CD Discussion Thread

Ya got guts, glitch99. In a similar situation a few weeks back I didn’t have the cajones to pull that stunt.

Am happy it all worked out. Good for you and congrats!!

Yes MACU is wonderful! I have a 2.4% 5 year add on with them that has 3.5 years left. Only bad thing is their add on CD’s are limited to 100k. I will be maxing that out once my PSECU add on expires in late 2022 which will give me 2 years at 2.4%. I still have $600 a month going into PSECU. Sure wish I could increase that but once you decrease you can’t increase with them again.

{For owners of GTE Financial CDs only}

NHL news is wildly off topic here, except that:

Your Tampa Bay Lightning hockey club is set to repeat as winner of the Stanley Cup. Florida has two coasts. On the east coast condos are collapsing. On the west coast Tampa, the City of Champions, is about to take out the Province of Quebec in its entirety. It’s a rout, at least so far. And this coming fall TB, the GOAT, will return as QB of Tampa’s NFL champion football team.

All this is highly constructive and uplifting for the Tampa region en toto. It is no wonder, perhaps, that the GTE rating at Weiss was just upgraded. The Tampa locale is a fun place to live and a positive setting for GTE’s success going forward.

Update

Lest anyone think I’m pushing ice hockey here, I’m not. I’ve not watched a single game of the playoffs so far, though I do plan to watch this evening and root for Tampa Bay, home of my GTE CD money.

But there is a contretemps between our Tampa Bay Lightning coach and (of all people) the MAYOR of Tampa Bay itself . . . who is a woman. She wants our team to LOSE in Canada this evening . . . on purpose. She wants the Lightning to throw the game!!

Tampa Mayor advocating for Lightning to lose tonight . . on purpose!

Because I have CD money on the line in Tampa, at GTE Financial, this has caused me to research that Mayor.

This is not a political thread and I will not be sharing my thoughts. Also, GTE Financial serves a wider area than just the City of Tampa. But because my GTE CD is an add-on, so far uncapped, it is my opinion that I cannot know too much about what is happening in the Tampa Bay region. Right now, for example, I’m keeping an eye on that darn hurricane.

Saint John’s Parish (SJP) FCU is offering a seven year CD paying 2% APY.

Anyone may join this very small credit union which is rated five stars by Bauer and “A” by Ken.

Link to SJP rate page

You need at least $500 to get your CD account open.

Because this is a small credit union I doubt this deal will endure for long if they become swamped.

ETA

Can that be right? It says CD dividends are paid only at maturity!

Wonder how they square that with the tax man. Anyway, be careful.

Yikes! If it were an add-on, I’d be in for openers, but I can’t imagine interest rates staying this low for two more years, much less seven.

And before anyone says anything, my imagination is never wrong, or my recollection of it. :laughing:

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If you do not currently belong to any of these organizations you may qualify for membership by joining the Buffalo Sports & Wellness Association (DBA Healthy Buffalo). Click here to become a member. By clicking the link, you will leave the SJP website and be redirected to a third-party.

^^^^ Healthy Buffalo? WHAT?! If I join, do I have to stop eating buffalo wings? Not gonna happen! How dare these people in the same city that created the famed wings.

:water_buffalo: :money_with_wings:

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Nobody else has picked up on this so I will. I’m not familiar with longer CDs that pay no interest until maturity. This is my best understanding of how the tax laws work and be aware I could easily be full of prunes on this because I’m not sure:

My understanding is that you must pay tax yearly on CD interest, even if you do not actually collect that interest, if you could have or were entitled to collect that interest. So if you have collectable CD interest that you intentionally allow to compound instead, you must pay tax yearly on that interest amount.

Less clear to me is what happens if the financial institution flatly denies, and disallows, you the right to collect your CD interest . . . . and might not even be declaring your interest so you would know how much it is.

Of course if SJP FCU is sending the IRS a 1099-INT each year then it’s really clear that you must pay tax yearly.

But it they’re not sending a 1099 until your CD matures . . . . . . . . . Hmmmm.

I go by whatever is stated in the 1099 since that is what the IRS is given and knows. Imagine the worst case scenario. You report the accrued interest which is not credited to your CD, and that interest is not on the 1099. When the CD matures, the ensuing 1099 will show the total interest. But you have already reported the interest as it accrued, so you’re going to have to explain to the IRS that you have paid tax on part of the interest unless you want to pay tax again.

They do send a 1099 for the interest accrued for the year. I have another with the same terms at another bank.

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The above was posted here two weeks ago.

Sorry to report this:

That was then. This is now. Things have changed BIG time.

SJP FCU has closed this deal to everyone except for persons living in NY State.

Let’s face fact. It’s a small credit union and where else you gonna get 2% APY these days.

If you wanted this deal, jumped on it and got it, congrats. It’s too late now for most people. :slightly_frowning_face:

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It would be very hard to buy a 2% CD for 7 long yrs. Someday I may be in this situation, but I truly hope to god rates will be significantly higher before I ever have to make that decision.

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Ken has just gone up with an interesting NPCD. You need at least $500 to play, and the limit is just a single penalty-free withdrawal.

Beyond that, I cannot compete with Ken’s excellent write ups so I will instead give you the needed link:

Ken’s new NPCD deal

You really think this is a good deal? The rate is .62%. I am almost getting this from my cash accounts. No way I am going through the hassle of opening another account for a few basis points. We’re talking about maybe another $100 over the course of 13 months. I’m not that desperate.

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I am grateful for the question. Thank you, goldendog, for asking. This question offers me opportunity, once again, to remind participants here of the following:

Anyone is permitted to post CD deals here and all are encouraged to do so. When I post a deal please do not think it’s also a personal endorsement or something in which I myself am participating. These days especially, most often, it is not. But I am aware of the varying financial circumstances of those who read this thread. I well realize what might be a doggy deal for me could be the best another reader can do. And this thread is not just for people in my special circumstance. It is for everyone . . . . or at least that is the goal here.

So please feel free to post deals which, though they might not work for you, could nevertheless end up helping someone else. And I will do the same. Thanks

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Federal Reserve Chairman Jerome Powell just warned that the risk of inflation “could turn out to be higher and more persistent than we expected” following a decision to keep the interest rate unchanged for now.

So where does this leave us savers who invest in certificates of deposit? This is only my opinion and, as always, I could be full of prunes:

I like the strategy being used by pattyb53. She is keeping her money liquid while still earning 1.5% APY on her funds. Is that not a better idea than, for example, locking into a seven year CD at 2% APY?

Of course not everyone has that 1.5% uncapped liquid funds option. If your available option is poorer it mitigates in favor of locking in a higher rate using a CD. But I would be hesitant to tie money up for an extended length of time, given this announcement by Chairman Powell. My hesitation would be mitigated somewhat if your chosen CD’s early withdrawal penalty is not too severe.

Bottom line it is a most difficult time for us savers. Good options have mostly evaporated. On a personal note:

I am fortunate still to have available to me 3.25% APY options using add-on CDs. But with inflation running north of 4%, all this means is I’m losing money more slowly than others who lack this option. Also, importantly:

By using those add-on CDs I am locking up my funds until 2024. By then, or well prior, prevailing CD interest rates could easily exceed 3.25% because of runaway inflation. I can certainly respect anyone who thinks it is a better idea right now to keep your funds liquid and available!

I mostly agree with what you’ve said, with one caveat - putting money into your add-on CD, it’ll only take about a year for the extra you earn (over liquid rates) to offset many early withdrawal penalties. I understand the inclination to consider CD money locked up (I generally feel the same way), but it really isn’t - you’ll just have to give back some of the higher interest you have earned, to get the money early.

There’s also the laws of averages - getting 3.25% for the next 3 years can net you more than getting 1.5% now and 5% two years from now. Your earning rate would have to go up 1.75% over 18 months, and another 1.75% the following 18 months, for that 3.25%/3yr CD to become the worse deal.

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I have a PSECU 24mo CD coming due early September. Slim pickings on CDs so the money will probably go into a MYGA.

Agreed, glitch99.

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:

  1. We will learn whether or not Keesler will continue to make HIMMA Plus available, and

  2. 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. :slight_smile:

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! :grinning: