High interest rates were nice while they lasted

[disneysteve]

High interest rates are bad as a borrower but great as a saver. Being the latter, I was really enjoying that period of 5+% interest on CDs and Treasuries. You can still snag 5% on some short term stuff but I've got a ladder going out through 2026 so as issues mature, I'm now looking at 2027 and those rates have come down quite a bit. I just bought a Agency bond maturing in March 2027 for 4.179% I also bought a Treasury maturing at the end of this year (12/26/24) and even that is only at 4.812%. The money market is actually higher than that but it's only a matter of time before that comes down, especially once the Fed lowers rates which is expected to happen 2-4 times this year. I'm sure that in 6 months, I'll be happy I locked money in but right now it's kind of sad. We still have stuff going out as far as 9/26 paying between 4.9 and 5.3% so we'll get to enjoy those high rates for a couple more years thanks to the ladder I built.

[Drake3287]

Yep, we all knew this would happen at some point, enjoyed it while it lasted. Of my 7 large CD's paying 5%+, I only have one maturing in the near future that'll still hopefully be in the 5% range. Synchrony Bank still has a 15 month at 5.50%, be interesting to see how long that one lasts. As a side note, it would be interesting to hear how much taxable interest people made last year with these higher CD's. I'm looking at $30k+ or so in taxable interest income. Luckily I started paying quarterly taxes last year so hopefully no big hit when I do my taxes later.

[bjl584]

Falling rates should make equities paying dividends more attractive to people with an appetite for risk.

[srblanco7]

The 5%+ on short term rates was nice while it lasted. I'll be interested to see where rates land after the Fed runs implements the predicted rate cuts in 2024.

[srblanco7]

January's CPI came in somewhat hotter than expected. Seemingly, higher rates will stick around for a bit longer.

[ua_guy]

Much of the increase was due to higher shelter prices which make up roughly 1/3 of the CPI. Rent, rent equivalent for homeowners, homeowner's insurance, and lodging away from home are the 4 categories that make up shelter prices. Energy was down. Food was just slightly up... still feels like things are headed in the right direction even if it takes a little longer.

[skives]

I’m still getting 5%+ on 4 week T Bills through treasury direct. This where I currently have my EF. debating whether to switch it to $1,000 5 year CDs before the upcoming rate cuts.

[disneysteve]

I’m still getting 5%+ on 4 week T Bills through treasury direct. This where I currently have my EF. debating whether to switch it to $1,000 5 year CDs before the upcoming rate cuts.

After today’s Fed announcement rates may start slipping. Hopefully not too quickly as we have a $100,000 bond maturing at the end of the month that I’ll need to reinvest.

[crazyliblady]

High interest rates are bad as a borrower but great as a saver. Being the latter, I was really enjoying that period of 5+% interest on CDs and Treasuries. You can still snag 5% on some short term stuff but I've got a ladder going out through 2026 so as issues mature, I'm now looking at 2027 and those rates have come down quite a bit. I just bought a Agency bond maturing in March 2027 for 4.179% I also bought a Treasury maturing at the end of this year (12/26/24) and even that is only at 4.812%. The money market is actually higher than that but it's only a matter of time before that comes down, especially once the Fed lowers rates which is expected to happen 2-4 times this year. I'm sure that in 6 months, I'll be happy I locked money in but right now it's kind of sad. We still have stuff going out as far as 9/26 paying between 4.9 and 5.3% so we'll get to enjoy those high rates for a couple more years thanks to the ladder I built.

I am getting 5% on a high interest savings account.

[disneysteve]

I am getting 5% on a high interest savings account.

Our Vanguard money market is still paying 5.27%, which ironically is more than the bond that's maturing on 3/31 which is paying 4.849%. That said, when that bond matures, I'll still reinvest the money even if the rate is a bit lower because I'd rather lock it in for a couple of years knowing full well that rates are going to start falling sometime this year. I may lose a little in the short term but a year or so from now, locking in 5% or high 4% range is going to look sweet.

[Drake3287]

All my six of my CD's are locked up for awhile at 5+%. Next one won't come due until just after the Fed meeting in September. Like the topic says, it was nice while they lasted. I just wouldn't heart broken if inflation continued to rise just a little for awhile.

[crazyliblady]

My high interest savings is still paying 5%.

[disneysteve]

Looks like I was a little premature with this thread. Over the past week or so I've been reinvesting some excess cash sitting in money markets and still getting 5+% for as long as 5 years.

I bought an agency bond that matures in 2039 but is callable in 2029. That's at 5.082%. I'm kind of kicking myself for not getting more of that. I have to check if it's still available. 5% for 5 years is a steal right now.

I bought an agency bond that matures in 2026 at 5.116%.

I bought a short-term CD that matures in 1/2025 but is callable in 10/2024 at 5.4%. That's just to hold onto some short term cash and it's a little better than the 5.27% of the money market plus it's fixed in case rates drop.

[LivingAlmostLarge]

i should probably move our cash out of our capital one money markets earning 4.25% but it's hard to tie it up when it's sink funds and taxes fund and stuff I see myself spending in 6 months. It's where i park our property taxes paid out every 6 months or auto insurance and life insurance once a year.

[kork13]

i should probably move our cash out of our capital one money markets earning 4.25% but it's hard to tie it up when it's sink funds and taxes fund and stuff I see myself spending in 6 months. It's where i park our property taxes paid out every 6 months or auto insurance and life insurance once a year.

I was in the same situation ~last year. We had over $70k sitting in savings earning relatively little. $35k of that was sinking funds for travel & our next car purchase. I ended up moving that $35k into our brokerage MMF & standard investment mix, thinking that we can always pull it out if/when needed, but otherwise let it grow a little better. I think the side-effect has been that I'm more inclined to find a way to pay for that stuff (travel, at least) out of our normal income stream Rather than pulling from investments, even though the money is still earmarked as sinking funds.