Welcome to City-Data.com Forum!
U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics
 [Register]
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.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 06-16-2022, 11:32 AM
 
2,751 posts, read 1,788,719 times
Reputation: 4453

Advertisements

Quote:
Originally Posted by Schuttzie View Post
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"

https://www.fidelity.com/fixed-incom...E&gclsrc=aw.ds
I've used them for my cash position. New Issues will have a settlement date anywhere from next day to 10 days depending on what the inventory is (note, even if the settlement is 10 days away they will debit your cash position immediately). Essentially you're buying the instrument directly from the issuer.

Secondary CD's are being sold by an investor not the issuer. So someone sees a better opportunity for their cash may put their CD up for sale. At least with Ameritrade, they'll show you what the yield to maturity is for a CD based on whatever the asking price is.

The thing I like about brokered CD's is the ability to leverage FDIC insurance through a single account. Brokered CD's also pay interest to you instead of capitalizing it to the CD instrument like most banks do.

A couple of years ago I did have an opportunity to capitalize on some higher yielding CDs at a credit union I belong to. I was able to sell out of the brokered CD's to raise the cash for the new instruments and increase my overall yield fairly significantly (even had a bit of a net gain on the sales), it's a fairly smooth process.
Reply With Quote Quick reply to this message

 
Old 06-16-2022, 11:55 AM
 
983 posts, read 611,189 times
Reputation: 1387
Thank you everyone, for responding with more information on these brokered CD's!
Reply With Quote Quick reply to this message
 
Old 06-16-2022, 11:59 AM
 
Location: By the sea, by the sea, by the beautiful sea
68,340 posts, read 54,462,599 times
Reputation: 40741
Why aren't major banks raising CD rates?


Because they favor themselves, not their customers.
Reply With Quote Quick reply to this message
 
Old 06-16-2022, 12:25 PM
 
Location: Shawnee-on-Delaware, PA
8,096 posts, read 7,467,481 times
Reputation: 16368
Quote:
Originally Posted by 2Navigate View Post
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.
If Jay Powell's 75 basis point hike doesn't work, people will soon be internalizing 10% inflation "too much".

Regardless, I bet a lot of things won't be any cheaper at all on December 31, 2022 and they were on January 1, 2022.
Reply With Quote Quick reply to this message
 
Old 06-16-2022, 01:50 PM
 
18,250 posts, read 16,946,645 times
Reputation: 7554
Quote:
Originally Posted by wp169 View Post
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.

I think he's right. Larger banks are the ones that will get bailed in a crash, not the smaller ones and most smart people know this. That's why the Big 10 will keep their interest rates at 0.01%--because they know depositors will keep their money in a large bank out of fear of losing it all in a Depression. In these uncertain times no one should keep large amounts of money in tiny banks.
Reply With Quote Quick reply to this message
 
Old 06-16-2022, 01:57 PM
 
19,145 posts, read 25,367,790 times
Reputation: 25445
Quote:
Originally Posted by thrillobyte View Post
they know depositors will keep their money in a large bank out of fear of losing it all in a Depression. In these uncertain times no one should keep large amounts of money in tiny banks.
I thought that adults were aware of the existence of the FDIC. Nobody has ever lost a dime of their money from an account in an FDIC-insured bank--which is essentially all of the banks, regardless of size.

https://www.fdic.gov/resources/depos...ally%20covered.

Reply With Quote Quick reply to this message
 
Old 06-16-2022, 02:00 PM
 
Location: MID ATLANTIC
8,676 posts, read 22,938,531 times
Reputation: 10517
See what your local credit union is offering. I just checked and there are still flex terms out there, ie, opportunity to bump rate up 1x or no penal withdrawal. All vary. But it's not like it's "big money. On 50K, rather than $24 per year on MM rates, you will earn $125. There is value to having liquid cash at your fingertips.
Reply With Quote Quick reply to this message
 
Old 06-16-2022, 02:17 PM
 
464 posts, read 315,755 times
Reputation: 779
Just bought 10-year CD at 4% today (interest paid monthly). A couple weeks ago, bought an A-rated 10-year corporate bond yielding 5% for comparison.
Reply With Quote Quick reply to this message
 
Old 06-16-2022, 04:49 PM
 
26,194 posts, read 21,625,027 times
Reputation: 22772
Quote:
Originally Posted by thrillobyte View Post
I think he's right. Larger banks are the ones that will get bailed in a crash, not the smaller ones and most smart people know this. That's why the Big 10 will keep their interest rates at 0.01%--because they know depositors will keep their money in a large bank out of fear of losing it all in a Depression. In these uncertain times no one should keep large amounts of money in tiny banks.
FDIC would cover most CDs, anyone purchasing CDs not covered by fdic aren’t very smart. Chase or middle of nowhere bank both can be covered and would be if they are fdic members
Reply With Quote Quick reply to this message
 
Old 06-16-2022, 05:20 PM
 
1,257 posts, read 1,384,589 times
Reputation: 4282
Quote:
Originally Posted by foulball View Post
Just bought 10-year CD at 4% today (interest paid monthly). A couple weeks ago, bought an A-rated 10-year corporate bond yielding 5% for comparison.
Was this a brokered CD? Care to share where it wa purchased? Thanks.
Reply With Quote Quick reply to this message
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.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics

All times are GMT -6.

© 2005-2024, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top