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I was pleased with CDs I bought for 5.3% about a month ago. At Schwab Brokerage today, CDs are now at 5.5% at 3/6/9/12/18 month. 2 year CDs are at 5.3%, 3 year at 5.1%. About the time I thought CDs were likely flattening, they continue to go up, both on a short term and longer term basis. You have to wonder how much higher those CDs could rise!
I am overweight CD’s and loving it. As an older middle aged dude it’s great not to think of the next 50% correction. The only thing I worry about is when to go out longer to lock in a living, risk free return. I think that life is cool at 5.5% and I have no FOMO at all.
I am overweight CD’s and loving it. As an older middle aged dude it’s great not to think of the next 50% correction. The only thing I worry about is when to go out longer to lock in a living, risk free return. I think that life is cool at 5.5% and I have no FOMO at all.
Yep, I am also weighing my options of at least devoting part of my portfolio for longer CDs--maybe 2 or 3 year CDs. 2 year CDs have been the longest I have previously invested in, but with 3 year CDs over 5% now, it at least deserves some consideration. With my taxable account, I prefer limiting my CD terms to shorter options of 6 months to a yearfor liquidity purposes, but with my traditional IRA CDs, I am looking closely at longer terms. A 3 year laddering approach looks interesting to me in my IRA account.
For most of my retirement years, I had a target objective of 4 to 6% TR, using low risk bond oefs. It is a little strange to be able to get that so easily with CDs these days.
@DavidV- FWIW I always specify non-callable. How can we rely on callable? Usually callable only pays a small amount more than non-callable- is it worth that small amount to gamble?
I see both points on callable vs non-callable. If you are building ladders, predictability certainly matters. But to @DavidV 's point though, you could buy a 5 year or even a 10 year callable corporate bond from Schwab at ~6.3% and ride the high return until it is called. Just a thought. Not something I've done.
Yes, actually we did something like that back in the 70s. Inflation was roaring, and I bought a couple of callable municipal bonds out of Salt Lake, to build an electric power generating facility, paying around 14%. (Figured that I could trust the Mormons.) Did very, very well on those for a number of years until they were called.
Only a couple of years ago did I discover that I had made that money by helping to enable climate change. Those generating plants at Four Corners were coal-fired, belching contaminates into the Southwest atmosphere. Talk about dirty money.
(The Four Corners is a region of the Southwestern United States consisting of the southwestern corner of Colorado, southeastern corner of Utah, northeastern corner of Arizona, and northwestern corner of New Mexico.)
Maybe not the same coal plant you invested in, @Old_Joe, but the mammoth Navajo plant at Page (AZ) was demolished in 2020. Went by it a few times in the '90s, and it was truly a belcher, the belchin'-est one in the entire West. VOX article.
dtconroe: "Yep, I am also weighing my options of at least devoting part of my portfolio for longer CDs--maybe 2 or 3 year CDs. 2 year CDs have been the longest I have previously invested in, but with 3 year CDs over 5% now, it at least deserves some consideration. With my taxable account, I prefer limiting my CD terms to shorter options of 6 months to a yearfor liquidity purposes, but with my traditional IRA CDs, I am looking closely at longer terms. A 3 year laddering approach looks interesting to me in my IRA account.
For most of my retirement years, I had a target objective of 4 to 6% TR, using low risk bond oefs. It is a little strange to be able to get that so easily with CDs these days."
There is a line of thinking that 10-year treasuries are starting to look good at 4.5%. Unlike CDs they will have a nice CG once 4.5% become history.
6m CDs at 5% ($100K+) may not be attractive (when 6m T-Bills are at 5.53%), but Jamie Dimon is offering 6% for $5 million+. Enough to make noises at X/Twitter.
Comments
For most of my retirement years, I had a target objective of 4 to 6% TR, using low risk bond oefs. It is a little strange to be able to get that so easily with CDs these days.
Only a couple of years ago did I discover that I had made that money by helping to enable climate change. Those generating plants at Four Corners were coal-fired, belching contaminates into the Southwest atmosphere. Talk about dirty money.
(The Four Corners is a region of the Southwestern United States consisting of the southwestern corner of Colorado, southeastern corner of Utah, northeastern corner of Arizona, and northwestern corner of New Mexico.)
dtconroe: "Yep, I am also weighing my options of at least devoting part of my portfolio for longer CDs--maybe 2 or 3 year CDs. 2 year CDs have been the longest I have previously invested in, but with 3 year CDs over 5% now, it at least deserves some consideration. With my taxable account, I prefer limiting my CD terms to shorter options of 6 months to a yearfor liquidity purposes, but with my traditional IRA CDs, I am looking closely at longer terms. A 3 year laddering approach looks interesting to me in my IRA account.
For most of my retirement years, I had a target objective of 4 to 6% TR, using low risk bond oefs. It is a little strange to be able to get that so easily with CDs these days."
There is a line of thinking that 10-year treasuries are starting to look good at 4.5%. Unlike CDs they will have a nice CG once 4.5% become history.
https://www.marketwatch.com/story/jpmorgan-chase-to-offer-6-interest-rate-for-minimum-of-5-million-in-high-end-cd-product-wsj-f4ef25de
https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202309