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Survey of the Best CD Rates for April 11, 2014

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Survey of the Best CD Rates for April 11, 2014

Treasury yields fell this week after the release of the FOMC minutes which indicated that rates will likely stay low for a longer time than what analysts were saying right after the last FOMC meeting. As I had thought, the markets were putting too much into Chairman Yellen’s press conference which suggested rate hikes could begin as soon as early 2015. Based on the FOMC statement changes, it sure seemed that we would be lucky to get rate hikes in late 2015. The FOMC minutes confirmed that the Fed is favoring a longer wait before hiking rates. As was stated in the Calculated Risk Blog’s summary of the minutes, "Rates will be low for a long time."

So if you have been putting off long-term CDs with the hopes of higher rates around the corner, you may want to rethink your strategy. We have been seeing rising long-term CD rates over the last several months. I doubt banks will continue these rate hikes if it becomes apparent that rate hikes from the Fed are a long way off.

Long-term CD rate hikes did seem to slow this week. I only noticed one internet bank that hiked rates this week. That was Discover Bank which increased its long-term CD rates for terms of 4 to 10 years. Discover had been slow to increase rates, so this rate hike was long overdue. However, the new rates are still far behind the rate leaders. Its 5-year CD rate increased from 1.65% to 1.95% APY, and its 10-year CD rate increased from 1.90% to 2.25% APY. Unfortunately, the rates weren’t the only thing that have gone up at Discover. In February it increased the early withdrawal penalties. So these CDs are no longer good deals when closed early. As one reader noted, you would be better off with Discover Bank brokered CDs for terms of 5 years or longer.

The best deal in my opinion continues to be the 5-year CD at Barclays which has a 2.25% APY. What makes this a good deal is this CD’s mild early withdrawal penalty of 6 months of interest. I describe how good of a deal this is even if you prefer short-term CDs in my blog post.

Local CD Deals

For the local CD rate changes on the CDs that I track below, there were just a couple of small rate cuts.

On the positive side, I added three new local deals.

Out of these three local deals, the best one is the 3.00% APY 5-year CD special at Patriot Federal Credit Union. There’s also a special 2.50% APY 4-year step-up CD and a special 2.00% APY for terms of 3 years and 30 months. Patriot’s field of membership includes parts of Pennsylvania and Maryland.

Another good local deal is the CD specials at Liberty Bank in Connecticut. It’s offering a 2.50% APY 5-year CD, a 2.25% APY 4-year CD and a 2.00% APY 3-year CD.

Finally, MidFirst Bank came out with a 10-year CD with a 3.00% APY. I had long been listing its 7-year CD rate in my tables. That remains at 2.40% APY. MidFirst Bank has branches in parts of Arizona and Oklahoma.

Long-Term CD Break Strategy

For the short-term CDs in my lists, you might notice CDs with the note "5-year CD closed after X years". These take into account the yield after the early withdrawal penalty is applied.

If you want to compare the effective yields of other CDs after the early withdrawal penalties, please refer to our CD early withdrawal penalty calculator.

The risks of planning for early withdrawals of long-term CDs were highlighted by the deposit agreement change at Ally. The risks have also been seen at credit unions which have raised the early withdrawal penalties on existing CDs. I have more details in this blog post.

Note About the CD Survey

As I described in my rate table overview, you can use our CD rate tables to find the best rates for both nationally available CDs and local CDs. This CD survey blog posts are intended to highlight nationwide CD deals that may not be apparent in the tables. For example, I'll include the post-penalty yields of a few long-term CDs.

The CD survey blog posts are also intended to highlight the local CD deals that are available in large metro areas. There are many high CD rates, but most of these are at small banks in rural areas or at small credit unions with very narrow fields of membership. In these local CD surveys, my focus is on local CD deals that are in big cities or that are available in large areas of a state.

Yields Accurate as of April 11, 2014

Under 1-Year CD Rates

InstitutionRatesNotes
EverBank1.10% checking/MMA intro 6-month rate ($100K/$50K max)account review
Connexus Credit Union1.00% 6-month CDw/active chk
Doral Direct0.91% 9-month CDaccount review
Bank5 Connect0.90% 6-month CDNot available to MA & RI residents
Doral Direct0.87% 6-month CDaccount review
Ally Bank0.87% 11-month No-Penalty CDsee account review

Noteworthy Local Deals - Under 1-Year CDs

InstitutionRatesRegion
HomeBanc1.50% 3-month CDCentral and West Central FL
Flagstar Bank1.05% savings account w/6-mo rate guaranteeMichigan
Gulf Coast Federal Credit Union1.10% 6-month CDCorpus Christi, TX metro
Doral Bank NY1.00% 6-month CDNYC

1-Year CD Rates

InstitutionRatesNotes
Quorum Federal Credit Union1.25% 13-month CD
Melrose Credit Union1.15% 1-year CD
GE Capital Retail Bank1.10% ($2K min) 13-month CDCD special
Connexus Credit Union1.10% 1-year CDw/active chk
CIT Bank1.05% ($25K min)add-on & bump-up 1-year CD
GE Capital Bank1.05% 1-year CD
CapitalSource Bank1.05% ($10K) 11-month CD special
AmTrustDirect1.05% 1-year CD
GE Capital Retail Bank1.05% ($25K min) 1-year CDFormerly MetLife
Ally Bank0.99% 1-year CD60-day early withdrawal penalty

Noteworthy Local Deals - 1-Year CDs

InstitutionRatesRegion
Gulf Coast Federal Credit Union1.50% 12-month CDCorpus Christi, TX metro
South Florida Federal Credit Union1.26% 1-year CDSouth Florida
Security Service Federal Credit Union1.25% 13-month CDparts of Texas, lower rates in CO and UT
LOMTO Federal Credit Union1.20% 1-year CDparts of New York City
Doral Bank NY1.20% 1-year CDNYC
HAB Bank1.15% 1-year CDSouthern California
Gesa Credit Union1.14% 14-month CDWashington State
Cornerstone Community Financial Credit Union1.14% 14-month CDparts of MI and OH
HAB Bank1.10% 1-year CDNYC metro
Beal Bank1.01% 1-year CDSoutheast FL

18-month CD Rates

InstitutionRatesNotes
Xceed Financial Credit Union1.50% 17-month CD
Barclays1.50% (2.25% 5-year CD closed after 18 months)see review & risks
BBVA Compass1.25% (w/relationship checking) 1.15% (w/o relation) 18-month CDnow nationally available
Northern Bank & Trust Company1.25% 20-month CD
Ally Bank1.16% (1.60% 5-year CD closed after 18 months w/new ewp)see review & risks
GE Capital Retail Bank1.15% 15-month CD specialFormerly MetLife

Noteworthy Local Deals - 18-Month CDs

InstitutionRatesRegion
Gulf Coast Federal Credit Union1.65% 18-month CDCorpus Christi, TX metro
South Jersey Federal Credit Union1.26% 18-month CDparts of New Jersey
Doral Bank NY1.25% 18-month CDNYC
Greater Nevada Credit Union1.20% 17-month IRA CDNorth Nevada
ABNB Federal Credit Union1.10% ($100K) 15-month CDNorfolk/Virginia Beach metro
NEFCU1.05% 20-month CDLong Island, NY

2-Year CD Rates

InstitutionRatesNotes
Barclays1.69% (2.25% 5-year CD closed after 2 years)see review & risks
Melrose Credit Union1.41% 2-year CD
Northrop Grumman Federal Credit Union1.40% ($40K) 1.25% ($2.5K) 2-year CD
BBVA Compass1.35% (w/relationship checking) 1.25% (w/o relation) 29-month CDnow nationally available
Ally Bank1.27% (1.60% 5-year CD closed after 2 years w/new ewp)see review & risks
Connexus Credit Union1.30% 2-year CDw/active chk
Bank5 Connect1.20% add-on 2-year CDnot available to MA & RI residents
CIT Bank1.20% ($25K min) add-on & bump-up 2-year CD

Noteworthy Local Deals - 2-Year CDs

InstitutionRatesRegion
Gulf Coast Federal Credit Union1.75% 2-year CDCorpus Christi, TX metro
Greater Nevada Credit Union1.70% 27-month IRA CDNorth Nevada
NavyArmy Community Credit Union1.70% ($100K) 1.40% ($1K) 2-year CDCorpus Christi, TX metro
Doral Bank NY1.45% 2-year CDNYC
LOMTO Federal Credit Union1.45% 2-year CDparts of New York City
Keesler Federal Credit Union1.50% ($100K) 1.40% ($1K) 2-year CDMississippi
People's Alliance Federal Credit Union1.35% 28-month CDNYC and Miami
BrightStar Credit Union1.25% 23-month CD (+0.25% w/chk relationship)parts of Southeast FL

3-Year CD Rates

InstitutionRatesNotes
Wilshire State Bank2.28% 3-year installment savings account w/auto xfers, $100K maxaccount review
Barclays1.88% (2.25% 5-year CD closed after 3 years)see review & risks
Connexus Credit Union1.75% 3-year CD w/active chk
Melrose Credit Union1.66% 3-year CD
Northern Bank & Trust Company1.60% 3-year CD
Navy Federal Credit Union1.55% ($100K) 1.50% ($20K) 3-year CDlimited membership
America's Credit Union1.50% 3-year CDpromotional
Intervest National Bank1.45% 3-year CD
CIT Bank1.40% ($100K) 1.27% ($1K) 3-year CD
Bank5 Connect1.30% 3-year CDnot available to MA & RI residents

Noteworthy Local Deals - 3-Year CDs

InstitutionRatesRegion
Greater Nevada Credit Union2.20% 37-month IRA CDNorth Nevada
NavyArmy Community Credit Union2.05% ($100K) 1.75% ($1K) 3-year CDCorpus Christi, TX metro
Gulf Coast Federal Credit Union2.02% 3-year CDCorpus Christi, TX metro
Patriot Federal Credit Union2.00% 3-year and 30-mo CD specialparts of PA and MD
Liberty Bank2.00% 3-year CD specialConnecticut
Transportation Federal Credit Union2.00% 3-year CDWashington DC metro
Keesler Federal Credit Union1.65% ($100K) 1.55% ($1K) 3-year bump-up CDMississippi
Gesa Credit Union1.64% 30-month CDWashington State
ABNB Federal Credit Union1.60% ($100K) 39-month CDNorfolk/Virginia Beach metro
LOMTO Federal Credit Union1.60% 3-year CDparts of New York City
Doral Bank NY1.60% 3-year CDNYC
Department of Commerce FCU1.55% 3-year CDWashington DC
Spokane Teachers Credit Union (STCU)1.51% ($25K) 30-month CDWA State & parts of ID

4-Year CD Rates

InstitutionRatesNotes
Melrose Credit Union2.02% 4-year CD
NASA Federal Credit Union2.00% 49-month CD special
Barclays1.97% (2.25% 5-year CD closed after 4 years)see review & risks
Fort Knox Federal Credit Union1.85% 46-month CDConsumer-unfriendly history, see review
America's Credit Union1.80% 4-year CDpromotional
Navy Federal Credit Union1.80% ($100K) 1.76% ($20K) 4-year CDlimited membership
CIT Bank1.80% ($100K) 1.70% ($1K) 4-year CD
GE Capital Retail Bank1.75% ($25K) 1.70% ($2K) 4-year CDFormerly MetLife
EverBank1.73% 4-year CD
Nationwide Bank1.72% ($100K) 1.67% ($500) 4-year CD
Barclays1.70% 4-year CD
San Diego County Credit Union1.65% ($90K) 4-year CD
Ally Bank1.30% Raise-Your-Rate 4-year CD
Pentagon Federal Credit Union1.26% 4-year CD

Noteworthy Local Deals - 4-Year CDs

InstitutionRatesRegion
Patriot Federal Credit Union2.50% 4-year step-up CD specialparts of PA and MD
Liberty Bank2.25% 4-year CD specialConnecticut
Bank of Utica2.25% 4-year CDCentral New York
Bayer Heritage Federal Credit Union2.15% 4-year CDparts of WV, OH & SC
Institution For Savings2.00% 4-year CDparts of MA
Keesler Federal Credit Union2.00% ($100K) 1.90% ($1K) 4-year CDMississippi
Department of Commerce FCU1.80% 4-year CDWashington DC
MidFirst Direct1.75% 4-year CDAR, AZ, CA, FL, MO, NH, NV, NY, OK, TX, and WY
LOMTO Federal Credit Union1.75% 4-year CDparts of New York City
Police and Fire Federal Credit Union1.75% 4-year CDPennsylvania
HAPO Community Credit Union1.70% 4-year CDall of Washington State
Doral Bank NY1.65% 4-year CDNYC
Fifth Third Bank1.50% 4-year CD specialseveral eastern and midwestern states

5-Year CD Rates

InstitutionRatesNotes
CIT Bank2.30% ($100K) 2.25% ($1K) 5-year CD
Navy Federal Credit Union2.30% ($100K) 2.25% ($20K) 5-year CDlimited membership
Melrose Credit Union2.27% 5-year CD
Stanford Federal Credit Union2.27% ($100K) 5-year CD, requires chk w/ddaccount review
Barclays2.25% 5-year CD
EverBank2.24% 5-year CD
GE Capital Retail Bank2.25% ($25K) 2.20% ($2K) 4-year CDFormerly MetLife
iGObanking.com2.15% 5-year CD
GE Capital Bank2.10% 5-year CD
BBVA Compass2.10% (w/relationship checking) 2.00% (w/o relation) 5-year CDnow nationally available
San Diego County Credit Union2.05% ($90K) 5-year CD
State Farm Bank2.05% 5-year CD, 2.10% IRA
State Bank of India - New York2.05% 5-year CD
Mountain America Credit Union2.00% 5-year CD
Discover Bank1.95% 5-year CD
Fidelity New Issue Brokered CD1.95% 5-year non-callable CDissued by GE Capital Retail Bk and Discover Bk

Noteworthy Local Deals - 5-Year CDs

InstitutionRatesNotes
Patriot Federal Credit Union3.00% 5-year CD specialparts of PA and MD
Everett Co-operative Bank3.00% 63-month CD w/checkingMassachusetts
ABNB Federal Credit Union2.60% ($100K) 63-month CDNorfolk/Virginia Beach metro
Liberty Bank2.50% 5-year CD specialConnecticut
Bank of Utica2.50% 5-year CDCentral New York
Bayer Heritage Federal Credit Union2.40% 5-year CDparts of WV, OH & SC
Progressive Credit Union2.32% 5-year CD (NYC with unique FOM)account review
Keesler Federal Credit Union2.30% ($100K) 2.20% ($1K) 5-year CDMississippi
Security Service Federal Credit Union2.25% ($100K) 2.10% ($500) 5-year CDparts of Texas, lower rates in CO and UT
Credit Union West2.20% (IRA $50K) 1.95% (non-IRA $50K) 5-year CDPhoenix metro
MidFirst Direct2.15% 5-year CDAR, AZ, CA, FL, MO, NH, NV, NY, OK, TX, and WY
Gesa Credit Union2.14% 5-year CDWashington State
Dime Savings Bank2.10% 5-year CDNew York
Department of Commerce FCU2.10% 5-year CDWashington DC

Over 5-Year CD Rates

InstitutionRatesRegion
Fidelity New Issue Brokered CD3.30% 10-year non-callable CDissued by GE Capital Retail Bk
Navy Federal Credit Union2.80% ($100K) 2.75% ($20K) 7-year CDlimited membership
Franklin Federal Savings Bank2.73% 7-year CDaccount review
Fidelity New Issue Brokered CD2.65% 7-year non-callable CDissued by GE Capital Retail Bk
Apple Federal Credit Union2.60% 10-year CD
Navy Federal Credit Union2.45% ($100K) 2.40% ($20K) 6-year CDlimited membership
Franklin Federal Savings Bank2.42% 6-year CDaccount review
Discover Bank2.25% 10-year CD
Apple Federal Credit Union2.20% 7-year CD
GE Capital Bank2.15% 6-year CD
Intervest National Bank2.07% ($95K) 2.05% ($2.5K) 10-year CD
Discover Bank2.05% 7-year CD

Noteworthy Local Deals - Over 5-year CDs

InstitutionRatesRegion
Hutchinson Credit Union3.15% ($250K) 3.10% ($100K) 3.05% ($25K) 10-year CDKansas
PeoplesChoice Credit Union3.04% 10-year CDYork and Cumberland Counties of Maine
MidFirst Bank3.00% 10-year CDAZ and OK
Frick Tri-County Federal Credit Union3.00% 10-year CDparts of Western PA
Dollar Bank3.00% 10-year CDPittsburgh and Cleveland
SACU2.90% ($90K) 2.85% ($10K) 10-year CDSan Antonio, TX
MidFirst Direct2.75% 7-year CDAR, AZ, CA, FL, MO, NH, NV, NY, OK, TX, and WY
Doral Bank NY2.70% 10-year CDNYC
Frick Tri-County Federal Credit Union2.50% 8-year CDparts of Western PA
Hutchinson Credit Union2.50% ($250K) 2.40% ($100K) 2.30% ($25K) 6-year CDKansas
Wright-Patt Credit Union2.42% ($100K) 2.32% ($500) 6-year CDUS gov military and civilian personnel, Parts of OH
MidFirst Bank2.40% 7-year CDAZ and OK
Security Service Federal Credit Union2.40% ($100K) 2.25% ($500) 7-year CDparts of Texas, lower rates in CO and UT
SACU2.40% ($100K) 2.36% ($10K) 7-yearSan Antonio, TX
Gesa Credit Union2.34% 7-year CDWashington State
Columbia Bank2.30% 7-year IRA CDNew Jersey
Doral Bank NY2.30% 7-year CDNYC
First Republic Bank2.25% 6-year CDparts of CA, OR, MA, CT, FL and NY
Fifth Third Bank2.00% 6-year CD specialseveral eastern and midwestern states

Note: All rates listed above are Annual Percentage Yields (APY) which factor in compounding.


  Tags: CD rates

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Comments
47 Comments.
Comment #1 by Anonymous posted on
Anonymous
To all those who are waiting for the interest rates to go up, it is not going to happen.
We past the point of no return with $20 trillions in debt and the $4.2 trillions short fall at the FED.
Let say the rate on 10year treasury is 5%, it will take 25% of the taxes collected by IRS just to pay the interest on the debt. Since that is almost impossible unless the taxes are doubled, we are not going to see interest rate raise for long time to come.
Furthermore, the dollar will collapse and your savings will be destroyed. Raising the rates sounds fine to some of you, but will come with double edge sword. You will collect the money in your left pocket and will give it right away from your right pocket and then some more to cover your taxes and inflation.

13
Comment #2 by Anonymous posted on
Anonymous
It now looks like it may be some time before rates rise.

10
Comment #3 by Anonymous posted on
Anonymous
We are no closer to a interest rate hike than we were six years ago.

9
Comment #6 by QED posted on
QED
To Anon #1

I totally agree with your take, I believe your thinking is sound, and thumbs up.

The rub will come though, if it comes and do not ask me when, but the problem will come when no lender is any longer willing to lend to the USA at these low rates because our debt has become so completely ridiculous that even a child could see it never will be paid off.  China, for example, now has $1.5T at risk here.  Just exactly how stupid are the Chinese?   I don't think they are stupid at all.

In my view, members of both political parties know the debt is already beyond any chance of repayment.  They do not care.  Their plan is simply to roll things over for as long as that works, then cry "not my fault" as America collapses unceremoniously into oblivion.

  

10
Comment #13 by Anonymous posted on
Anonymous
The rest of the world is in the same boat or much worse off. China has a boatload of economic and social challenges and is not a threat to our currency. There's a reason the world is investing in American real estate and buying our bonds.

Rates will probably stay low for a very long time. It's the "new normal" for savers.

5
Comment #15 by QED posted on
QED
It is difficult to foresee the unforeseeable.  In the fall of 2008, save for scant few persons having astonishing acumen, nobody was able to spot the black swan until it had landed.  And "nobody" includes some very highly placed, incredibly bright people.

I'm not one of those astonishing persons.  Oh, God, how I wish I were.  I do realize fully there exist things I don't know.  But I don't know what I don't know.

I grasp intuitively the inherent and growing instability which inevitably proceeds from wrongly doing things as they are being done today.  But I lack the ability to foresee the tipping point.  It will come in a manner similar to what happened in 2008, in that very few of us will perceive the event in advance.  And sadly for me, try though I might, I am very unlikely to be one of the few.  :-(

5
Comment #4 by Hoody posted on
Hoody
So I assume going long with those 7yr 3.1%ers from Navy was better than nothing. I'm sure those who's 5 and 6%ers are coming due will know what others have sat thriough for the past 4 yrs when only 1% or even less was the deal of the day.

As for comment 1, yeah I'm sure that would be the case, but than at least those getting the interest that will leave the next pocket will at least be able to get something for it, I only do this for that reason alone, I know I won't get over, but at least I can still pay the ****ed inflated bills with inflated dollars.  So far just doing this CD saving stuff and living low, I managed to do Ok even with those 1%ers for the past 3 yrs. The key thing though is my house is paid off, my cars are paid off, and I don't have kids, I'm retired and the biggest expense's are tax's, car tags, property tax, real estate (which is 100 bucks a month), dental, and the usual living expenses. Other than that I have no desire to cruse around the world, done that been there, wioth a T shirt from each country, but that was in a uniform.

All I want is just to stay even anyway, I don't need any more than what I need, if that makes sense to you.

7
Comment #5 by Anonymous posted on
Anonymous
Right now I think going long with the 7 year CDs from Navy at 3.1% looks pretty good.  My question is: what CD do you go to now?  Done the  long term CDs from Navy, Pen Fed, GE Capital Retail, Garden Savings and Barclays.  Where to next?  How about the 5 year from Melrose?  Or what else looks good?

5
Comment #10 by Hoody posted on
Hoody
I don't go to any right now, I'm maxed out at navy, and the next one to come due won't be until Apr next year, than one end of 2015. But I'm not overly concerned either way, as the 1st post goes, either what I have will last me, or were all gona become futile farmers or roaming hords, smirks. either way I'm not gona loose sleep, my life has pretty much been lived, I'm just greatful to be in pretty good health, which is worth more than any amount of $$$.

6
Comment #7 by Anonymous posted on
Anonymous
Makes perfect sense.   You are not alone.

5
Comment #8 by Anonymous (anonymous) posted on
Anonymous
My comment #7 was in response to comment #4.

5
Comment #9 by Anonymous posted on
Anonymous
For those of you who been bamboozled to think that debt is the real problem, there are some simple solutions like:

Reverse the Reagan tax cuts
Stop wasteful military spending

For more ideas, see the Better Off Budget

7
Comment #11 by Anonymous posted on
Anonymous
Good luck with that.  Dream on.

4
Comment #12 by Anonymous posted on
Anonymous
#9, What is th point of raising the tax rates, you will receive $1 in interest and pay $2 in taxes. It not gonna happen, ever.

4
Comment #14 by Anonymous posted on
Anonymous
Do some research and you will see your statement is false.  Perfect example why people should not take all comments seriously.

1
Comment #18 by Anonymous posted on
Anonymous
We may emulate Japan.  Low consumer prices, low growth and high debt for a long time.  And stock prices may go down for a long time.

6
Comment #19 by Anonymous posted on
Anonymous
After our lengthy "Japan" phase, who knows what will happen?

7
Comment #20 by Anonymous posted on
Anonymous
Why is it that progressives never promote the creation of wealth? That, and that alone, is the only long-term solution.

6
Comment #25 by Anonymous posted on
Anonymous
#20, the progressives (democrats) do not want you to be wealthy, otherwise, how they will control you, it is against their long term dictatorship program enacted by Obama with spread the wealth and make everyone poor.

2
Comment #28 by Anonymous posted on
Anonymous
We support the creation - just not the concentration - of wealth.

3
Comment #16 by Anonymous posted on
Anonymous
I think this is an incredible site for a conservative investor--young or old.  Ihave used it since I have been 47 and now 51. I wish I found it even earlier. I have alway and my fmaily have been in CDs and Treasuries for many years and they paid well and let is live comfrotably and save, NOW times are different and I wish this site would start talking about muni bonds , and explain their importance, and premiums an why it is worth paying the premium to get the 5%vand 5.50% returns. Times have changed alot and I now have moved 80% of my funds from bank CDs to Muni Bonds (nOT FUNDS) to make a 5% and 5.50% return tax free. I could not longer keep dreaming int. rates will rise and spend down my principle. Yes I have taken 20-30 yr muni bonds BUT now I can sleep nites and pay bills and save. We need a realistic option to CDs for income and it would be great if this site can start incorporating this option. OR we all will spend down our savings waiting for the day the "dream boat" arrives with a sign "5% over here"

8
Comment #17 by Anonymous posted on
Anonymous
Aren't muni bonds a lot riskier than Treasuries or CDs?

3
Comment #23 by QED posted on
QED
I don't have your answer.  But consider:

Our CDs are backed by the full faith and credit of a US Government having $17.5T current debt with roughly $100T in unfunded future obligations.  And we are not growing at a tenth the rate needed for there to be any chance of meeting all these obligations . . . some assert we're not growing at all!!

So you decide regarding how safe you believe our CDs to be.  In my view, when push comes to shove, look out below!!!

5
Comment #24 by Anonymous posted on
Anonymous
I agree with you.  But I think muni bonds are even riskier than CDs.

7
Comment #26 by Anonymous posted on
Anonymous
You can pay a premium and buy insured bonds, If the muni goes under, your principle is paid back.

3
Comment #30 by Anonymous posted on
Anonymous
I thought so BUT to me a 5% tax free return is like getting 9% at the bank on a CD...so........when will we see 9% at the banks again??? Riskier, hmm I went with AA arted muni bonds and only essential services liek water/sewer and state GO bonds..riskier if they dont pay your money back BUT everyone has to pay property taxes and for water /sewer..so

1
Comment #31 by Anonymous posted on
Anonymous
#30,

Here is a handy formula you might be interested in to determine the rate a taxed cd has to earn to be equal to a tax free investment.  (Tax free rate / (1 - your tax bracket) = Rate the taxed cd has to earn to be equal to the tax free rate

For example:

If you received 5% Tax Free Return and you were in a 25% tax bracket, then you would have to earn 6.67% in a taxable cd to equal the 5% tax free investment.

(5/(1-.25)=5/.75= 6.67%

4
Comment #37 by cumulus posted on
cumulus
Of interest to several, your formula equates the 5% taxable
Penfed CD to a 3.75% tax free investment; .05*(1-.25)=3.75%

1
Comment #21 by Anonymous posted on
Anonymous
I believe rates are going higher than most believe simply because of the Historic avg.  The 10 year treas. could likely be at 4% within 3 years, so this means much higher CD rates could be coming.  I don't buy the hype that everyone and the brother believes now that rates are going to stay extremely low for the next 10 years.  It ain't gonna happen because everyone has bought this hype!   

4
Comment #22 by Anonymous posted on
Anonymous
I think you could be right.  I think we could see much higher rates, much sooner than everyone thinks.

5
Comment #27 by Anonymous posted on
Anonymous
There is no factual basis, economic or otherwise, to support a raise in interest rates. Rates rise in response to economic expansion and growth, not the hopes of bloggers. 

6
Comment #29 by Anonymous posted on
Anonymous
There is plenty of basis my friend.  QE has simply bought interest rates down and QE is coming to an end!   The FED ponzi scheme of printing trillions to buy debt is ending according to the FED!

3
Comment #32 by Anonymous posted on
Anonymous
We could be at a 1% fed funds rate by the end of this year.

1
Comment #33 by Anonymous posted on
Anonymous
QE has brought saver's interest earnings to near zero. To do the math, let's assume 1% on a one year certificate of deposit. Double it...to a whopping 2% and the masses will be giddy. The corresponding drop in the stock market and the damage to bond funds will tell a different tale as wealth, once again, flows upward. QE saved the banks (the spread dramatically increased for them), failed to stimulate the economy and devalued the USD. All in all, it sounds a lot like monetizing the unfettered debt we all so casually ignore.

2
Comment #34 by Anonymous posted on
Anonymous
I agree.  The only answer is to end QE and raise interest rates.  It might be painful for a while, but not to do so would be disastrous in the long run

2
Comment #35 by Anonymous posted on
Anonymous
agree with 33 and 34.

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Comment #36 by Anonymous posted on
Anonymous
The main purpose of QE was to bail out large bank's lousy loan portfolios, thus saving them from disastrous financial schemes. Lowering the federal funds interest rate was part of the QE strategy and it's purpose was to stimulate economic growth AND thus inflation. The Fed wants inflation because that's a sign of a growing/expanding economy. The inflation goal is above 2%. If and when that's measured you will see minor interest rate increase(s). Absent real economic growth, measured inflation, real wage growth and meaningful unemployment numbers the Fed will keep rates low as long as they deem it prudent. Wages are STATIC http://blogs.wsj.com/moneybeat/2013/04/16/the-best-indicator-of-u-s-health-is-wage-growth-or-lack-th... and a rise in interest rates would make the situation far worse. No one is going to reward savers at the expense of workers. No one.   

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Comment #38 by Anonymous posted on
Anonymous
Its not a question of rewarding savers or workers.  The economic strength of the country depends on ending QE and normalizing interest rates.

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Comment #39 by Anonymous posted on
Anonymous
You got that RIGHT!

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Comment #40 by Anonymous posted on
Anonymous
Referring to comment #38 that is.

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Comment #41 by Anonymous posted on
Anonymous
And the longer the Fed continues QE and Zero Interest Rate Policy (ZIRP), the more long term, structural damage  will be done to the U. S. economy.

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Comment #42 by Anonymous posted on
Anonymous
Bond purchases must end and they will. However, signals have been sent for the past year that rates will remain low past the end of bond purchasing and may remain low for some time to come. The rate is tied to unemployment and inflation, two variables that vary at the whim of the Fed policy makers. The Fed claims apolitical status when, in fact, it is nothing of the kind.
I agree...long-term structural damage has occurred. The simplest proof is to ask rhetorically, "what exactly did US citizens get for the 17 trillion dollar debt we all owe." Modern bridges, a robust space program, a cancer cure, a modern energy grid, great jobs, top notch K12 education systems, a new way of thinking? No to all of the above. $17,000,000,000,000 and counting. http://www.usdebtclock.org/           

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Comment #43 by Anonymous posted on
Anonymous
I agree that we have gotten nothing.

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Comment #44 by Anonymous posted on
Anonymous
See Yellen's comments of April 16.

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Comment #45 by Anonymous posted on
Anonymous
Yes.  You're right.

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Comment #46 by Anonymous posted on
Anonymous
I saw Yellen's comments for today.  Am I supposed to be impressed?  She nothing more than a Academic grandma that needs some real world experience!  Just like Bernanke.  Pump up the banks and wall street from the hard work of the 99%.

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Comment #47 by Anonymous posted on
Anonymous
She is very bad news.

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