I’m hanging on to the TIPS, at least until the real yield drops below 1%. I also loaded up on LTPZ, will wait until the real yield drops to below 1% as well.
Problem is, I’m locked in at a 2.2%. If the yield drops to 1%, there wont be anything decent to shift the funds into after selling. Even with a large price gain, it’ll be hard to make selling worthwhile.
Kinda debating between my local BMI CU 37-month 5% CD or their 61-month 4.75% CD for money maturing. And I’m still on the fence with these 1.3% fixed rate I-bonds which seem to be getting more attractive by the day. Won’t need any of the money soon in any case.
What do you guys think?
Given the current interest rate trends, it’s hard to choose between the two CDs: longer term but slightly lower interest rate or vice versa. Perhaps you can look at whether you have more funds maturing in 37 months or 61 months and go from there.
The 1.3% fixed rate I-bonds look interesting, but for most people (without playing tricks), the purchase amount is limited.
I’m still struggling to determine how to compare 1.3% I-bonds with ~2% TIPS. It’d take some pretty persistent deflation to negate the TIPS’s .7% advantage over the full term. And while the interim redemption/sale value is far more variable than Ibonds, I prefer to compare the value to maturity, and then factor in the costs of bailing early.
I Bonds do have some unique features that TIPS do not have, like tax-deferral until redemption, can be used for qualified education expenses tax-free (subject to income limitations) and will never lose nominal value.
But you can only purchase limited amount each year, and of course it’s real yield is currently 0.7% less compared to TIPS. You also have to deal with the TreasuryDirect website and (poor) customer support.
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But how do you take all those factors and deterrmine a breakeven rate? 
How would one estimate in advance the exact cost of bailing out for TIPS since that depends on secondary market valuation at the time of redemption?
I have sold all I-bonds with fixed rates 0%, 0.1%, 0.2% and 0.3%. I have put the proceeds into long term TIPS with real yields 2.5% ~ 2.6%.
I’m also thinking of liquidating the rest of the I bonds under my trust and my spouse’s names, so as to just reduce the number of TD accounts from 3 to 1.
For now, I will keep the I bonds in my account which I have held for ~20 years. I will use them tax-free for education expanses in the next few years.
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Alliant has a 12 month CD 5.25% APY, 18 month 5.30%, $1K minimum.
NFCU 12 month 5%, $1K minimum.
NFCU Easy Start Add-on CD 12 months 4.95% APY, 18 months 4.45%, $50 minimum.
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You really cant. It’s the complete uncertainty compared to the certainty of Ibonds. Which is why I consider the stating point to be to compare the two when held to maturity - namely, the TIPS higher yield relative to the Ibonds guaranteed to never lose value. I can adjust for the tax deferral and potentially being tax free, but I dont have a clue how to account for the possiblity and effect of deflation
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As a reminder, Alliant’s CDs have “extendable” maturity up to the next CD term. For example, for that 18mo CD, you can extend it to a term of 24mo less one day. So it is effectively a 24mo CD @ 5.3% (5.35% for $75,000+).
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For those with GTE CDs, what is the easiest way to give GTE the instruction NOT to renew the CD? I did an online chat with them, and they told me to chat with them only on the maturity date or within 7 days after the maturity date.
I wish they would provide the renewal options online, like Alliant or NASA.
T Bank has a 13-month CD Special at 5.65% APY w/$1k minimum opening deposit & no stated balance cap. Nationwide thru online application.
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I received an email offer from NFCU: $50 bonus for opening Easy Start add-on CD 4.95%. Requirement is 3 scheduled transactions by April 30. I opened the account with $50 and set up $10 a month deposit for 3 months. This is only for those who receive the promotional email.
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With rates likely on the way down, I’ve been working on a CD ladder. The last rung was the 5 year. I thought BMO Alto was going to complete the rung, but I was going to split it into two CDs and was rejected for the second (common with this weird branch of BMO). In any event, I decided to go with Advancial.
Advancial 5 year CD rates:
5.4% APY Jumbo ($50,000 minimum)
5.29% APY Jr Jumbo ($25,000 min)
5.19 APY Regular ($1000 min)
Anyone can join, although the application itself has a glitch. You need to join the United States Dog Agility Association (Competitor Services | Login or Register | USDAA). It’s free and you don’t need a dog. Honestly, I’m not sure if joining was necessary, since Advancial never asked about membership, but maybe they confirm you’re a member with them. The application is pretty simple EXCEPT it rejected the rear of my driver’s license (which happens to almost everybody). I tried multiple scans and photos without success. I messaged them and they emailed me an application within minutes and I was able to email them the application and the DL photos. The next day, I was a member.
You need to have funds in the account before opening the certificate. They initially limit external transfers on their system to $2500, so you need to either wire or push the funds in from another source. Once the funds are in the account, it is super easy to open the CD. Their website is quite good. They let you choose dividend payment and maturity options when opening the account and let you modify it online after the account is open.
Edited to add that their website says the rates are good through 1/31/24.
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What was the first you heard from them? I submitted an application last evening (apparently it accepted my driver’s license pic?), but havent received so much as an acknowledgement of the submission.
I am tempted to apply as well. Is your membership open now?
Yes. For some reason I got a email asking why I was applying and how I found them, but less than an hour after replying I got approval emails, account info, online access, etc. I had the info to request a wire transfer tonight (less than 24 hours after submitting the application), and expect to have the CD purchased by tomorrow afternoon.
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I’m glad you got it open. Maybe they fixed the driver’s license issue or possibly certain states licenses are more likely to be accepted. I spent way too much time on it, but thankfully, their customer service seems really good.