Inverted yield curve for CDs

[disneysteve]

I have a 6-month CD that comes due in February with AmTrust Bank. I just looked at their current rates to get an idea of what it would be if I renew.

6 months: 5.32
9 months: 5.23
12 month: 5.22
3 year: 4.88
5 year: 4.97

Very interesting. And those rates aren't any higher than the top-yielding money market accounts. So should I renew for 6 months or open a new MMA? Are MMA rates going to drift down? If so, I'd come out a bit ahead by locking in the 5.32.

[scfr]

We ran in to the same thing when a CD matured recently.

Don't know if you are interested in moving the CD, but IndyMac Bank is currently offering 5.45% for 3-mo or 6-mo CDs.

We have a CD and an MMA at IndyMac and have been happy with their service. Their rates have consistently stayed above average. They have a Bankrate.com rating of 3-stars which is "Performing" ... not outstanding, but it's the same as lots of major players such as BofA.

[disneysteve]

Originally Posted by scfr

Don't know if you are interested in moving the CD, but IndyMac Bank is currently offering 5.45% for 3-mo or 6-mo CDs.

I'd be happy to move the money. I'll check them out when the maturity date gets closer. Thanks.

[poundwise]

Be advised: The figures referred to above for the AmTrust CDs are the interest rates, while the figures given for the IndyMac offerings are the yields.


IndyMac : 6 month CD : 5.31% rate : 5.45% APY

AmTrust : 6 month CD : 5.32% rate : 5.46% APY


Those figures are accurate as of this posting.


You may also want to consider Imperial Capital Bank : 6 month CD : 5.37% rate : 5.50% APY

[scfr]

Originally Posted by poundwise

Be advised: The figures referred to above for the AmTrust CDs are the interest rates, while the figures given for the IndyMac offerings are the yields.

Excellent point, Poundwise, tho the AmTrust rates seem to vary depending on where you live. For my ZIP, it is only 5.25% APY (5.118% rate) for a 6-mo CD with a balance of $25K or more.

As far as I know, the Indymac APYs are the same regardless of where you live. [I'm sure someone will correct me if I'm wrong!]

[kv968]

Originally Posted by disneysteve

I have a 6-month CD that comes due in February with AmTrust Bank. I just looked at their current rates to get an idea of what it would be if I renew.

6 months: 5.32
9 months: 5.23
12 month: 5.22
3 year: 4.88
5 year: 4.97

Very interesting. And those rates aren't any higher than the top-yielding money market accounts. So should I renew for 6 months or open a new MMA? Are MMA rates going to drift down? If so, I'd come out a bit ahead by locking in the 5.32.

I think the only person who could answer your question there Steve is Mr. Ben Bernanke

It probably wouldn't hurt to lock into the 6 month cd though. MMA rates seem to be stuck at 5.35 and even if they go up within that time it'll probably only be by 5 basis points. If they go down, you're locked in and not for a long period of time.

How is your experience with AmTrust? I was going to open a MMA and maybe some cd's with them because they have really rates but I've read a few complaints about them. One being that in order to cash out of a cd, you have to send them a written letter saying you want out.

[poundwise]

Originally Posted by scfr

Excellent point, Poundwise, tho the AmTrust rates seem to vary depending on where you live. For my ZIP, it is only 5.25% APY (5.118% rate) for a 6-mo CD with a balance of $25K or more.

As far as I know, the Indymac APYs are the same regardless of where you live. [I'm sure someone will correct me if I'm wrong!]

I believe you are looking at the AmTrust Bank site, which is the bank's site for it's locations in FL and AZ. If you will visit the AmTrust Direct site, which is the Internet division, you'll see that the rates referred to above are offered to anyone in the United States.

[poundwise]

Originally Posted by kv968

How is your experience with AmTrust? I was going to open a MMA and maybe some cd's with them because they have really rates but I've read a few complaints about them. One being that in order to cash out of a cd, you have to send them a written letter saying you want out.

I had an AmTrust MMA and was quite dissatisfied, especially with the site itself. Not only with it's appearance (which I care little about) but with its functionality and displaying of information.

When I closed the account it was a pain. As you mention with CDs, I had to write a letter and the process took too long. This would indicate to me that some things to do with CD processes may be a hassle as well.

Though I moved my account to another bank offering less interest, I have not regretted it.

For CDs, the best rate (without having $25,000) is currently the above-mentioned Imperial Capital Bank. I have no experience with them or with IndyMac, but my advice would probably be to choose, or at least check out, one of them.

[kv968]

Thanks pound. I was mostly interested in their MMA but heard about the problems with their site also and decided against it. I ended up going with GMAC and, although the rate has dipped a bit, I've been quite happy with them. Good site and customer service.

[disneysteve]

I had excellent service from AmTrust when I opened the CD. I did it online and accidentally screwed up something on my application (my fault, not theirs). I called to get it straightened out and got a person on the phone right away who was very helpful. I called at night and the person I needed wasn't in. I got his name and left my number and he called me the next morning and fixed the problem.

I don't know about the service on the withdrawal end since I haven't done that yet. Perhaps I will just roll over this CD since their rate is very competitive.

[scfr]

Inticing rate at AmTrust Direct, so I checked them out. I would have to pass on AmTrust as I see the BankRate rating for Ohio Savings Bank (according to the AmTrust Direct web site, they are a division of Ohio Savings Bank) is only 2 stars, which is "Below Industry Average."
I'm decidedly on the conservative side, and have decided not to do business with any bank below 3 stars and I will go with a 4 or 5 star bank even if the rate is a tad lower.

I know FDIC insures deposits, but I've also heard that the amount of time it takes to get your money from FDIC if a bank goes belly up can be very long.

[Ima saver]

My local bank is offering 5.75 for a 6 month CD. I had planned on opening one this week, but I cannot write a check on my money for 7 business days. (The amount has to be at least $100,000.

[kv968]

Originally Posted by scfr

Inticing rate at AmTrust Direct, so I checked them out. I would have to pass on AmTrust as I see the BankRate rating for Ohio Savings Bank (according to the AmTrust Direct web site, they are a division of Ohio Savings Bank) is only 2 stars, which is "Below Industry Average."
I'm decidedly on the conservative side, and have decided not to do business with any bank below 3 stars and I will go with a 4 or 5 star bank even if the rate is a tad lower.

They were 4 stars about 4 or 5 months ago. I guess some complaints have been filing in.

[poundwise]

Originally Posted by kv968

They were 4 stars about 4 or 5 months ago. I guess some complaints have been filing in.

I don't believe the stars have to do with complaints/service but rather with the strength of the institution.

Actually, Bankrate.com outlines their system this way:

"Bankrate.com's Safe & Sound Capitalization, Asset quality, Earnings and Liquidity (CAEL)® is a proprietary, analytical product that assesses the financial condition of banks, thrifts and credit unions."

For the record, both IndyMac and Imperial Capital currently have a three star rating from Bankrate.com.

[Duchesse]

I started a CD ladder last May. In August I found a rate of 5.50% for 6 month at Citibank I locked in for 6 months. In November MM rates were just as good as CDs. The August CD is maturing next month but I don't see any good prospects.

[threebeansalad]

Anyone esle have any comments on cashing out CDs from AmTrust? I considering opening one there.