They don’t. Which is why they lock in a rate that gives them sufficient cash flow. As opposed to earning less than they need [in a liquid account] while waiting for a potentially better rate, and risk rate trends reversing.
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NASA Federal Credit Union has three new specials (the 9-month CD offering is okay):
9-month CD at 2.00% APY
15-month CD at 2.50% APY
49-month CD at 3.00% APY
10K minimum deposit.
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Does anyone have an account at DOCFCU and know the exact details of their “relationship rewards” program? It’s not on their site or google…
Also their 6mo (6-11) CD is 2.20% right now, more with the relationship rewards bonus, more with at least $25K:
I’m thinking 2.5% fixed for 6-mo is close to break-even with the best savings account over the same period, so this isn’t for me, but this could get better in the near future.
Bellco Smart Move CD just jumped to 1.65% APY.
3.64% APY on a five year CD
Anyone may join this CU. You need at least $500 to open account.
BUT, BEWARE:
Even though the APY is high, this CD has a gargantuan early withdrawal penalty!! 600 days!!
Do not invest thinking you will be able to get out easily if rates escalate.
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There’s now talk about the economy going into recession. And the longer term treasuries have responded correspondingly. The 5-yr peaked at 3.61% on 6/14 and closed at 2.88% on 7/1. The 10-yr peaked at 3.49% on 6/14, and it is now 2.88%.
I am tempted to lock some funds into a 3-yr or 5-yr instrument, probably not a CD for me but a 3-yr MYGA at 4.4% or a 5-yr at 4.5%.
EDIT: corrected typo in numbers.
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Reminder:
The June jobs report will be released this coming Friday morning at 8:30 am ET.
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Can you provide the link where they are showing this 3-yr MYGA at 4.4%.
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I am seeing a 3-yr MYGA at 4.10%. The company, Guggenheim Life Insurance, is rated A-
Where do you see 4.4%? Is that for lower-rated companies? How low are you willing to go rating-wise?
The Gainbridge direct link offers the 4.4%.
I’m just the middleman, not the one who said he was investing in them. Although I’m still really tempted to lock up some liquidity. My optimism for a 4% CD has taken a hit lately, and I currently have too much exposure to liquid rates for my comfort.
Reminder
The Fed will announce changes, if any, to the federal funds rate exactly three weeks hence, on Wednesday, July 27, 2022, in the afternoon.
Also note:
The minutes of the June 2022 Fed meeting will be released at 2:00 pm today.
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Ally Bank has just increased its Online Savings account interest rate.
Watch for a likely soon-to-come jump in the Ally Bank NPCD APY.
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Ally NPCD == savings == 1.15%, so the NPCD is pointless.
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That is quite revealing. Thank you for posting.
Customarily the NPCD APY is a bit higher than the perfectly liquid accounts. This because the funds are slightly more locked in. However:
Ally at this point is paying no interest rate premium for people going the NPCD route. What could they be thinking?
The one advantage, for us, of an NPCD is that the issuing financial institution is locked in. They cannot lower the interest rate on an NPCD as they can with a savings account. So:
Could this mean the pointed heads at Ally are factoring in possibility of lower interest rates? Hence they are avoiding paying a premium interest rate for funds that lock them in?
Obviously I dunno. But I guess time will tell.
.
Note:
NPCD = No Penalty Certificate of Deposit
These CDs have no early withdrawal penalty.
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Factor in the above as you make your remain short/go long decisions.
Note as mentioned a few posts back, the next Fed meeting remains (now just a bit less than) three weeks away.
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Langley FCU 33 month promo CD pays 3.25% APY
Anyone may join this CU. You need at least $500 to get in on this deal.
Note I have not done this deal personally so I do not know the EWP. This is something you should learn before you jump in. Because this is a promo situation there might be (or might not be) special terms and conditions. Ask.
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Note:
EWP = Early Withdrawal Penalty
.
ETA
OK, I found the “gotcha”:
So only 3.15% APY unless you’re willing to tolerate the annoyances.
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FYI, the current treasury rates for a 2-5 year terms are about 3.13%. So I would buy the treasuries instead of the CD if state taxes matter to you.
Yes, the CD does have a put option if rates rise even more (and treasuries fall) at a cost of the EWP, so that’s worth something too in favor of the CD.
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Sorry. That is wrong. I was in error. There are no annoyances. The promo rate on that Langley 33 month CD account is a straight 3.25% APY.
Ken has now written this Langley account up. He did a better job than I did:
https://www.depositaccounts.com/banks/langley-cu/offers/
Ken mentions there is a 180 day early withdrawal penalty, which is not too bad these days.
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