OT- high yield savings accounts - Page 4

MikeD · #46 10-22-2022, 12:45 PM

Quote:

Originally Posted by Ralph

It's important to understand that when you see a 3 month CD listed at 3.95% ....or whatever rate....that's an annualized yield...as if it was there for 1 year. For the 3 months....you would get 1/4 of that for the 3 months. And if you constantly roll over short term CD's, you don't earn any interest for the day or two (or 3) you miss switching to the the new CD.

As being retired from the brokerage industry.....would suggest you treat short term savings totally different from longer term investment funds.

I saw these ladder CDs on Fidelity. I'm unfamiliar with them. Can you explain?

smontanaro · #47 10-22-2022, 02:20 PM

Quote:

Originally Posted by MikeD

I saw these ladder CDs on Fidelity. I'm unfamiliar with them. Can you explain?

Investopedia has a pretty good explainer:

https://www.investopedia.com/terms/c/cd-ladder.asp

Tz779 · #48 10-22-2022, 02:59 PM

Quote:

Originally Posted by KarlC

Yes this is true, I had to open a 2nd account and move the money into the account that is now .....

CIT Bank is at 3% for their Saving Connect account now.

https://www.cit.com/cit-bank/bank/sa...onnect-account
.

Really?! Those bastards!

NHAero · #49 10-22-2022, 05:13 PM

Quote:

Originally Posted by Tz779

Really?! Those bastards!

Exactly what happened to me!

Some types of businesses value longstanding customers and some disvalue them. In the latter group I put insurance agents / cable providers / banks / propane dealers / and web site hosting services.

As an example, I've been with Pair.com for over 20 years. Recently, which makes it twice in less than one year, I have migrated my account to a new one that costs less and has more storage / bandwidth /features. But they weren't going to tell me about those.

The characteristic of these businesses is that better deals are available for new customers than existing customers, and the way to deal with them is to check periodically what they are offering new subscribers.

Ralph · #50 10-22-2022, 07:19 PM

Quote:

Originally Posted by smontanaro

Investopedia has a pretty good explainer:

https://www.investopedia.com/terms/c/cd-ladder.asp

Yes....that's how it works. You can also (depending on your personal situation....risk tolerance, tax brackets, etc) ladder other investments. Corporate bonds, municipal bonds, treasury bonds, etc. The idea is in a few years you are collecting the higher rates on all your money, with one maturing every year if you need some liquidity.

I did this with municipal bonds for clients before I retired. The advantage with CD's is you can purchase in relatively small amounts. It's hard to get a good price on small purchases of municipals. Just understand that all interest rate products are quoted in annualized yields.

Tony T · #51 10-28-2022, 01:46 PM

I Bonds Sales Surge as Deadline Approaches for Interest Rate Drop

A flood of cash is pouring into I bonds before their interest rates drop next month.

Americans have bought more than $1.95 billion worth of US Series I savings bonds this week alone — twice as much as during all of fiscal year 2021, according to the US Department of the Treasury.

I bonds, which are meant to protect investors from inflation, have become one of this year’s best-performing investments as the broader stock and bond markets get hammered by the Federal Reserve’s rate hikes. The rate is currently 9.62%, but is expected to drop to 6.47% next month.

smontanaro · #52 10-28-2022, 02:18 PM

Quote:

Originally Posted by Tony T

The rate is currently 9.62%, but is expected to drop to 6.47% next month. [/I][/INDENT]

Which still ain't too shabby for a low risk (risk free?) investment.

Tony T · #53 10-28-2022, 03:01 PM

Quote:

Originally Posted by smontanaro

Which still ain't too shabby for a low risk (risk free?) investment.

Yes, good idea to buy to the limit allowed every year

zap · #54 11-02-2022, 02:41 AM

New I bond rate is 6.89%.

ScottW · #55 11-02-2022, 08:53 AM

^^^ Which includes the 0.40% fixed rate component for new bonds purchased today. The huge number of people who bought their I bonds in 2021 and earlier this year when the fixed component was 0.00% will "only" be getting 6.48%. Still beating typical savings/MM/CDs for now.

https://eyebonds.info/ has some useful tables and calculators that show your returns 6 months out based on when you bought the bond.

Tony T · #56 11-03-2022, 09:55 AM

2-Yr notes at yield of 4.7, 10 Yr at 4.16, and with the Fed signing that they’re not done yet, good time to participate in the auctions. 10 Yr announced yesterday.

OT for this thread, but worth a thought for a longer term investment that pays quarterly interest. Don’t buy if you can’t hold to maturity, otherwise there is a risk of a loss.

NHAero · #57 11-03-2022, 10:32 AM

Quote:

Originally Posted by Tony T

2-Yr notes at yield of 4.7, 10 Yr at 4.16, and with the Fed signing that they’re not done yet, good time to participate in the auctions. 10 Yr announced yesterday.

OT for this thread, but worth a thought for a longer term investment that pays quarterly interest. Don’t buy if you can’t hold to maturity, otherwise there is a risk of a loss.

Yup, some bonds and CDs I bought are already dropping in value with the rate hikes, but they will pay the interest so hold to maturity.