When are you all buying CDs/ I bonds? Now or are you waiting?

[Snydley]

I see the rates are rising, just wondering if others are buying CDs / I bonds now or if you think they might go up more in the coming months? thanks

[myrdale]

Personally I don't have any plans to buy CDs. Looking at historic trends I am a bit confused though. It looks like rates have ticked up to 0.4% for 5-year CDs, yet other spots I see ads for 5 year CD's with 3.5% rates. Kind of a gulf between those two points, so I am not sure which is accurate.

[disneysteve]

I’ve been buying T bills and CDs for the past few months, laddering as rates have climbed. 2-yr CDs are up to 3.35% which is pretty good for your cash holdings.

[Jluke]

Purchased a 12 month CD at end of June to cover most of next year’s school taxes.

CapOne 1.75%

I looked recently and I think the 12-month is at 2.5 there.

supposedly VMFXX at vanguard is paying a good rate too.

[disneysteve]

Purchased a 12 month CD at end of June to cover most of next year’s school taxes.

CapOne 1.75%

I looked recently and I think the 12-month is at 2.5 there.

supposedly VMFXX at vanguard is paying a good rate too.

Right now, T bills are still slightly ahead of CDs up to 12 months. You can get a 12-mo T bill for 3.06 or a CD for 3.00.

[Jluke]

Right now, T bills are still slightly ahead of CDs up to 12 months. You can get a 12-mo T bill for 3.06 or a CD for 3.00.

I wasn’t trying to hit this one out of the park.

that money was sitting in an account earning 0.1%.

at the time CapOne was around 0.7% in the old money market or 1% in the performance account that I recently opened. Something like that.

this way the money is locked until it is needed for taxes next year.

I do need to figure out I bonds and treasury bills.

I spent some time recently building my EF from 40k to 50k since everything is that much more expensive.

[scfr]

Current thinking in my household is to wait to lock in longer term CDs until they hit 5%.

[kork13]

Current thinking in my household is to wait to lock in longer term CDs until they hit 5%.

That's kinda my thought as well... If rates get up to 5% for 5yr CDs, I might drop some idle cash into one. I have about $20k in cash savings (pegged for travel, next car, or just spare cash) that I would probably be comfortable with locking away for a while. But it also depends on what other options look like at the time.

I've already maxed I-Bonds in January, so I've got to wait until next year for more.

[disneysteve]

I wasn’t trying to hit this one out of the park.

Oh that wasn't meant as a comment to you particularly. You bought in June. Rates have continued to climb since then. 2.5% is great and certainly better than the money was earning.

I started buying in the spring when Ally was at 0.5% and I was getting 0.85 to 1.0 which I thought was a good deal at the time. I went with 3-month T bills which was a good decision because now they are maturing and I'm rolling them into new ones paying 2.5-3 times more than that.

[Snydley]

Thanks for the helpful replies. I have never heard of a T bill so I will have to look into it. We currently have about 200K in various savings accounts so we are looking forward to gaining some interest off it to offset inflation a bit.

[disneysteve]

Thanks for the helpful replies. I have never heard of a T bill so I will have to look into it. We currently have about 200K in various savings accounts so we are looking forward to gaining some interest off it to offset inflation a bit.

Buying treasury bills is simple. I do it in our Vanguard account but any broker works. Also brokered CDs pay more than going directly through the bank.

[QuarterMillionMan]

Is there a minimum for T-bills such as $10,000 minimum? Also, is it exempt for taxes. I believe for CD's in California it is taxed at my ordinary income rate which is close to 10%.

[LivingAlmostLarge]

I bought one in march for 10 months with Marcus at 1.1%. Just keeping my tax payment in cd

[kork13]

Is there a minimum for T-bills such as $10,000 minimum? Also, is it exempt for taxes. I believe for CD's in California it is taxed at my ordinary income rate which is close to 10%.

T-Bills are subject to federal taxes as ordinary income, but are exempt from state/local income taxes. Offhand, I don't know about minimums though....

[disneysteve]

T-Bills are subject to federal taxes as ordinary income, but are exempt from state/local income taxes. Offhand, I don't know about minimums though....

They are sold in $1,000 increments. I think that’s the only “minimum”.