. She's a "preferred customer" and can get unadvertised offers. They had 2 promotional offers - 11 months at 0.25%, or 24 months at 0.30%. I went for 24 months at 0.30%.

The promotional offer requires 10k in a checking account.

Four years ago, when we first got this 48 month CD (at 1.55%), we created 2 checking accounts. One has the 10k in it, the other has only the amount my Mom needs to pay her bills for the month. Together, these checking accounts meet the 10k requirement for the promotion.

My Mom is elderly and can't manage anything other than a simple checkbook. She won't be able to understand why a checkbook has 10k in it, which is why we created 2 accounts. I'm not moving the money anywhere else, as it will make things too complicated for her to follow. She takes care of her checkbook and I manage everything else.

I'm mentioning this as a way to work within the system and to utilize your local bank. The bank personnel are very helpful. They're the ones who came up with the suggestion to have 2 accounts the first time around.

[FireAway]

Barksdale looks like a good option to consider now that their field of membership is extended to veterans. Thanks for the pointer.
[...]
Membership available to, among others, military and family of current or former military (much like Navy Federal).

I qualified for NFCU since my son is active military, but I don't seem to be eligible for Barksdale: It is open to active military (or family) serving at one of the local Barksdale bases, or to Veterans (or family) - so, much more restrictive than NFCU.

Mike, am I reading it wrong? Is there some other way to be eligible?

[jeffyscott]

Has anybody ever been charged a transfer out fee by Schwab, when transferring cash from an IRA account to a bank or credit union for a CD?

My transfer was taking so long, I finally resorted to calling on the phone about it. In a call back I was told it would go out that day, but then also that they were able to waive the $25 fee. When I said "fee, for what?", she said there is a $25 fee for a partial transfer out.

I don't know if I knew about that or not, but would've assumed that it would only apply to a brokerage account transfer using ACAT.

I took a look. According to

https://www.schwab.com/public/file/P-10 ... 060-42.pdf

Schwab charges $50 for full transfers and $25 for partial transfers. Interesting to hear that Schwab is waiving the fee.

On the other hand, you could also have taken the full amount in the distribution to fund the CD. There would then be no fee.

FYI, Fidelity and Vanguard do not charge fees for transfers (full or partial) and TDA does not charge fee for partial transfers.

This was my second transfer to a CD, the first did not charge anything either. So I am wondering if maybe they routinely don't actually charge for this kind of transfer, with it just being cash to a bank.

I did see that their competition doesn't charge, so if they ever do try that, I can threaten to transfer the entire account out.

[MikeG62]

Barksdale looks like a good option to consider now that their field of membership is extended to veterans. Thanks for the pointer.
[...]
Membership available to, among others, military and family of current or former military (much like Navy Federal).

I qualified for NFCU since my son is active military, but I don't seem to be eligible for Barksdale: It is open to active military (or family) serving at one of the local Barksdale bases, or to Veterans (or family) - so, much more restrictive than NFCU.

Mike, am I reading it wrong? Is there some other way to be eligible?

I applied as a “member of the immediate family of...any person eligible for membership.” In my case, the person eligible for membership is my father who meets the criteria as someone “honorably discharged or (a) retired veteran who served in any of the Armed Services of the United States”.

I suppose it is a bit more restrictive than Navy Federal CU in that if your way in is through an “active” military member, that person needs to be serving at one of the local Barksdale bases.

Do you not have a living parent who at one time served in the military?

[MikeG62]

Not a best rate, but to suggest that you shouldn't ignore your local brick and mortar bank. Talk to them in-person and don't go solely by the website rates.

I just renewed a CD for my Mom at her local bank, which is a big regional bank. The automatic renewal rate for her 48 month CD was 0.05%.

I have POA for her bank account, so I called the bank. She's a "preferred customer" and can get unadvertised offers. They had 2 promotional offers - 11 months at 0.25%, or 24 months at 0.30%. I went for 24 months at 0.30%.

The promotional offer requires 10k in a checking account.

Couldn’t you keep the CD’s and the excess funds sitting in the second checking account in an online bank or credit union where yields are considerably higher than what you are able to get in the local bank? Then link that account to the checking account to easily transfer funds in when necessary.

Settling for 0.30% for 24 months all to keep the funds in one place is a tough pill to swallow. Maybe your Mom wants it that way and if so that is that.

[othermike27]

Barksdale looks like a good option to consider now that their field of membership is extended to veterans. Thanks for the pointer.
[...]
Membership available to, among others, military and family of current or former military (much like Navy Federal).

I qualified for NFCU since my son is active military, but I don't seem to be eligible for Barksdale: It is open to active military (or family) serving at one of the local Barksdale bases, or to Veterans (or family) - so, much more restrictive than NFCU.

Mike, am I reading it wrong? Is there some other way to be eligible?

I just finished my Barksdale signup, and can verify that it's open to family of active military (among others). Immediate family is usually defined as parents, spouse, siblings, children. So you should qualify. Did you see something that specifically said you can't?

[LadyGeek]

Not a best rate, but to suggest that you shouldn't ignore your local brick and mortar bank. Talk to them in-person and don't go solely by the website rates.

I just renewed a CD for my Mom at her local bank, which is a big regional bank. The automatic renewal rate for her 48 month CD was 0.05%.

I have POA for her bank account, so I called the bank. She's a "preferred customer" and can get unadvertised offers. They had 2 promotional offers - 11 months at 0.25%, or 24 months at 0.30%. I went for 24 months at 0.30%.

The promotional offer requires 10k in a checking account.

Couldn’t you keep the CD’s and the excess funds sitting in the second checking account in an online bank or credit union where yields are considerably higher than what you are able to get in the local bank? Then link that account to the checking account to easily transfer funds in when necessary.

Settling for 0.30% for 24 months all to keep the funds in one place is a tough pill to swallow. Maybe your Mom wants it that way and if so that is that.

It's my choice, but it's based on what my Mom can handle. My Mom has "won the game" and doesn't need the CD for her expenses. She has no computer and can't handle cellphone texts. If there's a problem, it's always "let's go to the bank". So, capital preservation and keeping it simple (local) for her is all she really needs.

[OAG]

Yes when you have "won the game" and are "older" it makes absolutely (IMO) to "chase rates". She could get 1.20% at NFCU for instance but why do what is required to do that? If you are "risk adverse" and do not need to just stay still and keep it at the best rate you can get locally and convienently.

[FireAway]

I just finished my Barksdale signup, and can verify that it's open to family of active military (among others). Immediate family is usually defined as parents, spouse, siblings, children. So you should qualify. Did you see something that specifically said you can't?

I didn't see a message saying "you don't qualify"; I'm just going by the stated requirements which say "Active military or civilian employees at Barksdale Air Force Base [or] Active military or civilian employees at Fort Polk Army Post". So it's not any active military or family.

I just went through the signup, and it seems to have gone OK, except that the last screen said something like "A Barksdale employee will be contacting you in the next 1-2 days to complete your application!", so I'm not sure what that is about.

[MikeG62]

I just finished my Barksdale signup, and can verify that it's open to family of active military (among others). Immediate family is usually defined as parents, spouse, siblings, children. So you should qualify. Did you see something that specifically said you can't?

I didn't see a message saying "you don't qualify"; I'm just going by the stated requirements which say "Active military or civilian employees at Barksdale Air Force Base [or] Active military or civilian employees at Fort Polk Army Post". So it's not any active military or family.

I just went through the signup, and it seems to have gone OK, except that the last screen said something like "A Barksdale employee will be contacting you in the next 1-2 days to complete your application!", so I'm not sure what that is about.

There are some documents that you need to sign. You’ll get an email with a link to the documents, which you’ll take care of with DocuSign. I got they email the same day I applied online. Completed the forms and then was able to login. As I said upthread I was able to open the account and fund the CD’s in roughly 24 hours. Was keen to get the CD’s funded since the rate is not locked until the funds arrive.

[othermike27]

I just finished my Barksdale signup, and can verify that it's open to family of active military (among others). Immediate family is usually defined as parents, spouse, siblings, children. So you should qualify. Did you see something that specifically said you can't?

I didn't see a message saying "you don't qualify"; I'm just going by the stated requirements which say "Active military or civilian employees at Barksdale Air Force Base [or] Active military or civilian employees at Fort Polk Army Post". So it's not any active military or family.

I just went through the signup, and it seems to have gone OK, except that the last screen said something like "A Barksdale employee will be contacting you in the next 1-2 days to complete your application!", so I'm not sure what that is about.

I was following the veteran signup path, so I missed the bit about active duty and relatives being limited to the two LA locations. Might still be worth a try for you since the expansion to include veterans is quite recent: see Ken Tumin's article dated July 13 on depositaccounts.com

[LISD]

FYI - TIAA Bank 12mo CDs recently dropped from .95% to .60% - in the same time, Ally and Sallie May dropped only .1%. That's a big decrease. They 'vow' to offer the top 5% yields. Doesn't seem like that to me. I was going to setup an account but I'll have to look elsewhere now.

[Escapevelocity]

Marcus offering 20 basis point bonus to AARP members. This makes their current rate 1.1% on their 8 month no-penalty CD

https://www.marcus.com/us/en/savings/aa ... id=4099103

They are also offering 1.0% on their regular CD

[peke9898]

Marcus offering 20 basis point bonus to AARP members. This makes their current rate 1.1% on their 8 month no-penalty CD

https://www.marcus.com/us/en/savings/aa ... id=4099103

They are also offering 1.0% on their regular CD

Did they drop their rates already? I see 0.85% for 8 months for AARP members. No mention of bonus.

[gradStudentInvestor]

Marcus offering 20 basis point bonus to AARP members. This makes their current rate 1.1% on their 8 month no-penalty CD

https://www.marcus.com/us/en/savings/aa ... id=4099103

They are also offering 1.0% on their regular CD

Did they drop their rates already? I see 0.85% for 8 months for AARP members. No mention of bonus.

Yes, they dropped the rate earlier this week.

[LISD]

I ended up putting my $ in a local CU at 1.05% APY/ 2 Yrs (USE CU).

I was going to just add it to my Ally $, but I've soured on Ally, and on internet banking in general. I called Ally to ask a question about the transfer. They asked a lot of security questions (which is OK), then sent me a code by text. Except that my phone is registered in my Wife's name - and that spooked them (didn't even know they check that). They shut off all my access to my account for days, and I had to reestablish access. Bottom line is that remote identification is a poor process, sketchy and immature. If you need money fast it may not be there for you. And/or may involve a lot of hassles. With a local CU I managed to get a better rate than Ally and don't have the security nightmares to deal with (show up (1 mile from our house), mask on face, and present a drivers license - done!). Go Brick-n-Mortar!

[Kevin M]

I ended up putting my $ in a local CU at 1.05% APY/ 2 Yrs (USE CU).

I was going to just add it to my Ally $, but I've soured on Ally, and on internet banking in general. I called Ally to ask a question about the transfer. They asked a lot of security questions (which is OK), then sent me a code by text. Except that my phone is registered in my Wife's name - and that spooked them (didn't even know they check that). They shut off all my access to my account for days, and I had to reestablish access. Bottom line is that remote identification is a poor process, sketchy and immature. If you need money fast it may not be there for you. And/or may involve a lot of hassles. With a local CU I managed to get a better rate than Ally and don't have the security nightmares to deal with (show up (1 mile from our house), mask on face, and present a drivers license - done!). Go Brick-n-Mortar!

Sorry to hear about your bad experience with Ally Bank. I've been with them for years, and have never experienced any problems like that. However, I rarely call, but instead use online chat to ask questions and get issues resolved. Since I am already logged on and authenticated, there are never any security questions involved. I also prefer online chat since I can more easily work on other things while waiting for the rep to investigate as necessary to get me an answer.

Kevin

[guppyguy]

General question as relative CD newbie. Right now I have a couple with Marcus/GS but would like to push my maturities out from 7 months to 4-6 years. Total of 50K.

What are some red flags to look for on a website such as DespositAccounts.com? Is the "Health Rating" that important? For example, when I search for location "Any" the top result is East River FCU with a 5 yr CD at 2.35%.

How do I avoid a mistake?

[tfb]

What are some red flags to look for on a website such as DespositAccounts.com? Is the "Health Rating" that important? For example, when I search for location "Any" the top result is East River FCU with a 5 yr CD at 2.35%.

How do I avoid a mistake?

"Membership in East River Federal Credit Union is open to those who live, work, worship, or attend school, and businesses and legal entities located in Miner County or Lake County, South Dakota." If you aren't in those two counties, you can't have an account there. That's a red flag.

[guppyguy]

What are some red flags to look for on a website such as DespositAccounts.com? Is the "Health Rating" that important? For example, when I search for location "Any" the top result is East River FCU with a 5 yr CD at 2.35%.

How do I avoid a mistake?

"Membership in East River Federal Credit Union is open to those who live, work, worship, or attend school, and businesses and legal entities located in Miner County or Lake County, South Dakota." If you aren't in those two counties, you can't have an account there. That's a red flag.

Okay....that's funny. I guess I'm the red flag for not reading deep enough.

[EvelynTroy]

guppyguy (nice screen name) -
I use Deposit Accounts.com regularly - although these days no so much, there just isn't anything worthwhile, imo.
Things I look at - and it will be different for others. I take my portfolio risk on the equity/stock side, so the fixed income side I want to be as safe as possible. I don't have to take much risk so 90% of my fixed income portfolio is in bank/credit card CD's.

Based on that I see a red flag for me with ERFCU and the B+ rating - it says right there, highlighted: Institutions with a small asset base, a short operating history, or negative return on assets can represent an instability risk beyond what their financial ratios indicate. East River Federal Credit Union has a low asset base.

The financial rating is important to me, I only buy CD's from A and A+ rated institutions, unless I can understand a good reason for purchasing a lower rated one.

For me the 2.35% 5 yr. CD is a red flag, being far above all the other listings, WHY? Higher interest, higher risk.

For me going out 5 years in this environment adds to the risk.
You want to know what the early withdrawal penalty is? Can you withdraw a partial amount?

I'm assuming you understand first thing to look at is the field of membership restrictions - you have to reside in certain counties in South Dakota for this one?

Take your time in purchasing - ask questions here. There are others that are much more sophisticated, knowledgeable than I.
Evelyn

[guppyguy]

guppyguy (nice screen name) -

I'm assuming you understand first thing to look at is the field of membership restrictions - you have to reside in certain counties in South Dakota for this one?

Yeah, I just didn't read that until after I posted here.

So is their a min curve gradient you like before going out to 5 years? I think I read 20-30bp per year somewhere, but that was more in reference to the treasury yield curve.

Thanks-

Guppyguy

[EvelynTroy]

guppyguy (nice screen name) -

I'm assuming you understand first thing to look at is the field of membership restrictions - you have to reside in certain counties in South Dakota for this one?

Yeah, I just didn't read that until after I posted here.

So is their a min curve gradient you like before going out to 5 years? I think I read 20-30bp per year somewhere, but that was more in reference to the treasury yield curve.

No, nothing in particular - with the collapsing economy, current rates being so very low, and not being able to predict interest rates - who knows we could pull out of this quicker. Just doesn't seem worthwhile to go out 5 years for 1.5% interest.
I bought a 5 yr. CD a special promotion - at The Federal Savings Bank, Chicago - Issued 5.21.20 Matures 5.21.25 (5 yr. CD) 2.03%
I had a CD mature and needed a replacement, rates were dropping fast so I just grabbed it - an A+ rated bank.
FWIW, I don't chase promotions or yields - a CD is maturing and I keep an eye open for where I'm going to find a replacement.

Evelyn

[guppyguy]

guppyguy (nice screen name) -

I'm assuming you understand first thing to look at is the field of membership restrictions - you have to reside in certain counties in South Dakota for this one?

Yeah, I just didn't read that until after I posted here.

So is their a min curve gradient you like before going out to 5 years? I think I read 20-30bp per year somewhere, but that was more in reference to the treasury yield curve.

No, nothing in particular - with the collapsing economy, current rates being so very low, and not being able to predict interest rates - who knows we could pull out of this quicker. Just doesn't seem worthwhile to go out 5 years for 1.5% interest.
I bought a 5 yr. CD a special promotion - at The Federal Savings Bank, Chicago - Issued 5.21.20 Matures 5.21.25 (5 yr. CD) 2.03%
I had a CD mature and needed a replacement, rates were dropping fast so I just grabbed it - an A+ rated bank.
FWIW, I don't chase promotions or yields - a CD is maturing and I keep an eye open for where I'm going to find a replacement.

Evelyn

5 rung ladder, each approximately the same value?

[MikeG62]

guppyguy (nice screen name) -

I'm assuming you understand first thing to look at is the field of membership restrictions - you have to reside in certain counties in South Dakota for this one?

Yeah, I just didn't read that until after I posted here.

So is their a min curve gradient you like before going out to 5 years? I think I read 20-30bp per year somewhere, but that was more in reference to the treasury yield curve.

No, nothing in particular - with the collapsing economy, current rates being so very low, and not being able to predict interest rates - who knows we could pull out of this quicker. Just doesn't seem worthwhile to go out 5 years for 1.5% interest.
I bought a 5 yr. CD a special promotion - at The Federal Savings Bank, Chicago - Issued 5.21.20 Matures 5.21.25 (5 yr. CD) 2.03%
I had a CD mature and needed a replacement, rates were dropping fast so I just grabbed it - an A+ rated bank.
FWIW, I don't chase promotions or yields - a CD is maturing and I keep an eye open for where I'm going to find a replacement.

Evelyn

5 rung ladder, each approximately the same value?

They don’t necessarily have to be.

A recent example for me. Did a 5 year IRA CD ladder at Barksdale Fed CU in August. They had a promotion with a 20bp yield bump if doing a 5 year ladder. In their case minimum per tranche of the ladder was $1,000. I was looking to invest $225,000. So I did the following:

$1,000 12-month CD at 1.45%
$1,000 24-month CD at 1.70%
$1,000 36-month CD at 1.80%
$100,0000 48-month CD at 1.90%
$122,000 60-month CD at 2.10%

[MikeG62]

guppyguy (nice screen name) -

I'm assuming you understand first thing to look at is the field of membership restrictions - you have to reside in certain counties in South Dakota for this one?

Yeah, I just didn't read that until after I posted here.

So is their a min curve gradient you like before going out to 5 years? I think I read 20-30bp per year somewhere, but that was more in reference to the treasury yield curve.

Thanks-

Guppyguy

I believe the 20bps per additional year of term is something Larry Swedroe suggests. Larry knows what he’s talking about.

[MikeG62]

General question as relative CD newbie. Right now I have a couple with Marcus/GS but would like to push my maturities out from 7 months to 4-6 years. Total of 50K.

What are some red flags to look for on a website such as DespositAccounts.com? Is the "Health Rating" that important? For example, when I search for location "Any" the top result is East River FCU with a 5 yr CD at 2.35%.

How do I avoid a mistake?

First thing I look at is field of membership.

If that checks out, I then verify that they are FDIC or NCUA insured.

Then I look at reviews on the DA website. I want to know what it’s like to do business with them.

I look at deposit base - to get a sense of how big they are. Then number of branches.

Then I’ll look at the health rating on DA.

If all checks out and assuming their rate is attractive I move swiftly to get my money in before the rates change.

I don’t generally move money for variable rate accounts - so only CD’s. Not going to bother opening an account and moving money for a product with a variable rate.

[FireAway]

"Membership in East River Federal Credit Union is open to those who live, work, worship, or attend school, and businesses and legal entities located in Miner County or Lake County, South Dakota." If you aren't in those two counties, you can't have an account there. That's a red flag.

I wouldn't call that a "red flag" - by law, EVERY credit union must have SOME restrictions on membership. Some limit it by geographical area, some by employer, some by military service, etc. So while the above restriction may mean that a given person is ineligible, it generally has no bearing upon the soundness of the institution.

[Kevin M]

<snip> on a website such as DespositAccounts.com? <snip> For example, when I search for location "Any" the top result is East River FCU with a 5 yr CD at 2.35%.

I usually search with my "region" selected. There must be a cookie that saves this, because it's always pre-selected when I start searching; "plus all nationwide options" also is selected. However, you still may see credit unions in your region, or supposedly nationwide, that you aren't eligible for, so you have to read the eligibility criteria, and maybe even call the credit union.

Conversely, there may be a credit union that doesn't come up for your region (or nationwide) that you might be able to sneak into, so selecting "any" isn't a bad idea, but it requires doing a lot more sifting through the eligibility criteria. It's not unusual to be able to join some organization for a few dollars to be eligible.

One thing that doesn't seem to be saved in a cookie is "Deposit Amount", which for me always defaults to $25K. I'm usually looking for something above $100K, so I try to remember to change that.

Is the "Health Rating" that important?

Probably better to go with a higher health rating, but I honestly haven't paid much attention to it in the past. If you are covered by FDIC or NCUA deposit insurance, the worst that can happen is that you are forced to liquidate your CD early, and you might have to wait awhile to get your money. I have bought CDs at a number of banks and credit unions since late 2010, and this has never happened to me. I did have a couple of brokered CDs where the bank failed some years ago, and in each of these cases I got my money within a few days.

One thing I look for is ease of opening the CD. I'm not going to bother if there isn't a way to do it online, or possibly by phone. I'm not going to deal with a bank or credit union where everything can only be done by mail or with a visit to the branch (except in the unlikely situation that the branch is local).

Similarly, you want it to be easy to get your money out when the CD matures. For taxable, I want to be able to have the proceeds deposited into a demand deposit account, and be able to ACH it out to another financial institution (usually have to set up the ACH at the external financial institution due to low ACH limits for most credit unions and some banks). For an IRA, I want it to be easy to do an IRA transfer out.

A question I'm always going to ask for IRA CDs from now on is whether or not a medallion signature is required to do an IRA transfer out. I've found it harder and harder to get MSGs, and I don't want that to be a barrier to get my money out. In my experience, it's very rare; Ally used to require it, and I had to get one a few times to do IRA transfers out of Ally, but the last time, when I was having a huge problem getting one, I called and they said they had dropped that requirement.

Another gotcha, that is more of an issue for IRA CDs, due to the time it might take to do an IRA transfer, is that the rate might drop before the CD is funded. Some banks and credit unions will agree to lock the rate once they receive the IRA transfer form, but I've found this to be the exception rather than the rule. I had a rate drop on me once during an IRA transfer, but the rate was still OK, so I stuck with it.

Also regarding IRAs, note that DepositAccounts has a separate filter for IRA Rates, and sometimes good IRA CD deals will only show up there.

Oh, and be sure to ignore the "Sponsored" section at the top of the search, as those usually are not the best rates.

Be sure to put your maturity dates into a calendar and monitor them. You don't want a CD "accidentally" rolling over to a crappy rate because you weren't paying attention. If the rates aren't good, I usually call a few weeks before maturity, and tell them to put it into my savings or share account, and then transfer it somewhere else from there.

As others have noted, the pickings have been slim lately. Last time we were in a period of really low rates for some years, after the GFC, good CD deals would pop up fairly regularly, and be noted in threads like this. Haven't seen that happening lately.

Kevin

[tomd37]

I have a ladder of certificates that expire at the end of each month. There were as many as eighteen certificates in effect at one time when rates were better and for different lengths, but now I am down to twelve certificates maturing at the end of each month.

To keep track of them I made a simple Excel spreadsheet reflecting the account number, issuing bank/credit union, period of certificate, APY, issue date, maturity date, and balance. I can sort on any column, but primarily sort on maturity date for ease of remembering that I have action to take each month. I am fortunate that we each have one special offer add-on to $75K certificate that was purchased in February 2020 that is for 17 months at 2.25% APY. As current certificates mature I am adding to those two to get them up to $75K. Best one-year certificate right now at my credit union (NFCU) is at 0.90 APY. Sure different than it was a few years ago.

[MikeG62]

...One thing I look for is ease of opening the CD. I'm not going to bother if there isn't a way to do it online, or possibly by phone. I'm not going to deal with a bank or credit union where everything can only be done by mail or with a visit to the branch (except in the unlikely situation that the branch is local).

Kevin

+1 on this very important point. I want to be able to do everything online. If I have to bother with snail mail I almost always pass, especially for IRA CD’s which tend to take longer than taxable CD’s. Not willing to inject extra days in that process. I do call and sometimes call multiple times to bird-dog the process and to be sure it happens as quickly a as possible. Sometimes this requires calling both financial institutions (especially with IRA CD’s).

[EvelynTroy]

"Membership in East River Federal Credit Union is open to those who live, work, worship, or attend school, and businesses and legal entities located in Miner County or Lake County, South Dakota." If you aren't in those two counties, you can't have an account there. That's a red flag.

I wouldn't call that a "red flag" - by law, EVERY credit union must have SOME restrictions on membership. Some limit it by geographical area, some by employer, some by military service, etc. So while the above restriction may mean that a given person is ineligible, it generally has no bearing upon the soundness of the institution.

My thought would be when the poster noted "that's a red flag" regarding the membership requirement. It refers to being a red flag, to simply move on and not waste your time looking at the particular offering because you don't qualify due to your residence. But you're right it generally has no bearing on the sounds of the institution.
Evelyn

[EvelynTroy]

To guppyguy the OP -
Kevin M. provided a terrific overview of points to look at in his post - my recommendation, copy and paste that post into a doc for future reference.
Also recommend as you learn about purchasing CD's search for Kevin M's post - he is an excellent educator.

Evelyn

PS You asked me about laddering CD's in a previous post - no, I don't ladder them, I just look for one and purchase when I need one, i.e. one has matured, or I have excess cash to invest.

[hudson]

Thanks MikeG62, Kevin M, and EvelynTroy!
Good stuff!
A mistake that I've made in the past, is trying to make everything work online/electronically.
Now when I find a good rate, I immediately start calling and asking questions because good rates go away in a few days.
I want to know if I can join somehow immediately. Can I skip getting applications sent in the mail? Can I download the application, or can you send it electronically. Can I sign the signature card electronically? Can I email or fax documents. (I don't have a fax machine; I use faxzero.) If the bank or credit union doesn't do faxes, texts, or emails, I'll overnight documents or a check.

Bottom Line: Once I find a good rate, it's all hands on deck and pick up the phone. Good rates don't last.

Note: If I had long term money to invest today and I could lock in 1.5% or over for 5 years, I might do it.

[MikeG62]

Thanks MikeG62, Kevin M, and EvelynTroy!
Good stuff!
A mistake that I've made in the past, is trying to make everything work online/electronically.
Now when I find a good rate, I immediately start calling and asking questions because good rates go away in a few days.
I want to know if I can join somehow immediately. Can I skip getting applications sent in the mail? Can I download the application, or can you send it electronically. Can I sign the signature card electronically? Can I email or fax documents. (I don't have a fax machine; I use faxzero.) If the bank or credit union doesn't do faxes, texts, or emails, I'll overnight documents or a check.

Bottom Line: Once I find a good rate, it's all hands on deck and pick up the phone. Good rates don't last.

+1 Hudson.

For my last IRA CD, the CU did not accept an ACH transfer of funds for IRA's (they did for taxable CD's though). I needed to have Fidelity cut and mail a check. I called Fidelity and asked if there was a way to expedite the check processing/delivery. Fidelity said they would overnight mail the check (at no charge) as long as the CU transfer form requested the check be sent overnight. I made sure to note that (in two separate locations) on the transfer request form. Of course, I then needed a mailing address as overnight was not going to work for a PO box address (which was the standard method of getting checks to the CU). That required yet another call (IRA processing department was at a physical location different from the town where the PO box was located - which was the same as another branch location). For this transfer, I initiated the process with the CU on a Friday and the check arrived at the CU by noon on the following Wednesday. Also important was that I wanted this to be treated as a trustee to trustee transfer (with no reporting to the IRS - for a number of reasons). I was assured by both financial institutions that this would be the case given how the transfer was going to take place. Being retired, I fortunately have the time to bird-dog the process and do everything I can to ensure funds arrive as quickly as possible.

[hudson]

Expressions used above defined:

What does [b]bird dog it[/b] mean?
People began using bird-dog as a verb meaning "to closely watch someone or something" or "to doggedly seek out someone or something" in the early 20th century.

All Hands on Deck: all hands on deck
1. A call for all members of a ship's crew to come to the deck, usually in a time of crisis. (A "hand" is a member of a ship's crew.)
We're under attack! All hands on deck!
2. By extension, everyone available to help with a problem, or a call for those people to help.
Your grandmother arrives tomorrow and the house is still a mess—I need all hands on deck to help me clean!
All hands on deck! We've got to roll out this tarp before the rain starts. Now let's go!

[guppyguy]

To guppyguy the OP -
Kevin M. provided a terrific overview of points to look at in his post - my recommendation, copy and paste that post into a doc for future reference.
Also recommend as you learn about purchasing CD's search for Kevin M's post - he is an excellent educator.

Evelyn

PS You asked me about laddering CD's in a previous post - no, I don't ladder them, I just look for one and purchase when I need one, i.e. one has matured, or I have excess cash to invest.

Already did (screenshot). Yes he is.

[guppyguy]

I have a ladder of certificates that expire at the end of each month. There were as many as eighteen certificates in effect at one time when rates were better and for different lengths, but now I am down to twelve certificates maturing at the end of each month.

To keep track of them I made a simple Excel spreadsheet reflecting the account number, issuing bank/credit union, period of certificate, APY, issue date, maturity date, and balance. I can sort on any column, but primarily sort on maturity date for ease of remembering that I have action to take each month. I am fortunate that we each have one special offer add-on to $75K certificate that was purchased in February 2020 that is for 17 months at 2.25% APY. As current certificates mature I am adding to those two to get them up to $75K. Best one-year certificate right now at my credit union (NFCU) is at 0.90 APY. Sure different than it was a few years ago.

So how many different banks/CUs does that consist of? 18?

In general, to all, is there a point where your fixed investments/CDs are spread across too many institutions and what does that look like?