Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I bought some CDs (certificates of deposit) right before the December meeting of the FED. At the time wasn't sure whether the interest rate would be raised, so didn't buy more, hoping that if rates are raised then I'll buy more at higher rates. After the FED announcement of the rate increase, I was surprised to see the overall CD rates getting lower than before. Immediately before the meeting I bought a 6 month CD at 2.53%, and a 3 month CD at 2.4%. Now even 1 year CDs are no more than 2.45% as far as I've found during all these weeks. What's the explanation of this?
CD rates are not determined by the Fed, but by market forces. Lots of things affect that - trade imbalance, the going to rate for US Treasuries, inflation is a huge factor, exchange rate with other countries, mortgage rates, etc. Of all those, probably inflation is the biggest factor - buyers of CDs aren't going to buy paper that looses real value. The next biggest factor will be mortgage rates since CDs raise cash for loans.
Whenever I mention CDs, people seem to believe I have "all" my money tied up in them. I don't.
Over time I noticed a number of people on C-D are victims of all or nothing thinking and that's their default mode. It's one of the strawman arguments which they'll then argue to death (yours or their own).
CDs have a place to play in one's portfolio, along with a variety of other tools available. They are useful at times and for specific purposes.
OK, thanks all for the replies! I don't have account with either Vanguard or Fidelity. I have TD Ameritrade. I only buy short term CD's (less than 1 year), laddering them to park my cash.
Nodpete, 7 banks pay 2.70% or higher for short term?
OK, thanks all for the replies! I don't have account with either Vanguard or Fidelity. I have TD Ameritrade. I only buy short term CD's (less than 1 year), laddering them to park my cash.
Nodpete, 7 banks pay 2.70% or higher for short term?
12 month CD's , Synchrony, Ally, etc. Google Bankrate and you'll see all the offers.
"Slightly" for us is a nice bump up in monthly income. Too bad we're not quite ready to annuitize.
spia's are up about 1% more in draw rate based on a about a 2.25% rise in short term rates over the last two years . mortality credit accounts for the bulk of an spia payout .
spia's are up about 1% more in draw rate based on a about a 2.25% rise in short term rates over the last two years . mortality credit accounts for the bulk of an spia payout .
I have read that immediate annuity rates are heavily influenced by 10 year rates.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
