I prefer to report from personal experience here whenever I’m able. Can report as follows:
I opened zzz’s Bank5Connect add-on CD. The process went smoothly and I was able to finance the opening $500 deposit with a credit card. My online research regarding Bank5Connect brought forth positive opinions of their operation. I’m happy to have the account. If they raise the interest rate I’ll just open another account. My thanks to @zzz for bringing this account to everyone’s attention.
I spent some time today looking into the Citizens Access 2.1% APY online savings account. I did not open the account. Am going at this time with Ally Bank’s 2.00% APY NPCD instead. Word online is that Ally has reinstituted ability to close NPCD accounts online, without need to telephone them. When Ally took away such ability a couple of years ago, that was a stupid thing to do. Am glad the online closure feature is back. It’s taking too long to reach Ally Bank by telephone these days, and then you have to undergo their validation/authentication procedures which are equivalent to a vigorous anal exam.
I have not yet opened my NFCU add-on CDs. But I plan to do so soon. They are no-brainers in my view and NFCU gets an A+ rating from Ken.
Not a bad deal but rate is not high enough to go through the hassle of opening a new Credit Union account. I don’t think we have to worry about rates falling below 3% in the next two years.
Now I have; both the regular and the IRA accounts. Why now?
I learned while checking everything out that this NFCU add-on CD deal dies a mean and ugly death Sunday. And I didn’t want to wait until the very end. Natch, I opened both accounts only for the $1000 minimum. Each is an insurance policy. Because who knows where interest rates are headed from here, and I didn’t have @pattyb53’s pluck (or right now her money) to go out and find myself a dynamite 4+% CD. But at least I have these 3.25% and 3.3% backups, come what may. Couple of things:
I had to fund both accounts with interest earned on existing NFCU CD accounts. NFCU is good about allowing penalty-free withdrawal of interest (only) from existing certificates of deposit, and I had enough interest to finance the needed $1000 for both IRA and regular accounts. However:
There is no provision at the NFCU website to allow doing such withdrawals of interest as this. You must telephone them. I did so, was able quickly to reach a very helpful customer service person, and she took excellent care of me. She moved $1000 of interest into my regular savings and another $1000 of interest into my IRA savings. After hanging up I was able to go online and open the two new add-on CD accounts pretty much effortlessly. The NFCU representative offered to open the new accounts for me, but I preferred to do job myself.
So bottom line now have three new add-on CD accounts, all opened with the minimum allowed amounts, and all opened for insurance purposes. If interest rates go up I’ll never even use these accounts. But the last time I bought insurance like this it turned out to save my bacon to the tune of one heck of a lot of money. If only I accurately could predict future interest rates!
But I cannot, so I buy insurance and hope for the best.
And of course they pay me decent interest on my insurance “premiums” and when the CDs mature they return the “premium” money to me. So bottom line a pretty easy decision. Belt and suspenders and all that, you know.
I note with interest the inclination of @pattyb53 to purchase, and lock in, CDs at or nearby to 4% APY. This could be a good strategy. I mean, are we really ever going to see 5% APY CDs?
Obviously I dunno. But a bird in the hand is worth two in the bush. Those of us waiting for 5% could be waiting a long, long time. In addition while there is 2018, plus or minus, precedent for 4% CDs, there is no recent precedent for 5% CDs.
As we move next week into a new month, be reminded the latest bank and credit union health ratings will become known before the end of September.
Also, word on the street is that NFCU will be announcing a new promotional CD this coming Monday. Members might want to watch for it. The new promotional CD is expected to be shorter than the current NFCU 33 month add-on CD deal which closes Sunday.
Impact on CD (and other) interest rates? Very possibly. This guy appears to be deadly serious!!
This Jackson Hole speech is a big one. To me it is the August equivalent of one of his presentations following an FOMC meeting. And of course there was no FOMC meeting this month, so Jackson Hole is IT!!
Why it matters: In a much-awaited address, Powell was blunt about the likelihood that bringing down inflation will come at the expense of the solid labor market that’s been beneficial to workers and softer business conditions. But he indicated the Fed does not intend to reverse course and cut rates just because of such softening.
ETA
Comparing yours truly with Chairman Powell is akin to the contrast between a little baby mouse (me) and a great roaring lion (Powell). Nevertheless I’m gonna squeak out a comment here:
Bear in mind the most recent Biden appointees to the Fed have all been confirmed doves. Thus when the mighty Powell in future encounters any sort of pushback regarding the measures he laid out today, he might just look behind himself and discover his army of Fed supporters has dispersed.
So is Powell merely engaging in jawboning? Only time will tell.
Except the inflation data released this AM shows only a 0.01% increase in core inflation from the previous month. I think August’s number which is released on Sept 13th will have a lot more bearing on what they end up doing than anything he said today. Talk is cheap. Remember, last year he said inflation was transitory.
The probabilities today have shifted towards 0.75% hikes at the next 2 meetings. If this comes to pass, we could have savings accounts in the 3.5-4% in November. I’d expect CDs to pay more than that.
It’s another add-on deal, 20 months this time with a 3% APY. You need one grand to get going. This deal is only good until the eleventh of September, rather a severe time limitation. Deal could always be extended, of course.
There is some good news: This deal offers a quarter million dollar cap. That is much better than the $100k cap on last week’s deal. However, IRAs are not permitted with this one.
No need to rush on this. I’m personally going to wait until the end, if I go in at all. I probably will, though.
My PSECU cd is maturing today. I’m just wondering about potential placement of those funds. But, I’m thinking of just keeping the funds in Bask savings 2+% for the time being.
If you have an account at Fidelity, Schwab, or Vanguard, then you may want to look at Treasuries. It’s much easier, for me, than Treasury Direct, and they’re easy to sell if you must. The 13 week TBills that I just purchased are paying almost 3%.
of just keeping the funds in Bask savings 2+% for the time being.