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CD Question

Area bank is offering cd's from 9, 12, 18 months. The rate goes down as the length increases. I find this to be the opposite of what I would call the norm. Any good reasons for this ?


  • I notice that too. In the past, yield curve inversion indicates the coming of a recession. I believe 6-12 months CDs are reasonable as one can build CD ladders.
  • edited August 31
    "I believe 6-12 months CDs are reasonable as one can build CD ladders."

    Yes, that's what I'm doing at this point. 3.15%/1 year isn't great, but it's better than nothing.

  • If you stagger 4 1-yr CDs, 3 months apart, you should able to do okay. There are more new issues available today.

    Treasury offers few more basis points than CDs on comparable duration if you want to look at this option as well.
  • edited August 31
    Repeating what we had already discussed -

    I looked into both CDs and Treasuries and settled on the latter for their high liquidity. Very easy to trade Treasuries in a brokerage account and without commission. I bought to hold but optionality to be able to sell is important for me if I want to increase risk. Treasury interest income is also CA tax-free - not with CD income.
  • edited September 1
    Great points. I have been buying 26 weeks treasuries and holding them to maturity.

    Fidelity is the easiest to buy new issues while I had issues with Vanguard. Only to find out later that Chrome browser (not Safari) would resolve the issue with Vanguard. Every browsers I tried work at Fidelity.
  • Just bought 1-year CDs at 3.15%. Expect interest rates to go up and may purchase additional CDs in the future.

    As a retiree, I am currently in a capital preservation mode until I get a better sense of how far the Fed will go, and how the market reacts to the anticipated rate hikes down the road. At this time, I am in no hurry to put money into bond or stock funds. At my age, I prefer to err on the side of caution.

    Good luck,

  • edited September 1
    I would like to be able to invest in Treasury issues, but months ago when I tried to register online they came back with the following:
    We are having difficulty verifying the information you provided when opening your account. We are not provided with any information related to issues with the account verification. The online application process is automated and the TreasuryDirect system attempts to verify information the customer provides with commercially available services. Only a Pass/Fail notification is returned to the TreasuryDirect system. The verification process does not involve your banking information or data from your credit report/rating. We cannot answer questions via phone calls or emails related to this topic.
    It goes on to provide an information form which needs to be verified by one of a number of institutions. That form does not provide any way to register as a family trust, so there's another big hassle. More trouble than it's worth, it seems to me.
  • @old_joe, I have a Treasury Direct account from 20 yrs ago, having bought IBonds. All my Treasury bond / Notes purchases have been at Fidelity in 2022 (except once at Schwab when I realized Fidelity is much easier for me).
  • For stable-value funds in workplace 401k/403b,

    TIAA Traditional (September rates; no change from August)
    Restricted RC 5.75%, RA 5.50%
    Flexible RCP 5.00%, SRA 4.75%, Newer IRA 2.80%

    Fed TSP G Fund 2.875% (still showing August rate)

    @Old_Joe, Treasury Direct does allow trust registrations.
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