That’s a shame. Using such techniques allowed me to retire at 36 years old. Maybe you should rethink it. Dividend income is also taxed significantly less than interest income.
I disagree. But we are off topic. Let me know how you’re doing when you reach age 80.
Sure thing. We can celebrate your 110th birthday at the same time.
Ken over @ Deposit Accounts in his 08/06 blog entry indicated he expected 3% cd’s of any term to vanish in the near future with only a possibility of the occasional “special”. So if the rates go to 2% or 1% you will continue to place them in cd’s? Heck he mentions getting down to a 0% rate. How low is to low? What are the contingencies? Is that still off topic?
Not at all and I appreciate your post. I have added you to the guest list for my 110th birthday blowout bonanza!
But seriously:
First of all I hope Ken is in error . . . but he certainly could be correct! I am currently fortifying my position both in 3.5% CDs and in the realm of add ons as well at 3.3% (GTE). I also have other add-ons yielding at least 3%, some higher. There is nothing special about what I’m doing. I suspect most savers are doing the very same thing in anticipation of the impending “storm”.
If I’m wrong and rates instead go to 4% and higher, I will be fine, too. Would rather not go into detail on that aspect, though.
Oh sure…I think we are buying in where we can…the problem comes when you have 8 month, 17 month, 24 month etc cd’s that look like they are going to mature right in the middle of an interest rate drought. In some cases it may even be worth considering breaking those so you can put them in those 5 year 3.5% cd’s still available.
For those that can’t do that though it’s at least worthwhile to mention alternatives hence the dividends comment and I suppose peer to peer lending companies like lendingclub would also be an option. My experiment of putting funds in them and just cashing out the “payments” to calculate the REAL return after defaults etc was a 4.79% return which is 1/2 what they claim you will earn but still a really good rate for now. Of course just like long term cd’s you have to be prepared to have that money tied up for years. It took 2 years for the majority to pay out. You always have the option to sell them but just like a cd penalties you are not going to get full value.
Ok Moving on.
Offended? Not in the least. But this is my thread and the topic here is CDs. I like to keep the discussion on topic. That said:
Is there room on a Finance board for a thread devoted to alternative types of investments . . . something other than certificates of deposit? In my view there is a crying need for such a thread.
Q: Shin, if you believe there is a crying need, why do you not start the thread yourself?
Easy answer. Such a thread should be started by a contributor here who is interested in the topic and participates in those other sorts of investments. I qualify in neither regard. I am the wrong person to start such a thread. I can think of at least one participant here who does qualify, though.
Such a thread could be entitled: “Alternatives to CDs”. It would serve the needs of persons who have become disillusioned with certificates of deposit or who simply are fed up with low and declining CD interest rates and are seeking safe alternatives.
Meanwhile, I will appreciate posts here which are on topic and relate to investing in CDs. Thanks.
And now back to our regular programming: Certificates of Deposit.
Pleased to report this morning that, against all odds, both the NFCU and the GTE “gift horse” certificates remain available. People are wondering how much longer this can go on. I am wondering the same thing. It is strictly day by day.
I will be opening a new NFCU 5 year today. I’m too cheap to wire funds, so yesterday I telephoned NFCU and spoke with a rep in their certificates department. I asked the question you would anticipate: will the deal be alive tomorrow? I explained I was having to break CDs elsewhere and ACH the money, so it would not arrive until tomorrow, which is now today.
The rep, as you would expect, declined to offer any promises. However, she did tell me three things:
- She is doing the five year deal herself.
- She had heard no rumors or scuttlebut about the deal dying.
- She would risk ACHing the funds if it were her.
That was good enough for me, I ACHed the funds, and the gamble has paid off. Life is good.
ETA
Just a very brief point of clarification before someone asks:
I was truthful when I told the NFCU rep that I would be breaking CDs. However, I did not mention that they were NPCDs. 
Ken has posted regarding negative interest rates, which of course represent a threat to savers:
Ken’s post regarding negative interest rates
For anyone unclear, because this is pretty weird:
Normally the financial institutions pay you interest when you surrender your funds to them for a time. With negative interest rates, you pay the financial institution to safeguard your funds for whatever period of time you choose to surrender them.
I am an American who has spent his entire life living stateside. In all that time I’ve never encountered negative interest rates here. But they are happening in Europe now.
ETA
Yet another post here . . same topic. Scary stuff for CD enthusiasts.
I do not wish to hear this message. I have a slew of CD’s that will be maturing in 2020. Sad news!!
On the other hand, you continue to insist on discussing no penalty CDs in the liquid rate thread…
(And just to preempt your response - no, they’re not the same, you need to actively close the CD and move the money to a liquid account before you can access the funds, even if there’s no penalty for doing so.)
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Technically not, but practically we see it all the time. Except instead of being stated as a negative interest rate, they’re called “monthly maintenance fees”. Plenty of people keep money in accounts paying zero interest and charging a monthly fee. That serves the same purpose of “paying them to safeguard your funds”, and if included in the calculation results in a negative APR.
A little bird told me that it’s possible that NFCU’s 3.50% APY 5 year CD offer may end on 8/18/19
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I hope you’re wrong turtlebug.
My USAlliance CD matures 8/28. My plans include NFCU’s 3.5% 5 yr CD offer to be continuing. 
You bet I do. And I will continue to do so. NPCDs are, for all practical purposes, liquid.
Here, on this thread, we discuss CDs which require payment of a penalty if you want your funds prior to maturity.
I do concede that for the first few days, NPCDs are in effect illiquid. But thereafter they are totally convertible to cash straightaway. Just did several myself yesterday. It took literally only seconds for me to access my money, including all interest.
This is simply wrong. I just did this yesterday. The funds went straight from my NPCD account at PurePoint to NFCU. Those funds were never in a liquid account aside from my NPCD, unless you mean my NFCU checking. And I do not think that is what you mean.
Perhaps other banks do this differently. I dunno. But at PurePoint, when you want to clean out an NPCD, the funds go straight to their destination. It’s nice, because you do not take a Regulation D hit to your PurePoint savings account.
Argyll I assume you are thinking of me, I’m flattered, and I appreciate the respect. It is fun to think that I, a mere flyspeck in the overall scheme of things at $90B NFCU, could have any impact whatsoever on their thinking in this regard. Head is swelling. Gonna need new, larger, hats.
Thank you, turtlebug, for posting. Your post the most important one here recently. I do not know what we all will do when the NFCU gift horse 3.5% CD expires. I’m unaware of its equal anywhere else.
I’ve done about all I’m able to do at NFCU . . . considerably more that I originally thought I would do. But I find myself unable to conjure a scenario in the upcoming years where CD rates will reach even 4%.
If anyone has a good CD alternative to the NFCU CD, please post. I’m afraid the upcoming good CD drought could be a long one.
The rep I just spoke with (I’m having funds moved to Ally that should arrive tomorrow so they can initiate a draft from the navy fed side. I wasn’t just calling for the heck of it.) said she was unaware of anything changing before the end of the month. I did ask her to notate my account. I already have cd’s with them so I’m putting more funds in one place then I really like but the other’s are short term cd’s and as mentioned I’m locking in the 3.5% while it’s available. The only other ones are of course the GTE ones and I setup both of those for additional deposits. Other than that the rates are pretty much already “high and dry” with the possible exception of the 84 month cd at Andrews that is paying 3.45%.
then maybe you should do what several people have already recommended…open the cd and tell them you are mailing a check. This would lock the rate for 30 days provided you DID get it funded in that time period. The one you said was maturing was within that window.
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This is excellent counsel, famewolf. I should have thought of it myself but I did not. But yes, of course, she would have 30 days with privilege of opening the CD, but not the obligation to do so in case NFCU remains alive when her funds arrive and that becomes her choice.
I am in that situation at present, just five days into my 30 day window. My money is tied up at PurePoint for only a few more days after which I will slingshot it to Grow. Thence plan is to snail mail a Grow Promo MM check to GTE to complete funding and opening of my 3.3% add on. Will do all I can to ensure that check arrives on a Friday. Do plan to follow through on my commitment to GTE, and not give the money to NFCU even if available, because I want to be able, in future, to add on at 3.3%. Hope that will be a bridge over troubled waters going forward, worth even more than the 3.5%.
With a Rising Bank CD you can put a floor under your yield for up to $0.5M of your money for three years. It’s a $25K buy in so quite steep. And the yield is only 2.5% APY. But it’s an add-on and it’s not GTE:
Note: Rate is not high to begin with and has been falling. If you want it, better move quickly.
Q: Shin, are you in?
Not at this time. With a lower buy in, even a few thousand, this would be a no-brainer in the current interest rate environment. But with price of entry at $25K, well, not for me so far. It’s one of those CDs I’ll probably wish I had in a couple of years when my add-on deal at GTE collapses. 
Q: Huh? Collapses?
I did USCU way back, and Valor more recently. Enough said.