Over on DA, there’s a discussion of a 5% 5-yr CD (5.05% for jumbo) from All In Credit Union. Apparently, it is possible for anyone to qualify for membership. Scroll down and read the comments by me1004
https://www.depositaccounts.com/banks/credit-union-al.html#promo51592
I have not done this deal, just passing along the information.
6% for 11mo at some CU, max $50k
Alliant has 4.85% 3 month CD, 5.00% 6 months. $1000 minimum. This is the best short-term deal I see.
Short term (two years and shorter) treasury yields have now all exceeded 5%. As of today, the 1-yr treasury is around 5.3%. As a reminder, the interest from treasuries is exempt from state and local taxes.
Please stop cluttering up the CD thread with Treasuries discussions. They are different and should have their own thread.
I know when I post here about treasuries, it’s because someone recently posted a CD that has a rate 100% inferior to the current treasury rates (which have better liquidity and tax treatment as well).
If I were thinking of buying a fixed term risk free investment, I’d want to know the best rate I could get. I think these posts are made in that spirit.
Banks are notoriously slow at raising rates, keeping offers for CDs and savings rates as low as they can get away with, while treasuries moved up today sharply as J Powell talked about the need for higher rates and more hikes likely in the future. The odds of a 50bp Fed rate hike in March went from an outside chance to a strong favorite.
Rates are rising, and it’s not clear locking in rates right now is the best move, at least until the market realizes this.
Then start a new thread for treasuries. They aren’t CDs and have different characteristics as well as different interest rates.
Lighten up. Posting occasionally about treasuries is not a crime. Actually, it’s quite useful to compare them to CDs. It helps to assess the relative attractiveness of CDs against another risk-free investment with similar characteristics.
The fact that they have different interest rates is moot, because so do CDs, and that’s what this thread is for – rates. But I’m not sure why you’re complaining about their characteristics – could you explain why you think Treasuries are not directly comparable to CDs?
5-yr non-callable brokered CD now at 4.8% (available from Fidelity).
They are pretty comparable to brokered CDs. Aside from tax treatment, I dont see a material difference. Besides the fact that a CD passes through a private entity before being backed by the federal government, while treasuries are backed by the government directly.
I think they’re comparable to brokered CDs when purchased from a broker, and bank (non-brokered) CDs when purchased directly from the Terasury.
I think the only difference between CDs and Treasuries is that with Treasuries there’s no choice to receive monthly interest, you only get paid at maturity.
Is that true for all, or just the shorter maturities?
I was on mobile, and too terse, apologies. I concede Treasuries are very similar to CDs, but with two big differences.
if you have to cash out a Treasury early you’ll have to accept market rate. Their price will go up if rates have fallen and down if rates are up. Doesn’t apply if you hold to maturity.
Treasuries are a huge market, with lots of money and brainpower looking for deals. I don’t have much faith that I will notice good deals in that market that everyone else has missed. With most CDs (except brokered) institutional investors are locked out of the market generally, and the amounts are too small to attract institutional investors anyway. I think especially No Penalty and Add-On CDs can be fantastic deals that wouldn’t survive if the market were more efficient. So over in CD land I keep an eye out for $20 bills lying on the street, but in Treasuries I don’t think I’ll be quick enough to spot them first.
Treasuries can still be better than CDs, and especially for short terms we’re in one of those times now. But I think they’re different enough that they should be considered a separate asset class and have their own thread. I’d love to understand more about how 5-30 year Treasuries fit into someone’s portfolio, I don’t see a reason why anyone would hold them over some percent shorter bonds and stocks.
We’re not talking about 5-30 year Treasuries here, the exact quote you responded to mentioned 2 years or less. We’re also not talking about the yields you have to hunt for on the secondary market. You can buy them at the auction, and the yields are basically known in advance since they don’t move that much.
For those who don’t need to cash out early, it’s the same as CDs.
We already discuss Treasuries in the I-Bonds thread, and I think that thread is totally appropriate for such discussion. But Treasuries weren’t brought up here for discussion, they were brought up to point out that the short-term yields are higher than CDs, especially for those with state income tax. IMO short-term Treasuries for most purposes are not different enough from CDs to prohibit their mention here.
Ally 11-month no-penalty CDs have increased from 4.00% APY to 4.75% APY
Someone posted this on DOC. Ally is on the list.
Shorts are going to pounce on these stocks next week.
Discover is back with a 5% 5-year brokered CD. A couple others at 4.8%.
There are also 12-18 month new issues with a yield near 5.5%.
I also saw some 2-yr CDs at 5.25%. The drop in the corresponding treasury yields in the past few days have made CDs competitive again.