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A few years ago I started a 5 year CD ladder and as one step of that ladder I purchased a 5 year CD in March 2018 that is paying 2.9%. So it is the equivalent today of a 4 year CD correct? The best rates I am seeing today on 4 year CD's is 2.7% so shouldn't my CD be valued at a premium? Instead it is still listed at a discount on my statement. It doesn't really matter because I intend to hold until maturity, but I am just curious. What am I missing?
A few years ago I started a 5 year CD ladder and as one step of that ladder I purchased a 5 year CD in March 2018 that is paying 2.9%. So it is the equivalent today of a 4 year CD correct? The best rates I am seeing today on 4 year CD's is 2.7% so shouldn't my CD be valued at a premium? Instead it is still listed at a discount on my statement. It doesn't really matter because I intend to hold until maturity, but I am just curious. What am I missing?
I don't know the answer to your question, but you can do better than 2.7 on a 4 year cd.
Did you buy from the institution offering the CD or did you buy on one traded by brokers.
If you purchased from say a bank, they the value will not change and if you cash it in early you will probably forfeit some interest.
If you purchased from a broker then the price could change each day. The change in price would include the accrued interest as well as the current market interest rate. Maybe accrued interest is the price difference from what you expect.
I bought through Fidelity and was basing my rates on what is offered on Fidelity today. Sounds like the valuation is based on a broader look at four year rates.
I bought through Fidelity and was basing my rates on what is offered on Fidelity today. Sounds like the valuation is based on a broader look at four year rates.
It’s going to price vs the market not fidelity
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