CD Discussion Thread

Finance
2542

I look forward to a day, and this will happen before Thanksgiving, when a very large (for me) 3% APY core CD will finally mature. Thereafter all my core CD holdings will be paying anywhere between 3.25% APY and just over 4% APY. That three percent short timer is my dog.

That’s the good news, a very small uptick in my overall CD portfolio APY is not far away.

The bad news is that this otherwise happy event means I will be losing buying power at a very slightly slower rate, as the current 5+% inflation tax erodes my nestegg faster than I safely can replenish it. Insured CDs paying up to 4% APY were looking somewhat sweet only a short while ago. No longer.

Full disclosure

I do plan to take a portion of that maturing core CD money, mentioned above, and redirect it into my side hustle, which coincidentally also is propelled by CDs. That side hustle CD money returns a minimum of 8% APY, and these days that is what it takes to deal with “circumstances” and avoid losing buying power. And those side hustle CDs, like all of our credit union CDs, are fully insured by the NCUA.

2543

Same here… so sad, 3+% CD’s starting to mature. I realize high inflation rate is probably going to last through 2022, maybe longer. Breaking or loosing money everyday is terrible.

Maybe I should try your hustle? Lots of work! But reading of your endeavors makes it sound interesting.

Would you mind giving out some of those “hustle” ideas?

2544

Hi shinobi, you are suggesting that you have a better CD than the 3% CD maturing before Thanksgiving for some of the proceeds. Are you referring to the legacy add-on CD at 3.25% or do you have some other great deal we are not aware of?

2545

I wish. Rest assured if I had a current great CD deal I would already have posted it here. That’s what this thread is all about.

But sadly, no. Most of those maturing core CD funds will be heading into existing add-on CDs opened a couple of years ago (thank goodness) and no longer available to all. I’m “good to go” for another three years (plus or minus) following which, unless things turn around interest rate wise, I’m in a world of hurt.

Course with inflation currently at 5% (again, plus or minus) it could successfully be argued that I’m already in a world of hurt. We all well remember the beating we CD fans took between 2009 and 2017. I hope this current disaster is shorter lived.

But throughout my life I’ve never been able successfully to predict where interest rates are gonna go. Wish I could. One thing for certain: they cannot get a whole lot lower!! :slightly_frowning_face:

2546

Already done, pattyb53 . . . in excruciating, seemingly never ending, detail! But not here. This is not the place to be discussing that.

Admittedly my side hustle does involve use of CDs; ones having terms as short as I’m able to locate. However, such CDs are not of interest to fans of this thread. It has been a while since I have posted on my side hustle thread because there is not much new stuff happening in that realm. But if you want to learn how to make money with short CDs, here is a link to that other thread:

Linky

Good luck.

ETA

I just re-read the above and I hope it is not too harsh. Just want to keep detailed side hustle discussion out of this thread. Rest assured if anyone has questions about my short CD side hustle, please ask them on the other thread and I’ll do my best to respond if I’m able.

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2547

Ken today featuring a CD which might be of interest to some participants here. It’s a somewhat complex deal but suffice it to say we are talking an APY of over 2% and two allowed bumps up. Rather than try to present all the details here I will, instead, provide you the link to Ken’s deal:

Ken’s Great River CD deal

I want to close by reiterating Ken’s warning that the bumps might be worthless. This applies to any CD having an oddball term and offering bumps. It’s the oldest trick in the book and many CD purchasers are wise to it by now.

Otherwise this appears to be a highly competitive deal.

2548

Best deal I have seen in the last two years, but not for me. 2.18% for 63 months is too low. To go out that far I need at least 3.25% or higher.

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2549

No disagreement. But very tough to locate a YTM that high today on an insured CD.

Ken does include a good analysis of the YTM for his Great River deal in the wake of early closure of the CD. For Keesler members, look at those numbers and compare with putting your money into HIMMA Plus instead.

2550

Posted for information only. This is not a CD deal available to most participants here.

Will this approach catch on, and if it does how will you react?

.
Readers of this thread need to be aware of this Lafayette deal, to be aware in particular of how it is structured. Lafayette is reserving this special CD for existing members. You want to call in, join up and become a member, and snag this CD? Well, you cannot. No dice. The deal is date limited to existing members. Here is a link to Ken’s writeup. Pay special attention to his availability warning:

Ken presents Lafayette deal

This might have happened before and I just am unable to remember. But the notion of limiting CD specials to existing members/customers might become more pervasive going forward and I wanted to put you on notice.

Opinions vary on the advisability of maintaining membership in this or that credit union once your old CD special matures. For some people it’s simply too much work/trouble/annoyance. Other people maintain the memberships. I happen to be in the latter category. And if this scheme of limiting CD specials to existing members catches fire, I could benefit from that approach. But you will make your own, personal decisions on this matter. Just wanted you to be fully informed as you decide.

2551

Yes I noticed it earlier today. Lafayette CU looked familiar, but I couldn’t find any records.

How would we know anything 10/15 to apply? To bad… But @shinobi, you are a member?

Go for it. Happened that I have PSECU CD’s that
matured today. What a pity, this world have been perfect for me .

Life is cruel! :frowning:

2552

No such luck. :cry:

But the point of my (earlier) post is to encourage folks to think twice before surrendering their memberships with credit unions or closing all their accounts with a bank.

If this “existing member” scheme catches on in the industry, you might regret getting out.

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2553

I think the bigger takeaway here is that this promotion has a rate higher than last year’s promotion. That is a really good sign.

Rates (in general) still suck, but I think they’ve bottomed out and are primed to start going up in the next few months (modestly, but still up).

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2554

Be advised the October jobs report will be released tomorrow (Friday) morning at 8:30am ET.

Keep a weather eye. :wink:

2555

With the HIMMA Plus finish line now regrettably in view, some high rollers will be seeking other CD substitutes. This is for those who might have been using HIMMA Plus as a funds shelter while waiting for CD rates to increase. As such, once again, this is for high rollers only.

One liquid funds substitute you might want to consider is at Connexus Credit Union. Anyone may join there.

Connexus offers a money market, liquid, account paying 0.85% APY on balances of $100,000 and larger. Here is a link:

Link to Connexus money market

Disclaimer:

I am not a Connexus member and never have been. There might be negative aspects to this account of which I’m unaware. You must do your own research. The intent here is to put you on notice regarding existence of this Connexus account only. This is NOT a recommendation.

I do know that, unlike with HIMMA Plus, this Connexus money market account interest rate is subject to change at any time.

You might want to split your CD funds, putting some in currently available, low yielding, CDs and the rest in a liquid account like this Connexus account. You might even consider giving your money to some FINTECH or playing the slots in Vegas. Good luck with both those alternatives. The Connexus money market account is NCUA insured in a straightforward, no BS, manner.

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2556

I have Connexus and it indeed does pay .85% apy on balance over $100,000…they use to have a rather complicated way of getting the highest tiers on that money market account but those were eliminated a few months ago and the rate you get is simply subject to your “tier balance” that you have in your account as shown on their web page…

Be aware that only 4 transfers out from this account are permitted each month…

I have been with them for a while and they do tend to keep rates high…

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2558

If you happen to be moving money around in the next several (business) days, do not forget:

This coming Thursday, eleventh of November, is Veterans Day. Financial institutions will be closed that day. So either “git 'er done” by close of business next Wednesday, or else find a way to sneak those funds in on Friday, before the weekend.

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2559

I’m going to go ahead and open the Connexus CU account. The Money Mkt .85% for large amounts is a pretty decent place to hold liquid funds.

I also talked to Keesler CU this morning. Needed to have a rep transfer funds from savings to HIMMA Plus probably for final time. We talked about some alternative places for funds when HIMMA Plus shrinks to .40%.

For those of us that still like to keep liquid funds, (and wish a decent % return) we have problems. But usually with thoughtful endeavors we make out fine.

Ideas accepted, PLEASE. :blush:

2560

Connexus is really good, Patty…only thing is the transfer limits are low on their system so you will need to push and pull in from a bank/cu with large limits… :wink:

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2561

still using HMBradley, going on 11 months at 3.0 and 3.5%. have under 100k but over 80k. But starting next Q., I will drop to 3.0 from the current 3.5. My SS DDeposit will be 2320 with the increase coming in Jan, but does not meet the 2500 threshold. I must use their credit card for 100.00 monthly spend at 3% back. i use it at grocery stores. But its getting complicated. And CC fee is $60.00 after year 1. But spending very close over 100.00 monthly nets 1200 x 3% = 36.00. but the 3% rate makes this look like a no brainer. My pension from NYC pension bureau is so antiquated that they can not change my DD to Bradley. They are not in there \system and getting to talk to somebody is like talking to the wall. They use a 1970’s computer system for DD. When I started with the NYPD way back, my Citi checking was only acct I had back 30 years ago. They still use it for the pension and any other funds I get. Afraid to change.

2562

Barrons discusses prospects, and timing considerations, for higher future interest rates.

The latest surge in inflation has occurred at a time when debt has ballooned across the economy, making the prospect of higher interest rates particularly problematic. If the Fed is even further behind the curve than some observers fear, how will it cool inflation in an economy that couldn’t tolerate 2.5% interest rates during normal times?

Officials waited too long to taper and may thus have to chase down inflation aggressively, says Diane Swonk, chief economist at Grant Thornton. It’s possible the Fed raises rates three times in 2022 and another five times in 2023; the yield curve inverts, demand slows, and inventories go from tight to bloated, pushing the economy into recession, or worse, in 2024, she says.

Or, more likely, the Fed will continue to wait. Due to personnel changes, the policy-setting committee turns more dovish next year, with or without Chairman Powell, meaning officials are more apt to wait, possibly in vain, for labor-force participation to return to prepandemic levels. Waiting to raise rates increases the likelihood that money velocity rebounds to its pre-Covid trend, implying a more-than-20% rise in nominal demand from current levels, pushing prices higher, says Michael Darda, chief economist at MKM Partners.

The latter scenario requires a prolonged suspension of reality. But as the Fed winds down its bond-buying program and the Treasury market begins to speak for itself again, reality may arrive.

My own, personal, take:

You cannot ignore the debt service cost on our nearly thirty trillion dollars of indebtedness, and heading north. The Fed raises rates and the bureaucrats will go nuts trying to pay the interest on that liability.
They are in a rapidly shrinking box.

Here is a link to the entire Barrons article:

Linky

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