I think virtually all CDs allow the interest earnings to be withdrawn penalty free.
The short answer is that it depends on where you buy them. Brokerage - yes, TD - no. Whatās your definition of ānormalā?
even Powell doesnāt know āneutralā rates. Heās talking right now about raising rates even more and scaring the stock market for sure.
4- and 5-year brokered new issues are now being offered at 5%. Some secondaries with a 4-5-year remaining timeframe have pushed above 5.2%. Brokered 20+ year Treasuries are above 5.36%.
Feels premature to lock in here (CDs or Treasuries), but I dont know how much more room it has to run. The depressed rates a year ago (that pushed 4.9% CD yields down to 4%) suddenly disappeared in a matter of a week, Iām a little worried these higher rates will do the same - if only simply due to excess demand driving up the price and killing the yield.
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I jumped into this late, so I donāt know how much longer it will last, but Credit Human CU has some great rates:
12-17 month CDs at 6% APY
12 month āliquid CDsā at 5.7% APY
The liquid CD is the standout of the two, IMO. It combines an add-on CD AND a no-penalty CD (kind of). You can add funds at any time and withdraw twice, as long as you leave at least a $5K balance.
I didnāt initially apply to Credit Human because I read at Deposit Accounts that they use ChexSystems and will deny you membership if you have too many new accounts. I think I have 7 accounts opened this year, but was accepted. It took 3 or 4 business days for acceptance and then the ACH transfers took another 2-3 days.
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Sandia Area Fed Credit Union (overall health grade of āAā at depositaccounts.com) now offers a 13-Month Share Certificate Special at 6.00% APY with a $500 minimum opening deposit. A one-time penalty-free withdrawal of up to 50% of total balance is allowed and any withdrawal made subsequent to the one penalty-free withdrawal is subject to a penalty of 90 days of interest on the amount being withdrawn.
Easy membership requirement (Sandia Area has a rather subjective requirement: āPersons who subscribe to the permaculture ethics, consisting of the following principles: care of the earth, care of people, and reinvesting surplus for the benefit of earth and people.ā) and there are no membership enrollment fees, just the $5 share deposit to get your membership established.
Sandia Area Fed Credit Union Adds Rate-Leading 13-Month CD Special (depositaccounts.com)
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Been with them with a few 3-yr 5.5% APY CD (well below NCUA insurance limits) since April. Could have waited but I had to roll some maturing CDs somewhere.
No issues opening account or with account maintenance so far. App is fine. Honestly, I barely hear from them outside of my monthly statement. No spamming me with offers and unwanted customer service which is great for my needs. Feels like a small operation though so not sure Iād recommend for extensive banking needs.
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Treasury rates have been trending lower in the past two days. Brokered CDs usually followed suit with a slight lag. I was watching the 2-yr non-callable brokered CDs yesterday on Fidelity, and they were available at 5.4% from a few banks. This morning, I noticed they had been mostly snapped up except a small quantity left from Morgan Stanley.
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Anything 2 years or longer is down ~0.2% over 2 days. Iām guessing itās optimism over the FOMC decision to hold the rate.
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So the million $ question is this it? Time to lock in?
BMO Alto (the online branch of BMO) has 5 year CDs at 5.25% APY, as well as 4 year CDs at 5.2%. All their rates are pretty competitive right now. I was able open up a CD in about 5 minutes.
| APY | MIN | MAX | ACCOUNT NAME | VIEW DETAILS |
|---|---|---|---|---|
| 5.65% | - | - | 12 Month Online CD | |
| 5.50% | - | - | 6 Month Online CD | |
| 5.25% | - | - | 60 Month Online CD | |
| 5.20% | - | - | 48 Month Online CD | |
| 5.10% | - | - | 36 Month Online CD | |
| 5.00% | - | - | 24 Month Online CD |
Below is the write-up on āKenās site.ā The early reviews of the bank are bad, many with issues adding a spouse to an account. Itās a new division of a huge bank (8th largest in the US), so they may just be getting the kinks out.
https://www.depositaccounts.com/banks/bmo-alto/offers/#comments
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Maybe my priorities are unique, but if adding a joint owner is the issue worth highlighting, Iād think the bank is doing a rather decent job.
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Following the link, I only see 10 comments about the deal, all complaining/denying the potential lack of being able to withdraw funds early, and the 6 month penalty (including principal). I did not delve further into the reviews, but can deal with, and appreciate any difficulties the bank offers to adding an additional account owner. While I donāt like foreign banks dumping in our country, itās still tempting.
The reviews I was referring to are on the bank information page: https://www.depositaccounts.com/banks/bmo-alto.html
There are 8 reviews and they all give the bank 1 star. I donāt need to add a spouse and had an account open within minutes, so Iām not concerned. As for the disclosure about possibly not being able to withdraw funds early, it seems like Iāve seen similar language at other FIs, but donāt remember ever hearing about anyone not being able to close a CD early. In any event, Iāve never closed a CD with an EWP, so Iām not worried about it.
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Update on BMO Alto: NOW I understand all the bad reviews. After opening the CD, I wanted to open the HYSA. There is no way to do it once logged in, so you have to go to their site and enter all your info again, as if youāre a new customer. Oddly, they have no real identity verification (no uploads of driverās licenses or proof of address and no questions about what your phone number was in 1974). I was declined. No reason given. I tried to open another CDā¦ declined. I was fine as a customer a few days ago, but not today! I still have the same 830+ credit score and they are the only addition to my ChexSystems report.
Looking at Reddit, there are many complaints of being declined for no reason. Customer service has no answers.
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edit 1/03/24 The KS StateBank 11mo CD Special dropped to 5% - no longer a decent deal**
KS StateBank has an 11-month CD Special at 5.65% APY w/ $25k minimum opening deposit which can be opened online nationwide. Partial withdrawals are allowed, but any early withdrawal made within six months of account opening will reduce the principal.
NASA Federal Credit Unionās January rates for their 9mo and 15mo Special Certificates remained the same as they offered in December: 5.70% APY on the 9mo and 5.45% APY on the 15mo. 10K minimum each, new money. NASA FCU will provide a one-year complimentary affiliated membership in the National Space Society (NSS) which entitles you full membership at the credit union.
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NASA also has a 49mo CD at 4.75% APY. I ended up buying the 49mo instead of the 9mo or 15mo.
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Farmers Insurance still has a 5% Flex term CD; you can chose any term from 3 to 48 months (you need to find it on their main page, it isnt on their rate sheet). Only negative is they require using Plaid to link a external account for ACH transfer, otherwise you need to open your membership before getting the info to wire funds, which needs done before you can open a CD and secure the current rate.
If they can get me my account info before the rate drops (no idea when or if thatāll happen), I plan to drop a large slug of cash in one of those 48-month terms. Unfortunately, I put alot in 5% 5-year CDs I last year, so Iām going to be very exposed to current rates 4 years from now.
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Thanks for the info. I saw this on DA but did not investigate further because i wasnāt planning on opening another membership. I was just looking at the best options among my active accounts: Nasa, GTE, Alliant, brokered CDs and treasuries (@ Fidelity).
I did buy some very long term treasuries several weeks back, at the time when the bottom fell out. 
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Iām regretting not jumping on the 20+ year Treasuries (not sure of exact maturity) when yields hit 5.36%. I did get some TIPS at close to the most recent high yield (and Iām still so tempted to sell them for a large gain right now). Everything is relative crap right now.