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You have to compare the different CD's for the same bank institution. There may be promotions, or more likely different cycle for updating the rates at given banks than others.
This. It all depends on what the bank forecasts their interest profits being for that period, plus any promotional bumps, less any caution factor. A sophisticated investor can usually spot or guess at why there might be a dip in the progression, as there is here.
In the history of money market mutual funds, only 2 such funds "broke the buck." One occurred in 1994 when Community Bankers US Government funds was liquidated at 94¢ on the dollar due to speculating in derivatives to increase yield and the Reserve Primary Fund (which held $64.8 billion in assets), which had invested heavily in Lehman Brothers commercial paper. When Lehman Brother went belly up in 2008, the fund was liquidated. But new SEC rules prohibit such things now. I believe that people in Reserve got most all of their money back.
This. It all depends on what the bank forecasts their interest profits being for that period, plus any promotional bumps, less any caution factor. A sophisticated investor can usually spot or guess at why there might be a dip in the progression, as there is here.
As it always has, it depends mainly on the term length and the minimum deposit, all thing being comparable and without promotional rates. There are new online banks that are giving out promos for money markets, but I only checked for it last fall.
Banks pay for deposits based on their lending portfolio or need of capital ratio for future lending expansions. Some banks will offer "specials" on certain terms to obtain deposits quicker. Banks that have more cash than loans will not pay for deposits as they do not need to.
At 70 I would not be in the market more than 20 Percent. CDs are paying 3 percent or a bit over for a three year. I just did one for 3 percent APY at Pure Point. I have a couple that are 2.25 percent but will come due in two years. I figured out that the rate if it reached 4 percent I could make my loss back and it would be worth the penalty. The market is IMO too over weight right now. I like stocks that are blue chip and 11 PE give or take a bit. At your age you can also do annuitys in place of the market and get a guaranteed 5 percent or even higher. Not FDIC but don't put it all in to one thing.
no, annuities do not pay 5% interest . that 5% is cash flow including your principal . in fact today your actual roi is zero for 17 years . you put 100k in an immediate annuity and the flow rate is about 5.50%.
that means it takes 17 years just to get back the money you handed them so not until 18 years later do you actually see a penny in "interest". that is when you see your first penny of insurer money. in fact if you lived to 90 you would not see 5.50%.
in this annuity below you are guaranteed a 5.50% growth rate until you decide to annuitize it.
even with a guaranteed growth of 5.50% at 90 the best you got is 4.55% and that is with a 5.50% growth rate guaranteed . figuring average life expectancy you would get way less . at 85 you would have seen 3.97% roi .
Last edited by mathjak107; 10-03-2018 at 03:19 AM..
There is a walk-in in our area offering 3.2 for a 21mo CD
I think we are taking some of that
We have money in mutual funds and other products
We just have lot of cash and will be selling a house and getting that money as well
Have one CD coming due in Nov that we might close couple of weeks early because it is only at 2.15--no penalty except giving up the remaining interest...
I just thought it was unusual and interesting that there was what to me seemed a noticible dip between 12-24-36 month rates
That has kind of changed now after Powell and the Fed's latest move...
Online banks have lower offered rates than the walk-in banks and CUs in my area
DFW apparently has some of the higher rates than in other TX metros even...
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