OT- high yield savings accounts

[MikeD]

Originally Posted by smontanaro

I think the SIPC will cover your money market account (up to $500k), though you should double check with Fidelity.

It is.

[Ralph]

Originally Posted by pinkshogun

Why is that, Ralph?

Because interest rates are always quoted in annualized rates. As if it paid that rate for the full year. 8 months is 2/3 of 12 months. On a $10,000 5% CD for 8 months, you would receive at end (or however they pay it), 2/3 of $50. They really figure it by the days, but 2/3 is an easy way to describe it. I see 6 mo CD's quoted regularly at decent annualized rates, with no explanation that for 6 months you will only receive 1/2 of 12 months interest.

[pinkshogun]

Thanks Ralph. I think you mean 2/3 of $500. a bit deceptive on the banks side but i sure its in the fine print. Is that what APY sorta means

[Ralph]

Originally Posted by pinkshogun

Thanks Ralph. I think you mean 2/3 of $500. a bit deceptive on the banks side but i sure its in the fine print. Is that what APY sorta means

Yes...and thanks for catching my mistake.

[Tony T]

Originally Posted by Tony T

2 Yr stabilizes, back up to 4.375%

And back down to 4% as European Bank Stock fall.

[verticaldoug]

Originally Posted by Tony T

And back down to 4% as European Bank Stock fall.

Getting crushed on term structure on bonds or even longer dated commodities is the oldest blowup in the world.

Investors and Regulators are just waking up to the fact that in order to meet quarterly earnings reports, bankers and insurers where piling into longer dated bonds to increase cash flow.

When you have years of short dated paper being issued at 101 to get back 100 a year later, something had to give.

This is paying the piper for that excess. The real irony here is in theory the longest dated bond is really equity. So at some point if long dated gets liquidated, equities should get killed.

[9tubes]

It doesn't appear that the regulators could have been surprised by this. The problem goes back a year.

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[Clean39T]

Originally Posted by 9tubes

It doesn't appear that the regulators could have been surprised by this. The problem goes back a year.

[KarlC]

A credit union is now offering up to 7.00% APY on a CD, and rates from big-name banks aren't far behind

https://www.businessinsider.com/pers...y-today-2023-4

.

[MikeD]

Looks like iBonds might not be a good investment any longer. Seems the yield might be adjusted to below 4%. That didn't last long.

[NHAero]

Originally Posted by MikeD

Looks like iBonds might not be a good investment any longer. Seems the yield might be adjusted to below 4%. That didn't last long.

Thanks for posting that. Guess I'm not getting more this year!

[verticaldoug]

Time to buy the longest bonds of Apple 2060 and MSFT 2060. Both trade about +70 over treasuries so you get 4.35% ytm

[NHAero]

Originally Posted by verticaldoug

Time to buy the longest bonds of Apple 2060 and MSFT 2060. Both trade about +70 over treasuries so you get 4.35% ytm

Please say more why this is your recommendation. Thank you.

Edit: just looked at these. Can you tell why MSFT is rated AAA and Apple AA?

[echappist]

Originally Posted by verticaldoug

Time to buy the longest bonds of Apple 2060 and MSFT 2060. Both trade about +70 over treasuries so you get 4.35% ytm

Btwn the AAA-rated corporate bond from MSFT versus the AAA-rated bond issued by the likes of Harvard, which would be considered less risky? Both has comparable current yield and YTM.

The 2060 MSFT corporate bond is issued as make-whole callable, with first call at 6 months prior to maturity. The bond is listed as senior debt. 2.675% coupon, currently with a bond price of ~$69.

The 2056 bond issued by Harvard is issued as make-whole callable, with first call at 6 months prior to maturity. The bond is listed as senior debt. 3.30% coupon, currently with a bond price of ~$81.

[NHAero]

Originally Posted by echappist

Btwn the AAA-rated corporate bond from MSFT versus the AAA-rated bond issued by the likes of Harvard, which would be considered less risky? Both has comparable current yield and YTM.

The 2060 MSFT corporate bond is issued as make-whole callable, with first call at 6 months prior to maturity. The bond is listed as senior debt. 2.675% coupon, currently with a bond price of ~$69.

The 2056 bond issued by Harvard is issued as make-whole callable, with first call at 6 months prior to maturity. The bond is listed as senior debt. 3.30% coupon, currently with a bond price of ~$81.

Where does one even find the Harvard bonds? I don't see them listed at Fidelity, for example.