More Good CD News

[Drake3287]

Obviously these CD rates are common topic these days. Just last week I had a $100k, 12 month CD roll into a 2% rate which I figured I'd end up paying a penally fee on down the road and bumping to a higher rate. On Saturday I read a newspaper ad for this same bank now offering a 2.75% rate. Two days after my grace period had ended!

Made a quick call this morning and they extended my old rate to the new rate of 2.75%. Quickest $810. I've ever made!

[james.hendrickson]

Way to go Drake!!! Good move!!!! Woot!!!!!

[kork13]

Nice that the bank granted you the updated rate. I'm interested in how high the rates will eventually get to... Like back in 2006/2007, CDs were paying 5-6% or better... Sure would be nice to snag a high-rate, long-term CD while watching the rates level back down to "normal". Of course, that's little different than the discussion of stock market timing -- you never know when it'll be at the top or the bottom, or how long that'll last. A reasonable CD ladder & a long-term perspective is probably the best strategy.

[disneysteve]

Nice that the bank granted you the updated rate. I'm interested in how high the rates will eventually get to... Like back in 2006/2007, CDs were paying 5-6% or better... Sure would be nice to snag a high-rate, long-term CD while watching the rates level back down to "normal". Of course, that's little different than the discussion of stock market timing -- you never know when it'll be at the top or the bottom, or how long that'll last. A reasonable CD ladder & a long-term perspective is probably the best strategy.

The general consensus over on the ER board seems to be jumping in when rates hit 4%. They've still got a little ways to go. You can get a 5-year brokered CD right now for 3.55%. You can get a 10-year government agency bond for 4.46% but those are callable.

[disneysteve]

I've already bought a couple of 1-2 year issues for over 3% and will be buying more soon as I have 5K maturing every month that I need to roll over.

[Drake3287]

I know on that other ER forum many people are pretty tired to their CD laddering strategy, but to be honest, with rates going up as fast as they currently are, it almost makes sense for people to think about paying penalties and reinvesting at these current higher rates even if it temporarily changes their investing strategy. Compared to what typical CD rates have been doing these past few years, these new rates are a night and day change plus I think most of us agree that we'll be seeing these rate increases for awhile.

With a $100k+ CD @ 2.75%, I'm looking at $3,000 for a years worth of interest and I can foresee them easily hitting 4% or higher later this year. Far cry from my first 9% CD years ago but at least it's going in the right direction. And yes, I'm aware these rates aren't keeping up with inflation but it does help those like me that like to have a certain amount of cash to go with other investments.

[scfr]

I'm with you Drake3287 - I'll never have an OSHA-approved looking CD ladder because DH & I always go for what we think is the best combo of rate/length/EWP or alternative at the time.

[LivingAlmostLarge]

That's amazing. I can't believe it.