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 know what you mean about that hesitancy. I have always found it so hard to feel comfortable doing any investing online and haven't up till now.
I didn't get any direct answers on my previous post about CDs. I went to the credit union today about a CD that came due. I decided to take out enough to buy an I bond and put the rest in another CD there. They were running a special and had a 20 month CD for 2.05%. I know that isn't great but a lot better than other places I checked. If a much better rate comes along in the future I don't mind cashing it out ahead of time as long as the three month interest penalty still makes it worthwhile.
Now comes the hard part (at least for me). Setting up an account with the Treasury, making sure I do the transfer of funds correctly and then sending my hard earned money off into cyberspace.
SEE POST #190 about how to get various CD rates from all over.
Now comes the hard part (at least for me). Setting up an account with the Treasury, making sure I do the transfer of funds correctly and then sending my hard earned money off into cyberspace.
I'm there with you on that.
I got a little twitchy just setting up an online savings account with Marcus. It all felt too easy... and so I'm just going to zap some of my actual-only-savings-we-have into this electronic outer space? Ha.
Well, it's all fine of course, but because I've never had enough excess funds to do anything but pay down debt it's a new landscape to get familiar with and confident about.
I got a little twitchy just setting up an online savings account with Marcus. It all felt too easy... and so I'm just going to zap some of my actual-only-savings-we-have into this electronic outer space? Ha.
Well, it's all fine of course, but because I've never had enough excess funds to do anything but pay down debt it's a new landscape to get familiar with and confident about.
Jessie, you can set up periodic purchases of I Bonds rather than invest a single sum all at once.
If you were to do that set up monthly from now through late October, every bond you purchase would earn that 9.62% for its entire six months.
Jessie, you can set up periodic purchases of I Bonds rather than invest a single sum all at once.
If you were to do that set up monthly from now through late October, every bond you purchase would earn that 9.62% for its entire six months.
I'm confused because one person can only buy $10,000 in I bonds per year. So I don't understand what you are saying. What advantage is there to set up several I bonds when their sum total cannot exceed $10,000 in a calendar year as opposed to one I bond for the max amount? Either way, you cannot invest more than 10 grand per year and the interest rate is the same regardless of the number of bonds you have.
I'm confused because one person can only buy $10,000 in I bonds per year. So I don't understand what you are saying. What advantage is there to set up several I bonds when their sum total cannot exceed $10,000 in a calendar year as opposed to one I bond for the max amount? Either way, you cannot invest more than 10 grand per year and the interest rate is the same regardless of the number of bonds you have.
I suggested incremental investing to help her build familiarity and confidence.
DanceWithBeagles: I did see your previous post and that information was helpful.
This was my original question I was asking about.
My question is would it make more sense to purchase a CD with a longer term and get the better rate. Then, if rates go up say a year from now you could cash it in ahead of time and get one with the higher rate one. I know you would pay I believe a 3 month penalty of interest but wouldn't you still make out better this way? If you purchase say a 5 year CD and get a higher rate and cash it in for example after a year because you can get an ever better rate wouldn't that be better than buying a 1 year CD even if you have to pay a penalty?
I'm probably not explaining myself very well and have people confused.
DanceWithBeagles: I did see your previous post and that information was helpful.
This was my original question I was asking about.
My question is would it make more sense to purchase a CD with a longer term and get the better rate. Then, if rates go up say a year from now you could cash it in ahead of time and get one with the higher rate one. I know you would pay I believe a 3 month penalty of interest but wouldn't you still make out better this way? If you purchase say a 5 year CD and get a higher rate and cash it in for example after a year because you can get an ever better rate wouldn't that be better than buying a 1 year CD even if you have to pay a penalty?
I'm probably not explaining myself very well and have people confused.
You were clear. I didn’t answer that question. Sorry. I think I was answering another post.
As you’ve already figured out, you have to watch increasing interest rates and then do the math on whether it’s worth it to buy a 5 year CD now and cash it in, with penalty, if a much better rate comes along. It probably will be.
Capitol One used to have no-penalty CDs available.
In my post, I was showing you a variety of rates and maturities available for CD and Treasury purchases so you’d not be stuck with just your local credit union rates.
You could also have built a CD and/or Treasury ladder—Schwab has a tool for this—to take advantage of rising interest rates.
I just checked, and with today’s posted rates, you would already be earning more than with the 20-month 2.05 at the CU:
Jessie, you can set up periodic purchases of I Bonds rather than invest a single sum all at once.
If you were to do that set up monthly from now through late October, every bond you purchase would earn that 9.62% for its entire six months.
Thanks. I've already purchased the max I can for this year though.
I was just commiserating with the poster who joked about sending money off into cyber space. I too had to get comfortable with that when I first purchased I Bonds.
Thanks. I've already purchased the max I can for this year though.
I was just commiserating with the poster who joked about sending money off into cyber space. I too had to get comfortable with that when I first purchased I Bonds.
Then if you have a spouse and available cash, there is always the gift box option to pre-purchase for next year at today’s 9.62% rate.
Then if you have a spouse and available cash, there is always the gift box option to pre-purchase for next year at today’s 9.62% rate.
This is cool. I hadn't heard about this before.
"You can buy a gift for your spouse and hold it in your gift box. Have your spouse do the same for you. Wait until interest rates drop and the two of you don’t buy I Bonds anymore. Then you can deliver the gift to each other. The older gift bonds earned the high interest rates in the years past and they have aged enough for immediate cashout." (https://thefinancebuff.com/buy-i-bonds-as-gift.html)
Totally going to do this.
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.
