What would you do?

[Drake3287]

Capital One is currently offering a $1,500. bonus for opening a $100K+ savings account paying 4.3% which requires you to keep the money in the bank for 90 days. This bonus is paid shortly after this 90 day period. My dilemma is that I have a $112k CD maturing next week and I had planned to invest it in a 5 year CD paying 4.75%. Not the highest rate these days but for 5 years it gives me a nice guaranteed yearly income of $5,300, especially when CD rates will probably start to drop early next year.

Do I take the guaranteed $1,500. bonus with the 4.3% saving rate and run the risk of CD rates being lower in 90 days or do I simply go with the 5 year CD and not look back? In my mind I can't see rates going dropping that quickly next year but I'd hate to miss the opportunity of having a nice 5 year CD locked up.

And for those of you interested, Capital One is also offering a $750. bonus for balances of $50k or more.

[Jluke]

Do you put all 112k in one CD or do you break it up into smaller amounts?

That’s a good chunk of money to lock up for 5 years and if you have to break it for some reason might be better to have several CDs. Assuming there is a penalty for early withdrawal.

for your question: roll the dice and see what happens with the CapOne offer. Send 101k there and open a 11k CD if that meets the minimum requirement for a 5-year CD.

or do the 50k offer at CapOne and put the rest in the CD(s)

[bjl584]

It doesn't have to be all or nothing.
As Jluke suggested, break up the amount into a few different CD's or even look at T bills.
Maybe create a CD ladder?
4 months isn't very long, and I don't see interest rates moving much over the next year or so.
Even at your 112K, the income difference up or down will probably be minimal.

[disneysteve]

Personally I don't bother jumping around from account to account to get bonuses. It isn't a bad deal. I just don't like the hassle. My Vanguard money market is paying 5.3% so a full 1% higher than that CapOne deal with no strings attached. That's an extra $1,000 in interest on 100K making the $1,500 bonus not nearly as appealing.

Now is definitely the time to be locking in longer terms with your fixed income. The Fed is probably done raising rates and within the next 12 months they may start to drift down. Plus the rates being offered have to anticipate future rates so CD rates can come down before actual rate decreases.

[Drake3287]

Luckily in my case, being locked into this 5 year CD isn't a big deal, I've got a great deal of cash locked up in various length CD's right now in the 5%+ range. Can't see any need for this money and time soon so I'd simply put it all in a long term CD.

[myrdale]

Am I correct that the $1,500 is taxable? That you'll end up having to give $500 of it to the government?

[disneysteve]

Am I correct that the $1,500 is taxable? That you'll end up having to give $500 of it to the government?

Yes if it’s a taxable account, interest is taxable, though I doubt the rate is 33%.

[LivingAlmostLarge]

maybe 15%?

[QuarterMillionMan]

I got an email offer where Capital One extended this offer until Jan 9, 2024, but no where on Capital One's website shows this. I would like to deposit $100,000 in order to get the $1500 after 90 days but no way am I clicking on the email link to sign up. I want to go directly to Capital One's website but I don't see this offer anywhere on Capital One's website. Any ideas? If anyone can find it on Capital One's website please direct me to it.

[disneysteve]

I got an email offer where Capital One extended this offer until Jan 9, 2024, but no where on Capital One's website shows this. I would like to deposit $100,000 in order to get the $1500 after 90 days but no way am I clicking on the email link to sign up. I want to go directly to Capital One's website but I don't see this offer anywhere on Capital One's website. Any ideas? If anyone can find it on Capital One's website please direct me to it.

I would check if the email actually came from Capital One. If it did I’d feel comfortable using the link. It’s not unusual for special offers not to appear on a company’s website.

[QuarterMillionMan]

How do I do that? This is the email address;

donotreply@bankmessage.capitalone.com

[disneysteve]

How do I do that? This is the email address;

donotreply@bankmessage.capitalone.com

That’s legit. It’s from capitalone.com. What you don’t want to see is an email from x67g9fzo23@hotmail.com when you get an email supposedly from Capital One.

[QuarterMillionMan]

I see, thanks. In the email offer it says to enter promo code FALL23 by Jan 9. I'll still go directly to Capital One's website to sign up and enter that promo code. The email is legit but I won't need to use the link in the email to qualify and I'd rather go directly to their website and enter the code and like you mentioned it's not unusual for special offers not to appear on the website.

[disneysteve]

I see, thanks. In the email offer it says to enter promo code FALL23 by Jan 9. I'll still go directly to Capital One's website to sign up and enter that promo code. The email is legit but I won't need to use the link in the email to qualify and I'd rather go directly to their website and enter the code and like you mentioned it's not unusual for special offers not to appear on the website.

Yeah that’s perfect if they give you a promo code. Then you can do it from the website.

[QuarterMillionMan]

Thanks everyone who contributed to this thread I opened my account w/$100,000 in order to get the max $1500 after the 90 days. Good deal.