PSA…CD (certificate of deposit) Rates Up.

[rokdog49]

You can get 3% these days on a three year CD.

[Mandobart]

It's nice to see interest rates on deposits rise, though it's due in part to inflation.

Back in 1989 when I bought my first house we had inflation (not as bad as we do today). I had an adjustable rate mortgage at 9.75% - I was thrilled to be under 10%. But my CD's were earning 7%.

I haven't seen interest rates near that high for quite a while, and don't expect to ever see them again. It's been pathetic for the past few years; I've earned just fractions of a percent on my regular savings now for several years.

[birdsong]

I have on my 'to do' list today to check on this and see what my credit union is offering. I currently have 2, that I set up a few years ago at 2.5 (3 yr) and 2.85 (5 year). I have them set to rollover at renewal but with rates going up.......... yeah, I want to look at a "refinance".

I never thought I'd see a savings account rate so low - for the past what, 10 years? as close to zero as one can be without being at zero, good grief.

[Dru Edwards]

Here in Canada CDs are called GICs (guaranteed investment certificates) and yes, the rates have gone up as the federal bank has raised interest rates twice this year. I'm expecting them to go up at least another 1% in the next few months here.

[Tahitijack]

Inflation is about 9% so a CD is still a poor place to invest.

[JonWint]

Remember inflation.

3% - 8.6% = -5.6% per year, before taxes

Might be a good time to buy discounted equities down 15 to 30% or crypto down 75%.

[rokdog49]

Originally Posted by Tahitijack

Inflation is about 9% so a CD is still a poor place to invest.

It’s not an “investment” per se.
We want accessible money with earnings at the highest rate we can get on cash $$.
For the record, we already have IRA’s, annuities and the like. CD’s currently pay the highest rates on a short term cash investment. Cash is part of our portfolio. We just bought a CD that pays 2.26% yield for a ONE year time frame. No savings or checking/ savings will pay that kind of interest unless you have more than $10,000 to throw in. There are minimum transaction requirements and other stuff you have to do to get that.
We also bought a two year at 2.86 and a three year at 3.11.
Also for the record, we do have a checking/savings for emergencies so if we needed immediate cash without penalties, we’re good.
That one pays an awesome 1.1% interest.
My post was a PSA intended for folks who would like to get a better short term return on their excess cash holdings if they have any.

[619TF]

Originally Posted by Tahitijack

Inflation is about 9% so a CD is still a poor place to invest.

And the USA stock market is down 20% on the year. What suggestions do you have for better than "a poor place to invest"? Seems like there's nowhere to run lately.

[MrDB]

Govt I-bonds are inflation adjusted bonds currently paying 9.62%. Rates change every 6 mo but are likely to stay fairly high for now.

[buddyhu]

Originally Posted by MrDB

Govt I-bonds are inflation adjusted bonds currently paying 9.62%. Rates change every 6 mo but are likely to stay fairly high for now.

Just bought some last week. Will reset in October. One must open an account at Treasurydirect.gov. $10K max per investor per year. It is good, for now.


While it might be a good time to do some dollar cost averaging into the stock market, it takes a bit of fortitude to do so.

Crypto is not an investment that I would consider. It was supposed to be a hedge against inflation, but it is tanking just as we see the inflation starting to appear. AND, there is no way for anyone to establish what moves the price of crypto. It certainly isn’t any underlying fundamentals or future earnings. To me, crypto looks like an interesting concept/phenomenon, but who knows if that means buying crypto will be a money making proposition? Answer: no one knows. It might pay off….but so might playing slot machines or blackjack in Las Vegas, and I don’t do that either.

[buddyhu]

Originally Posted by rokdog49

You can get 3% these days on a three year CD.

Rates are moving fast (in some banks). I had to find a place for money from a CD that matured two weeks ago. The highest rate I could find for 3 years at that time was 2.1%.

[rokdog49]

Originally Posted by buddyhu

Rates are moving fast (in some banks). I had to find a place for money from a CD that matured two weeks ago. The highest rate I could find for 3 years at that time was 2.1%.

That’s too bad. You can get 2.75% on $1000 minimum for three years today. Capitol One has an 18 month for 2.5%, no minimum.

[rokdog49]

Originally Posted by MrDB

Govt I-bonds are inflation adjusted bonds currently paying 9.62%. Rates change every 6 mo but are likely to stay fairly high for now.

I checked on those. You have to open an account with the treasury and buy them in $25 or $50 increments.
That’s a good return on a one year deal, but they do limit your purchase to 10k …if that matters to you.

[reeve21]

Originally Posted by Tahitijack

Inflation is about 9% so a CD is still a poor place to invest.

Check out I bonds. Can’t park much there but your Uncle is paying 9 percent.

Just saw I’m late to the party as usual