CD rates

[frugal saver]

Normally, when something is messing with the markets, I just wait it out. But I have 6 Certificate of Deposits coming due now and into early May. And I'm having to renew them at horrendous rates.

Not happy.

Anyone have a crystal ball and can see if rates will be better next year when these plus one more expire?

[disneysteve]

When you find that crystal ball let me know. There are some bigger things than CD rates I'd like to check on.

[Jluke]

If CD rate is less than online money market (i.e. CapOne, Ally etc) skip the CD.

assuming it is not an IRA and money can be moved easily.

[kork13]

If CD rate is less than online money market (i.e. CapOne, Ally etc) skip the CD.

assuming it is not an IRA and money can be moved easily.

Agreed. Also check TreasuryDirect I-Bonds. A new rate drops 1 May though, so it'll likely adjust downward.

[scfr]

Sorry, I don't have a crystal ball!

Have you checked the rates at local credit unions? Once in awhile I find a decent "pop up" (get it before it's gone) rate at a CU.

If you don't like the rates you are getting right now, and want to gamble that they will rise, you could always go with a no-penalty CD. Marcus 7-mo no-penalty CD is 1.7% (as of this minute, subject to change) which is about as good or better as a savings or money market account. Recently shifted some of our "waiting to buy a house" funds there myself.

[disneysteve]

Have you checked the rates at local credit unions? Once in awhile I find a decent "pop up" (get it before it's gone) rate at a CU.

The same is true for local banks, especially smaller banks rather than the big national ones. Sometimes they will run a special to bring in new money. My mom got a really great CD rate nearby last year. They don't typically list them on their website. The best place to find them is usually in the local newspaper.

[~bs]

If CD rate is less than online money market (i.e. CapOne, Ally etc) skip the CD.

assuming it is not an IRA and money can be moved easily.

Main weakness of that is that you are subject to market MM rates and not locked into a long term rate. I would say put a portion in MM, but also ladder the CDs.

[Scallywag]

The same is true for local banks, especially smaller banks rather than the big national ones. Sometimes they will run a special to bring in new money. My mom got a really great CD rate nearby last year. They don't typically list them on their website. The best place to find them is usually in the local newspaper.

I am really worried about the health of banks, big & small, so their rates are inconsequential right now. What I am concerned is where I can safely park my cash?

[disneysteve]

I am really worried about the health of banks, big & small, so their rates are inconsequential right now. What I am concerned is where I can safely park my cash?

Any bank that is FDIC insured is a safe place to put your money. Even if the bank goes under, you'll still get your money back.

As for non-bank options, you could go with very short term bonds as an alternative.

[JBinKC]

I am currently faced with the same problem parking my short term operating cash. My t bill comes due and it appears I will have to pick among a bunch of potential savings accounts at bankrate.com that I am totally unfamiliar with especially potential hidden fees which would defeat the purpose of chasing yield. Is this trouble now worth a few hundred dollars of potential gross income??.

[kork13]

I've got a CD coming up to mature in mid-August -- the largest chunk of my EF in an Ally no-penalty CD earning 2.1% for now. Unless I come across a good replacement option, I'll likely just let it renew (currently, looking at 1.55%). Realistically, I'm not looking for it to earn big returns, merely stay safe in the event that it's needed.

[Fishindude77]

In this day and age you can't really look at CD's as investment devices, more like a "safe money storage" location for funds you may need access to in the not too distant future.
I just keep renewing mine at the best rates I can get and take comfort in having that readily available cash on hand.

[disneysteve]

In this day and age you can't really look at CD's as investment devices, more like a "safe money storage" location

I think that's always been the definition of a CD. It typically pays a little more than a savings account because the bank knows they have use of those funds for a set period of time.

[Fishindude77]

I think that's always been the definition of a CD. It typically pays a little more than a savings account because the bank knows they have use of those funds for a set period of time.

Not so sure about that?
Have heard lots of stories about folks older than me that remember 15% CD's.

[disneysteve]

Not so sure about that?
Have heard lots of stories about folks older than me that remember 15% CD's.

I remember them. You need to keep in mind that they were still paying less than inflation. So in today's world, 15% sounds amazing, but at the time, it wasn't proportionately any better than 2% is now.