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So the big banks are doing charity work to small banks by not having higher CD rates?
That’s not the case. They don’t need to have higher rates and people still buy the CDs. If the needed you to buy CDs they’d raise the offering but they’d rather you stay in cash and make 0 while they still make net interest on your cash balances and can lend out your money
I think it's regulated. The Chase banker asked me if Chase had high CD rates would I get one here or go to another bank for a CD. I said I would get one at Chase, so he said that's why the rates are higher at smaller banks. (I assumed the higher rates give the smaller banks a fair share of the CD business)
The Chase banker doesn’t have a clue what he is talking about. The smaller banks would obviously have to pay a higher cost to the owner and have less net interest, it makes no sense from the banking business side
Does anyone have any experience with a broker CD such as what was posted earlier regarding Fidelity? I don't quite understand this below from their website.
"Brokered CDs from Fidelity
Fidelity offers brokered CDs through two main venues—as new issue offerings and from the secondary market. Investors typically will see 50–100 new issue offerings and as many as 2,000 secondary offerings at any point in time. New issue offerings are typically sold at par and investors do not pay a trading fee to purchase them.4 Purchases (and sales) of secondary CDs incur a trading fee of $1 per CD (1 CD = $1,000 par value). 5"
A banker told me the major banks don't give higher CD rates because nobody would go to the smaller banks for a CD. Capital One has pretty good rates, better than the other major banks.
That's an interesting thing for a banker to say. My local bank which has branches in a dozen or so counties in PA is showing rates as high as 0.25% for 48 month CD's.
Compared to WF which is in about 40 states, only giving 0.01% and with the maximum term being 12 months.
I hope everyone realizes that the only investment where you are guaranteed to lose money, is in a bank CD.
At an interest rate of 1.50% and inflation running at least 8.0% annually, at the end of the year your money that you put away is worth less. Oh, and you get to pay tax on the "income" you earned.
At least in the stock market, especially investing new money now after a drop of 20%, you stand a chance of making gains.
I hope everyone realizes that the only investment where you are guaranteed to lose money, is in a bank CD.
At an interest rate of 1.50% and inflation running at least 8.0% annually, at the end of the year your money that you put away is worth less. Oh, and you get to pay tax on the "income" you earned.
At least in the stock market, especially investing new money now after a drop of 20%, you stand a chance of making gains.
People are internalizing this 8% too much. Not every darn thing is going to be 8% more expensive on Dec 31 than it was on Jan 1. As a matter of fact, I bet you a bunch of them will be 8% cheaper.
High inflation figure only matters for immediate expenses (food, gas, etc.) you can't avoid, not savings (discretionary spending). This is a good time to have a lot of moveable cash.
I've noticed that online savings rates have been moving up slightly. It was 0.4% not too long ago and now it is 0.9% at Barclays. Not much, but beats bitcoins, the 'value' of which has gone down I hear...
People are internalizing this 8% too much. Not every darn thing is going to be 8% more expensive on Dec 31 than it was on Jan 1. As a matter of fact, I bet you a bunch of them will be 8% cheaper.
High inflation figure only matters for immediate expenses (food, gas, etc.) you can't avoid, not savings (discretionary spending). This is a good time to have a lot of moveable cash.
I've noticed that online savings rates have been moving up slightly. It was 0.4% not too long ago and now it is 0.9% at Barclays. Not much, but beats bitcoins, the 'value' of which has gone down I hear...
Correct, the only expense I can't avoid is winter home heatiing oil, I usually only buy sale items in the supermarket, and I curtail my car use. I would not invest any substantial amount in the stock market so the short sellers can steal it again, I learned my lesson in the 2001 .com bust. I'll take my 2.60% or higher CD any day and get my principal back. Additionally, I don't want to spend money to make Biden's administration look good after the disasters he caused.
Does anyone have any experience with a broker CD such as what was posted earlier regarding Fidelity? I don't quite understand this below from their website.
"Brokered CDs from Fidelity
Fidelity offers brokered CDs through two main venues—as new issue offerings and from the secondary market. Investors typically will see 50–100 new issue offerings and as many as 2,000 secondary offerings at any point in time. New issue offerings are typically sold at par and investors do not pay a trading fee to purchase them.4 Purchases (and sales) of secondary CDs incur a trading fee of $1 per CD (1 CD = $1,000 par value). 5"
If you call Fidelity and ask for the Fixed Income Dept. they will explain it to you, I don't understand brokered CD's entirely. New issue CD's (the dates are on the listings) have no fees to purchase. if you don't hold the CD to maturity you have to sell it on the secondary market, you could sell them for more or less than what you paid. Some CD's are callable, the bank can take it back, some have call protection. The CD's pay interest either monthly or semi-annually.
Does anyone have any experience with a broker CD such as what was posted earlier regarding Fidelity? I don't quite understand this below from their website.
I've never purchased a brokered CD, but did investigate on Fidelity website.
As I understand, there are two main differences between a brokered CD, and one you would open directly at your own bank.
First, the interest on a brokered CD is typically not accrued, but rather simply paid out on the specified schedule. Second, if you want to get out before maturity you would sell in the secondary market. You may get more or less than you originally paid for the CD, just as with many other fixed income securities.
Giving this description, my preference is to own Treasuries. They are backed by the federal government, with no dollar limit. Also, the interest is exempt from state and local income taxes.
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