I was merely trying to point out, especially for readers here who might not have that option available, that a 3.25% add-on is not necessarily the bed of roses it might at first appear to be. Even with a 3.25% APY CD, with the forward interest rate uncertainty today, there are concerns.
Going forward, and waiting a short while to see how things unfold, I might take a portion of my CD money and follow pattyb53’s approach. Like her, I am also fortunate to have that Keesler HIMMA Plus option available. There will be an informational convergence as we move into 2022, to wit:
We will learn whether or not Keesler will continue to make HIMMA Plus available, and
We will learn whether or not Powell gets a second term as Fed Chairman
These two things will become known at more or less the same time, or at least in the same general time frame.
Finally I would note that rising inflation mitigates in favor of HIMMA Plus continuation. But it is not alone determinative. Business conditions also enter into the consideration.
Of course. And I was also just trying to point out that patiently sitting on cash will [relatively] quickly cost you more than you’ll ever gain from waiting.
Again, I have no argument with your thinking. You are correct.
But I still recall trying to survive, and invest wisely, back in the early 1980’s when inflation just took off. I once owned some 20 year munis (I was into muni bonds back then) paying 11% YTM (yield to maturity).
When it comes to interest rates going forward, there are a lot of known unknowns around now . . . . not to mention the unknown unknowns!
It’s mostly off topic. So I will be brief. But I have an admission:
I bought those bonds only hesitantly, and with concern. At the time interest rates appeared to be unbounded on the high side.
I guess interest rates generally are on topic here. Nobody should ever listen to any interest rate forecast I might make. I have no more clue now than I did back then, and I struggle a lot trying to plot a course forward.
When a large CD matures, how to move the money out is always something requiring a lot of thought.
I had a fairly large CD mature last Sunday, the funds becoming available to me early Monday morning. I telephoned the financial institution when the call center opened and wired the funds, all of them, to where they were going. It cost me $15 to accomplish this. Everything went off without a hitch, my funds were at their destination before noon, and I could move on to other things.
[Explanatory note: As is often the case, I was not permitted by the receiving financial institution to wire the funds straightaway into the account which was their true final destination. I instead had to designate a savings account in the wire instructions. Thereafter I needed to telephone that same financial institution and request the funds be moved into the CD account where I wanted them to be. And of course I could not call until my funds arrived in the first place. So a higher level of attentiveness was needed than otherwise would have been the case.]
For a large CD, the wiring fee is well worth it to quickly move the money.
For my PSECU CD that will mature in September, I plan to write a check and deposit to my Fidelity account. At the same time, I will use Fidelity’s same-day ACH to move the money to the destination.
Interesting. If you are writing about a paper check I’m surprised Fidelity will make the funds available to you straightaway, with no hold whatsoever imposed.
Briefly, wire requirements are quite variable depending on the particular financial institution. You have to prepare in advance and be certain to comply with whatever special requirements and conditions they throw at you. For example:
In order to facilitate that wire I mentioned I dispatched earlier this week I needed to, a couple of weeks back, first visit a branch of my financial institution, sit down personally with a rep, provide a telephone wire password, and sign a form. That signature was then notarized by the rep, who happened to be a notary. But that notarization was a requirement.
Not all financial institutions require all that stuff. Actual requirements vary widely and you have to ask about the rules for dispatching funds via wire and then comply.
I knew in advance, obviously, when my CD would mature. That was my deadline for completing preparation to send the wire. Having followed in advance all of the financial institution’s rules for wiring funds, the actual dispatch of the money went quite smoothly. I was able to complete the entire transaction from home by telephone.
Are you saying you had a personal meeting with a rep? I actually don’t reside in the city of any of my CD accounts.
In past times people talked about flying to cities in order to obtain a high percentage rate CD.
I think I must be reading your post incorrectly shinobi. I don’t know where you live but I’m sure it’s not near Biloxi, MS. I thought you were talking about Keesler FCU. Maybe I’m wrong, but I thought you lived in the city in the NE NEIGHBORHOOD.
I did meet personally, at a branch, with a person who works for my financial institution. It was not Keesler. It was a different financial institution.
I did not have to go in person. They would have sent me the forms and I could have signed, on my own, before a notary.
Most important, again, remember different financial institutions have vastly different requirements to qualify for wiring money. You MUST make inquiry, preferably in advance of when you actually will be needing to use the service upon maturity of your CD. If you wait until the last minute: expect trouble.
